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Category Archives: Balance

Haven’t filed your taxes in years? Don’t give up! Some Back Tax Tips.

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Seeking Back Tax Help

Finding back tax help can be so confusing and stressful that some taxpayers simply give up. When attempting to resolve IRS issues, the help of a qualified professional can be invaluable. Yet finding the right person for the job can be a difficult task in itself.  Many types of companies advertise back tax help but some are made up of salespeople and marketing agents who know very little about negotiating with the IRS. Tax law is difficult to understand and the policies and procedures of the IRS are complex so it is important to find a tax professional that is not only honest and ethical but also experienced in providing back tax help. To insure that an individual meets these qualifications, it is a good idea to verify their current licensure with the state certification agency and the Better Business Bureau. A licensed tax professional that specializes in back tax help is required by their profession to meet stringent continuing education requirements in order to stay current with the never ending stream of changing tax regulations. Hiring a tax professional with verifiable credentials is really the only way that you can be sure of the qualifications of the professional you are hiring.

Let a Professional Do the Talking

Many taxpayers contact us only after they have made numerous attempts to resolve their back tax issues on their own.  Very often they seem surprised that the IRS was not very helpful in getting their back tax issue resolved.  While IRS employees are usually very knowledgeable, it is important to remember that it is the job of most IRS agents to collect the tax you owe. Also, the IRS is divided into many unconnected departments so there is a good chance that the person you are talking with does not even know how help you with your issue. At Professional Tax Resolution, we work with the IRS on a daily basis and are familiar with their policies and procedures.  We know how to communicate with them effectively and will negotiate with them on your behalf to resolve your back tax issues.

Avoid the Penalties and Interest

Many taxpayers are very slow to resolve you their back tax issues. If you are one of those people, it is important to remember that back tax balances continue to accrue penalties and interest until the balance is ether paid or a tax settlement is reached. It is not uncommon for penalties and interest to make up more than half of the total balance that a taxpayer owes.  An experienced tax professional will examine all of your tax settlement options including the waiver of penalties and interest and partial payment settlement options where the IRS accepts an amount that is significantly less than the amount actually owed.

Find the Right Professional

When you are in need of back tax help, probably the most important decision you will make is the selection of a tax professional.  At Professional Tax Resolution our CPAs and Enrolled Agents have many years of experience helping taxpayers resolve even the most complicated tax debt situations. Our process will always begin at the source of the problem and follow the solution through to a complete resolution. We encourage our customers to check our memberships, reviews and affiliations for verification of our credentials and our past successes.

IRS Goes After Race Car Champ for Tax Debt

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Three-time Indianapolis 500 champion, Helio Castroneves was acquitted in 2009 of six counts of tax evasion after the IRS claimed he owed back taxes on earnings between 1999 and 2004. Now they claim that Castroneves owes an additional $3.6 million in taxes and $2.7 million in fraud penalties on the same income that was in dispute in the earlier case.

The IRS accused Castroneves, his sister, and his attorney of hiding income through a Panamanian shell company created by them. Just two days before winning the Indianapolis 500 for the third time, Castroneves’ charges were dismissed.

Helio Castroneves allegedly owed the IRS $15 million in tax debt. He gave them a $5 million dollar check after the trial. The new case is being tried in a civil court which gives the IRS a lighter burden of proof.

If you owe the IRS money due to a tax debt, Professional Tax Resolution can help. We can help determine which option for tax settlements is right for you. Call now to see what our licensed professionals can do to provide tax debt help.

Increased Funding for IRS Enforcement Means Avoiding the IRS Is Harder Than Ever

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More Funding on the Way to Collect Outstanding Tax Debt

If you have an outstanding tax liability and have managed to stay under the IRS radar so far, your time may very well be running out. The Obama administration has submitted a $13.3 billion budget request for the Internal Revenue Service for fiscal year 2012, a $1.1 billion increase over the agency’s 2010 budget. The largest portion of this increase ($339 million) and almost half (approximately $6 billion) of the total 2012 budget will go toward enforcement.

