IRS Taxpayer Advocate Service Changes Case Acceptance Criteria

Posted on September 18, 2012 by Kursti Nakagawa

The Taxpayer Advocate Service (TAS) is altering the measures it uses to accept cases from taxpayers that are having difficulty dealing with the Internal Revenue Service to lighten its caseload. The TSA has restricted its case admission criteria as budget cutbacks are taking a toll on the IRS.

The IRS sent a recent email to tax professionals. “The Taxpayer Advocate Service is designed to be a “safety net” for taxpayers who are experiencing problems with the IRS. However, because TAS cannot help all six million to twelve million taxpayers who may be having problems at any given time, it must focus on cases where it can add the most value.”

The email was then linked to a document listing four categories the TAS plans to focus on in accordance to the revised case acceptance criteria.

Where a taxpayer is having financial hardship, emergency, or difficulty, and the IRS needs to move quicker than it usually does under normal circumstances. Because if the IRS does not move quickly (i.e. to release a lien or remove a levy), the taxpayer will have even more financial difficulty.
Where several different units and steps are required, and the case needs a “traffic cop” or “coordinator” to make sure everyone does their role. This is important for TAS to do.
Where the taxpayer has tried to find a resolution through normal IRS portals, but they have not worked.
Where the taxpayer is displaying unique issues or facts (legal issues included) and the IRS is not able to customize their approach.

“Last year, we assessed where our efforts have the greatest impact, and identified the four types of issues in which the IRS seemed to get the right answer (though slowly)”, said TAS. “Those cases involve the processing of original tax returns, amended returns, rejected and unstoppable returns, and injured (but not innocent spouse claims). We determined that TAS generally won’t accept cases involving pure processing issues so we could focus on higher-impact problems.”

“However, there are many exceptions to this policy. If the taxpayer is suffering an economic burden, TAS will take the case. If the case involves other issues, TAS will take the case. If the taxpayer is referred by a congressional office, TAS will take the case. And if the taxpayer specifically requests and insists, TAS will take the case.”

TAS has stated that it is trying to do its best to help tax preparers and taxpayers, but within limits. “We’ll continue striving to help tax professionals and their clients. But before you contact TAS, please remember that we are a finite resource that Congress created not to substitute for regular IRS procedures but to help taxpayers who need special attention.”

If you have tax debt you are unable to pay or any other questions our tax settlement professionals are happy to discuss you’re tax resolutions free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances.

For more information about our tax debt resolution services visit us at www.professionaltaxresolution.com. Contact us by phone at 877.889.6527 to receive a free, no obligation consultation

Red Flags to the IRS – Audit Statistics

Posted on September 6, 2012 by Kursti Nakagawa

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Business Tax Audit Advice From Former IRS Commissioner

Posted on August 21, 2012 by Kursti Nakagawa

Audit

An audit can be both an alarming and bothersome time for a business. Here are some simple and helpful steps from the Commissioner of the IRS to make the process go as smoothly as possible. These suggestions are especially useful to small and medium sized businesses.

How to Maneuver the Audit Process:

1. Gather your Workplace Organization – Upon receiving the notice, immediately meet with your employees, tax professionals/CPA, and other involved groups. Also, thoroughly examine all documents. It is vital to be prepared in a timely and organized fashion for your first meeting. First impressions can be critical.

2. Courtesy to the Agent – Keep in mind IRS agents have a challenging job. If the agent is treated respectfully, they are more apt to be understanding on your matter.

3. From the Offset Establish the Whole Outlook of the Investigation – This is very important. The IRS is very open about business matters. It pays to have no unknowns or surprises during the audit. Everything should be carefully examined.

4. Be Punctual on Timelines – The IRS will want to establish timelines and target dates for reports and materials. Missing a deadline due to setting an improbable timeline could have serious consequences. That being said the IRS has resource limitations and will want to get the audit done on a prompt schedule. Be prepared in knowing this.

5. Record Preparation and Communication – It is very important to have all of your materials organized and labeled. Everyone involved in the process should be thoroughly prepared and well-informed.

6. Execute your Own Review – Be thorough and go beyond what the IRS expects of you. The results can be advantageous. There have been situations where in fact checks have been received from the Treasury.

7. If it is Imperative, Speak to the Manager – If question’s or complications arise just ask to speak to the IRS agent’s manager. The IRS actually encourages business owners to contact the higher up personnel to seek a resolution.

8. Mediation and Arbitration – The IRS has significantly broadened its opportunity for taxpayers to seek a resolution. When it is applicable mediation and arbitration are great channels to consider for solving a problem.

9. Appeals and Litigation – The minute you receive the audit notice, always know that you might have to seek the final outcome through mediation and arbitration, IRS appeals, or even litigation.

If you have a concern in regards to an audit or any other tax question(s), our tax settlement professionals can help you. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which option will be the best fit for your specific set of circumstances.

For more information about our tax resolution services, visit us today at www.professionaltaxresolution.com. Contact us by phone at 877-889-6257 to receive a free, no obligation consultation.

