Tag Archives: Tax Settlements

States Offer Short Sale Assistance to Taxpayers

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When assisting clients with complicated tax settlements, taxpayers often find that the IRS and States have filed tax liens to protect their interests in back taxes owed. Tax liens can cause numerous problems, including damage to credit reports and also make the sale of property more difficult.

Many people, who are facing financial difficulties, are trying to sell their distressed homes for less than the loan balance in short sales. Often, during these transactions, there may not be enough value to pay the recorded state tax lien in full. This may delay, or even prevent, the sale of the home. (inboundrem.com) The State of California is one of many states that may be able to assist the taxpayer with a partial release of a tax lien.

A partial release of lien releases a specific piece of property from a recorded state tax lien, but does not release the lien in its entirety. The lien remains in effect against the taxpayer and continues to encumber other property the taxpayer owns or acquires in the future. The State of California estimates it can take up to 21 working days due to processing increased requests.

Clients seeking a resolution to complicated and large tax debts often face a variety of obstacles. The IRS and States, in recognition of the need to assist taxpayers, have begun to assist taxpayers in resolving these issues.  Complicated tax settlements require a tax professional that is aware of the various tax settlement options available from tax agencies.  Professional Tax Resolution can assist taxpayers in resolving even the most complicated tax settlements.

IRS Violates Taxpayers’ Tax Lien Rights Regarding Tax Debt

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Do you have unfiled taxes, or unpaid tax debt? If so, there’s a chance the IRS has, or will file a tax lien or wage garnishment for any uncollected tax debt. However, there are legal requirements the IRS must follow before doing so.

According to a new government report, nearly 33,000 taxpayers have been harmed due to the IRS not following legal requirements to notify them and their representatives of their rights related to tax liens in a timely manner.

The report was written by the Treasury Inspector General for Tax Administration. The TIGTA recommended that IRS officials ensure tax lien procedures are properly enforced and consistent with IRS procedures. Even though the IRS agreed with this recommendation, it doesn’t mean mistakes can’t still occur. If you are struggling with a tax lien or tax debt contact one of the licensed experts at Professional Tax Resolution to discover your options for tax settlements.

He Owed the IRS $80,000 in Back Taxes. We Reduced His Tax Debt to Zero!

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Steve H. came to Professional Tax Resolution after receiving notice of a wage garnishment from his largest customer.  Steve, a technology consultant, had failed to file tax returns for six years and, according to IRS calculations, owed over $80,000 in back taxes, penalties and interest.  Tax settlement plans for taxpayers with numerous un-filed tax returns always begin with gathering the records necessary to prepare the un-filed tax returns. In this case, the taxpayer was able to gather some information from banking records and some from customers for which he had provided services. Fortunately for this taxpayer, his wife had worked for several years and had had federal and state taxes deducted from her paycheck. We were able to obtain and verify additional tax information by obtaining IRS wage and income transcripts.

After gathering all possible relevant information, we were able to prepare all of the outstanding tax returns.  While balances were due in some years, refunds were owed in others. We were able to request that the IRS apply refunds owed to years where balances were due such that the net result was an outstanding tax liability of zero. It is never advisable to wait for a wage garnishment, tax lien or tax levy to resolve an outstanding tax issue. However, even when a tax issue seems practically unsolvable, there are tax resolution options available.  Professional Tax Resolution always looks at all available tax settlement options and provides a tax debt resolution plan for even the most complicated cases.

Amazing Tax Settlement – $1,600,000 Tax Debt Reduced to Zero!

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Karen M. was recently divorced and owed the IRS over $1,600,000 for a joint IRS liability she had incurred with her ex-husband.  The debt had accumulated over many years and, as is usually the case, included a significant dollar amount of assessed penalties and interest. The taxpayer was newly single, lived on a modest income and had no possibility of settling the debt owed to the IRS. After looking at the taxpayer’s situation and all of the available tax settlement alternatives, we determined that filing for Innocent Spouse Relief gave the taxpayer the most realistic chance of one day being free of the tax debt.

Innocent Spouse Relief provides a taxpayer relief from tax debt if their spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits.  While the benefits from obtaining this tax settlement option can be significant, it is usually difficult to obtain. Generally, a taxpayer requesting Innocent Spouse Relief must claim and document that he or she had no knowledge of the unreported income and did not receive the benefits of that income.

In the case of Karen M., we were able to provide documentation demonstrating that our client had no knowledge of the unreported income and had limited involvement in the financial matters of the family. We were also able to prove that she did not receive the benefits of the income that was never reported and that the non-innocent spouse had a history of hiding income from both her and the IRS.

Professional Tax Resolution and the taxpayer were thrilled when a letter was received from the IRS indicating that the Innocent Spouse filing was accepted and that the $1,600,000 tax debt was reduced to zero.  This is another good example of why CPAs, Enrolled Agents, and Attorneys are often so passionate about what they do.  In most cases there are tax settlement options available even in the most complicated situations.

Sending your kids to a summer day camp? Some of the expenses may qualify for the Child and Dependent Care Credit.

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When trying to determine tax settlement strategies, the best is to not incur the balance to begin with! Here is one tip to help you lower your tax liability.

If you paid for someone to provide care for your child while you, your spouse, or both were either working or looking for work, you may qualify for the child and dependent care credit. Certain expenses and providers qualified for this credit, and summer day camps are one of those qualified expenses.

Depending on the parents’ income, the credit can be up to 35 percent of the qualifying expenses. For one qualifying child or dependent, parents may use up to $3,000 of the un-reimbursed expenses paid in one year, and up to $6,000 for two or more qualifying individuals.

If you have a tax settlement issue and believe this, or other tax credits were overlooked on your past tax returns, the licensed tax experts at Professional Tax Resolution may be able to help lower or even eliminate your tax debt liability. There are time limitations for your tax settlements, so don’t delay and call us for a free quote.