Although recently the overall goal of the government has been to cut spending, the reasoning behind requesting increased funds for the IRS is that the extra expenditure will more than pay for itself. Because the IRS is the government’s primary source of revenue, analysts project that increasing the IRS budget will actually reduce the budget deficit by increasing tax enforcement revenues. Economists generally agree that every dollar invested in tax enforcement nets three or four times that in revenue. This would mean that the proposed 2012 budget increase for enforcement initiatives will net over a billion dollars in revenue.

Although enforcement is not the only focus of the proposed IRS budget for fiscal year 2012, all of the recommended changes are aimed at beefing up and streamlining the tax collection process in one way or another. The main budget items in the 2012 budget are outlined below.

  • Enforcement The budget proposes to strengthen enforcement efforts by addressing offshore tax evasion, improving tax debt collection processes and enforcing the information reporting requirements for businesses that were approved by Congress in 2008.
  • Preparer Oversight The budget allocates funds for increasing the examination requirements for tax preparers, enforcing preparer compliance with IRS rules and procedures and pursuing those preparers who engage in unethical conduct or fraudulent behavior.
  • Taxpayer Service The budget requests resources to improve the IRS website and provide new and improved online services. It also requests funds to add additional staff to improve the level of telephone service.
  • System Modernization The budget allocates funds for continuing the implementation of the taxpayer account database and modernizing electronic filing and payment options.

Although the funding requested by the proposed 2012 budget may meet some resistance in Congress, the handwriting is on the wall. With more and more resources bring allocated to the IRS for enforcement and modernization, it is going to become more and more difficult for taxpayers who have not filed or already have an outstanding tax debt to remain under the IRS radar. Since it is always better to approach the IRS before they approach you, the clear message in all this for taxpayers is that they should take whatever steps are necessary to become income tax compliant.

If you have an outstanding tax liability, we can help you resolve it. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years of experience, we have a thorough understanding of tax law together with the experience to know which tax settlement option will best fit with your specific set of circumstances. Contact us today at (949)-596-4143 or info@protaxres.com to receive a free, no obligation consultation.

FAQ about the IRS Notice of Deficiency

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What is an IRS Notice of Deficiency?
A Notice of Deficiency is a formal letter from the IRS informing a taxpayer of a tax deficiency and advising them of their appeal rights with the United States Tax Court. It is required by law and is sent by registered or certified mail to the taxpayer’s last known address. Although a Notice of Deficiency can be issued when no tax return has been filed, it is most often sent when the tax amount shown on a submitted return is less than the actual amount owed according to IRS calculations.

What information is provided by an IRS Notice of Deficiency?
A Notice of Deficiency must include an explanation for the deficiency together with a statement of the tax, interest and penalties that have been assessed. The notice should also include the final date on which the taxpayer can file a petition with the United States Tax Court appealing the assessment. However, it should be noted that failure by the IRS to specify the last day on which to file a petition will not invalidate an otherwise valid deficiency notice if the taxpayer was not prejudiced by the omission.

How does a taxpayer respond to a Notice of Deficiency?
Within 90 days after a Notice of Deficiency is mailed (or within 150 days after mailing if the notice is addressed to a person outside the United States) the taxpayer must pay the assessed amount or file a petition with the Tax Court to contest the liability. Payment of the assessed amount after the deficiency notice is mailed does not deprive the Tax Court of jurisdiction over the deficiency. In addition, discussion of the case with the IRS during the 90 day period does not extend the time period during which a petition can be filed.

What are the consequences if a response is not submitted in a timely manner?
If the taxpayer does not file a Tax Court petition within the required time period, the appeal process is closed and IRS has the authority to collect the tax. Since the Tax Court is the only court that will hear the question of whether a tax liability is really owed, the taxpayer’s only option after the 90 day deadline has passed is to pay the assessed amount in full and then apply for a refund. If a response is not received within 90 days after the issuance of a Notice of Deficiency, the IRS is likely to issue a Notice to Levy. The Notice to Levy allows a 30 day response time, after which a taxpayer’s property may be seized to enforce collection if the assessed tax still has not been paid. The requirement to issue the Notice to Levy and wait 30 days does not apply if the IRS finds that the collection of tax is in jeopardy.