Tax Debt Incurred By Medicaid Providers

Posted on August 14, 2012 by Kursti Nakagawa

A new study by the Government Accountability Office discovered that the 7,000 Medicaid providers had an estimated $791 million in unpaid federal taxes from 2009 or earlier, but still received about $6.6 billion in Medicaid reimbursements that year. The three chosen states were Texas, Florida, and New York.

Around 40 Medicaid providers were researched. They consisted of home care providers, dentists, doctors, hospitals, medical suppliers, and others. These businesses and individuals received a total of $235 million in Medicaid reimbursements, while having unpaid taxes of about $26 million. The amount of unpaid federal taxes ranged from approximately $100,000 to over $6 million. According to the report these 40 cases, show “the sizable amounts of unpaid federal taxes owed by some Medicaid providers, are among the most egregious examples of Medicaid providers with unpaid federal taxes we identified.”

About 5.6 percent of the Medicaid providers reimbursed by the selected states during 2009 are represented. The report also stated that the amount of unpaid federal taxes that the Government Accountability Office identified is most likely minimized because taxpayer data from the Internal Revenue Service emulates only the amount of unpaid taxes either reported on a tax return or assessed by the IRS through enforcement. It does not include businesses and individuals that did not file tax returns or underreported their income.

According to the Government Accountability Office two of the providers reviewed by investigators are currently, or were previously, under criminal investigation. One case of criminal behavior was a provider caught in a medical billing fraud scam. Then, another company was found guilty of “improperly prescribing controlled substances.” Meanwhile other providers had been fined, disciplined, and/or had their licensed revoked by the state regulatory agencies and others.

The senate has vowed to crack down on fraud in the federal health care programs. In reaction to the GAO report the senate introduced the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers Dollars Act. It is also known as the Fast Act.

“It is outrageous that health care providers who cheat on their taxes are getting paid with taxpayer dollars through the Medicaid program.” Stated by Carl Levin, D-Mich, who chairs the subcommittee. “The federal government ought to prohibit health care providers with unpaid taxes from enrolling in Medicaid, allow continuous levies on health care providers’ Medicaid payments to recover unpaid taxes, and authorize tax levies on Medicaid payments to Managed Care Organizations whose doctors or other principals are tax delinquent.”

For more information about our tax debt resolution services visit us at www.professionaltaxresolution.com. Contact us by phone at 877-889-6527 to receive a free, no obligation consultation

IRS Levy – Must Follow Legal Guidelines

Posted on August 9, 2012 by Kursti Nakagawa

A tax levy is the confiscation of a taxpayer’s property for the purpose of covering a tax debt. It is one of the final steps taken by the IRS in the enforced collection of back taxes and is usually carried out only after all previous attempts to collect a tax debt have failed. Before the IRS seizes a taxpayer’s property, it must follow a set legal procedure outlined in the Internal Revenue Manual. This procedure begins with the issuing of two formal written notices, the official Notice of Tax Due and Demand for Payment and the Final Notice of Intent to Levy. The second notice also informs the taxpayer of their right to a hearing. Once this communication process has been completed, the IRS can seize the levied assets without further notification.

With certain specific exceptions, the IRS can seize one or more of a taxpayer’s physical assets. The physical assets that are exempt from an IRS levy include the taxpayer’s principal residence or any property other than a rental property that is used as a residence by another person. This exception can be overruled with written approval of the federal district court judge to cover a tax debt in excess of $5000. Other categories of physical property exempt from an IRS levy include furniture and personal effects up to a fixed dollar amount and any property used in a taxpayer’s trade or business unless the levy is approved by an IRS Director. The IRS also has the authority to levy such non-physical assets as wages, insurance policies, retirement accounts, dividends and bank accounts although, again, there are certain specific exemptions. The list of exemptions in this category includes workers’ compensation, unemployment benefits, some annuity and pension payments, certain types of Social Security benefits, disability and welfare payments, judgments in support of minor children and certain wages and other income.

Although the levy process is specifically outlined in the Internal Revenue Manual, a recent review of a random sample of property seizures conducted by the Treasury General for Tax Administration revealed that, in some instances, the IRS did not comply with the stated process. A review of 50 out of 747 property seizures conducted in the twelve month period from June 30, 2010 to July 1, 2011 uncovered fourteen instances where the IRS did not comply with the Tax Code. The infractions included not properly advertising the seized property, not correctly stating the amount of the liability on the seizure notice, incorrectly applying the proceeds from the seizure to the taxpayer’s account and incorrectly reporting information related to the seizure of the property to the taxpayer. In response to these findings, The Internal Revenue agreed to revise their Internal Revenue Manual to prevent further errors.

If you have received an IRS Notice of Tax Due and Demand for Payment or an IRS Notice of Intent to Levy, you should realize that confiscation of your property is imminent. Often the most effective response at this point is to enlist the help of a qualified tax settlement professional. Such an individual will understand tax law and will have experience negotiating with the IRS. If you are the target of a tax levy or any other type of aggressive collection activity by the IRS, our experienced tax professionals can help you stop the impending collection activity and resolve the tax debt issue that caused it.

For more information about our tax debt resolution services, visit us today at www.professionaltaxresolution.com. Contact us by phone at (877)-889-6527 to receive a free, no obligation consultation.