150k in Trust Fund Penalties and Income Tax Debt Reduced to $1,000 Mr. C had multiple financial problems that came together to create a perfect financial storm. In addition to mounting medical expenses associated with a serious chronic health issue, he had numerous financial problems were the result of failing to meet his business tax responsibilities. In addition, failing to file income tax returns for the past seven years, his business had been improperly paying their payroll taxes.

Hoping to crawl out of what amounted to a complete financial disaster, Mr. C contacted Professional Tax Resolution for assistance.

During the initial phone consultation with one of our tax professionals, Mr. C informed us he had not filed tax returns for the previous seven years. He also related the problems he was experiencing associated with the improper handling and payment of company payroll taxes. Because a portion of these funds actually belong to the employee and are being held in trust by the employer, the IRS imposes a stiff penalty when these taxes are mismanaged or underpaid. The penalty, aptly named the Trust Fund Recovery Penalty, is equal to 100% of the back tax balance owed and cannot be forgiven though bankruptcy proceedings. A business owner who receives an IRS Notice and Demand for Payment for a back tax balance that is due to the underpayment of payroll taxes may file an appeal within 60 days of receiving the notice. Outside of that, the only method for resolving a back payroll tax balance other than paying the full amount due is through an accepted IRS Offer in Compromise.

The Professional Tax Resolution tax team approached Mr. C’s various business tax issues in a methodical way. Our initial goal was to gather the financial data necessary to file the previous seven years of tax returns. Once these returns had been completed and submitted, we were able to put a number on his outstanding tax liability which turned out to be well in excess of $100k. This total represented a combination of unpaid income taxes and Trust Fund Recovery Penalties. Taking this large amount of tax debt into consideration together with his poor financial condition led us to the conclusion that Mr. C would be a good candidate for an IRS Offer in Compromise. Once this determination was made, our team got right to work gathering the necessary documentation, calculating a reasonable offer and submitting the Offer in Compromise petition. The end result was an outstanding success. The IRS agreed to resolve the entire amount of Mr. C’s back tax balance for $1000, an amount equal to less than one percent of the original balance.

Successful Outcome for a Three Year Tax Settlement Case

Mr. H, a self-employed, divorced father, came to Professional Tax Resolution for help with a number of different tax issues. Due to poor tax planning and ignoring his tax obligations, he had accumulated a tax debt of almost $100,000 over a period of five years. On top of this, he had recently received an IRS Notice of Intent to Audit. Worried about how his sloppy bookkeeping system would fare in an audit and unsure of how to resolve his back tax issues, he reached out to Professional Tax Resolution for help with both problems.

Our firm quickly contacted the IRS and State of California Franchise Tax Board to protect Mr. H’s accounts while we gathered the necessary documents to properly prepare for his audit. Although his books were not the most tidy, our firm worked with him to organize his records. We completed his audit defense file and stayed by his side during the entire audit process. Once the audit was finished, our team filed the adjusted State of California Income Tax Returns and eagerly began collecting Mr. H’s financial information in order select the best possible solution for resolving his tax debt. After careful review of his financials, our professionals determined that he met the qualification criteria for an IRS Offer in Compromise. Although we knew our initial offer might be a difficult sell, we felt like we would ultimately be able to negotiate a lower balance. (https://rentalsfloridakeys.com/) Professional Tax Resolution experts were not deterred when the original offer was rejected. We persevered by filing an appeal and eventually succeeded in negotiating an affordable Offer in Compromise settlement in the amount of $17,640. Although this offer may seem a bit high to some, it was a great accomplishment for both our team and our client given Mr. H’s assets and current financial status.

Mr. H’s case highlights some very important elements of the tax settlement process at Professional Tax Resolution. First, it shows that our professionals will follow each client’s tax settlement case through to a complete resolution. In spite of the fact that it took three years to completely resolve Mr. H’s back tax issues, our firm stuck with the process until they had achieved a successful outcome. Secondly, this case shows that one of the primary aims of our professionals is to protect the client’s assets. Although Mr. H had liens on his accounts when he first sought our help, our professionals were able to protect his accounts from being levied during the entire period of time we were negotiating with the IRS on his behalf. Finally, the case illustrates the ability of Professional Tax Resolution to provide whatever services are necessary to achieve the best overall tax resolution outcome for each of our clients. In the case of Mr. H, we provided audit and bookkeeping services with the help of our parent company in addition to tax resolution services.

Payment Plan Settles $62,000 Tax Debt – Allows $65,000 401(k) to Remain Untouched

Payment Plan Settles $62,000 Tax Debt – Ms. V, a middle-aged woman who suffers from chronic health problems, represents a rather unique tax settlement case. Through years of employment, she had accumulated a back tax balance of $62,000 but, at the same time, had managed to build up approximately $65,000 in a 401(k) plan. Because her savings was greater than her outstanding tax liability, she did not meet the eligibility criteria for several of the popular IRS tax settlement options including the IRS Offer in Compromise.

Having had a difficult time finding a tax settlement firm she could trust, Ms. V came to Professional Tax Resolution through a referral from a friend. Her overall aim was to reduce her tax debt, without dissolving her 401(k). After an initial consultation, our tax team immediately set to work creating a customized tax settlement plan that would fit her specific set of financial circumstances. While we would have liked to use an Offer in Compromise, we quickly realized that her petition would be denied because her monthly disposable income, together with the funds in her 401(K) plan, was sufficient to pay off her back tax balance within a reasonable time. As a result, we continued to explore alternative solutions.

After obtaining updated financial information and negotiating with the IRS, we were successful in resolving Ms. V’s back tax problem using an Installment Agreement. This was an ideal tax settlement solution for Ms. V because it gave her the opportunity to safely pay the IRS while leaving the funds in her 401(k) untouched. Another benefit of this agreement in Ms. V’s case was that the IRS agreed to accept a monthly installment of $200 which is lower than amount necessary to pay back the full balance of the tax debt before the statute of the agreement expires. This means that if the IRS never requests new financials, Ms. V will only repay about $22,000 of the original $62,000 she owed, a tax savings of over 64%!

Professional Tax Resolution puts forth the maximum effort for each client they serve. They understand that the best solution is not the same for every person and customize each tax settlement plan to meet the needs of the customer. In the case of Ms. V, our professionals created an affordable tax resolution plan that protected her 401(k) assets which was her primary aim. Our tax professionals always do the necessary research to design a tax settlement plan resolves each client’s back tax problem in a way that fits their particular set of circumstances.