What are the advantages of obtaining the services of an experienced tax professional?
The IRS is authorized to collect taxes and issuing a Notice of Deficiency is the first step in the collection process. Receiving such a notice can be both intimidating and confusing and may make enlisting the help of a qualified tax professional a worthwhile investment. Collection of taxes by the IRS is permitted without proof of the debt so the burden rests with the taxpayer to determine whether the tax amount shown on the Notice of Deficiency is actually owed. Because of the complexities of tax law, accurately making this determination may require someone with both expert knowledge and experience. In addition, obtaining the help of a tax professional will ensure that the response to such a notice meets the IRS requirements and is submitted correctly, thus avoiding unpleasant consequences down the road.

If you have received a letter from the IRS such as a Notice of Deficiency or Notice to Levy or are threatened with a tax lien or wage garnishment, we can help stop the immediate collection action and help you work toward resolving your tax debt. Contact us today at (949) 596-4143 or info@protaxres.com to receive a free, no obligation consultation.

IRS Warning About Companies That Promise To Reduce Tax Debt – For a Large Fee

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The IRS Wants You to Check Carefully Before Applying for an Offer in Compromise

The Internal Revenue Service has issued a consumer alert advising taxpayers to beware of tax settlement agencies that claim they can settle an outstanding tax debt for a small fraction of the amount owed through the through filing an application for an offer in compromise. While it is true that the IRS has the authority to settle federal tax liabilities for less than the full amount of the tax debt, the offer in compromise serves an important purpose for only a very select group of taxpayers. Commissioner Mark W. Everson recently warned consumers that the IRS is “increasingly concerned about unscrupulous promoters charging excessive fees to taxpayers who have no chance of meeting the program’s requirements.” He urged taxpayers with unresolved tax debt issues not to be fooled by high priced promises.

The bottom line is that if a tax settlement promise seems too easy and too good to be true, then it probably is. There are a few large marketing companies in the United States that are trying to take advantage of taxpayers who are faced with the very real, and very scary prospects of tax liens and wage garnishments. By preying upon those taxpayers in need through advertisements that promise enormous tax relief, they are not only misleading the public, but they end up costing those very vulnerable individuals time and money without ever really addressing the specifics of their tax debt. This is not to say that all tax settlement companies are unscrupulous, but the issue has become rampant enough that the IRS felt they needed to warn the public about this alarming practice.

The truth is that an offer in compromise will usually be considered only after other payment options have been exhausted. If a taxpayer is unable to pay their tax debt in full, there are other settlement options, such as monthly installment agreements, that must be explored before an offer in compromise can even be submitted. In actuality, tax settlements for very low proportions of tax debt are far more infrequent than the advertisements lead the consumer to believe and 100% tax relief is even less common.

Complete information on the tax collection process and various tax settlement and payment options is available on the IRS website (www.irs.gov). By reading through the agreement request qualifications provided on the site, the taxpayer may be able to determine if they qualify for a particular tax settlement option or payment plan. The website itself provides detailed instructions for submitting an offer in compromise and also includes all of the necessary financial forms. Of course, the many laws and regulations regarding the offer in compromise as well as other tax settlement options can be overwhelming so obtaining the help of a knowledgeable and qualified professional is often a worthwhile investment.

A qualified certified public accountant is probably the most desirable choice when seeking professional help with a tax debt issue. A CPA is the most likely professional to have a current knowledge of tax law and a thorough understanding of the policies and procedures of the IRS. An individual with this certification will also have the expertise and the experience to determine the true tax debt and to select the best method of tax relief for a specific set of circumstances. In order to locate a CPA in a specific geographical area, a taxpayer should contact the local or state tax professional association. Before actually hiring a CPA, it might also be a good idea to run a background check on the individual and also to verify their current licensure with the state certification agency and the Better Business Bureau. If references or referrals are available, it is a good idea to review these as well.

At Professional Tax Resolution, we welcome your inquiries and questions. We encourage you to read reviews from our clients as well as click our direct link to our rating with the BBB and the state licensure division. To learn more about how we can help you to remove tax liens, stop a wage garnishment, or find tax debt relief, call us today at (949) 596-4143 for your free no obligation consultation.