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Showing posts from January, 2012

Offer in Compromise versus Partial Payment Installment Agreements for back IRS taxes-personal and business taxes

Today I was able to negotiate a partial payment installment agreement for a couple that owes over $140,000 in back civil penalty taxes (a trust fund taxed assessed against them for an old corporation which owed back payroll taxes) for $252 a month over the next four years (the time remaining on the collection statue).  The couple makes decent money, over $7200 per month which makes this a pretty decent deal for my clients.

Although this is not considered technically an Offer in Compromise, it does allow the taxpayer to "settle" for paying approximately $12,000 on over $140,000 of tax debt, a whopping savings of over 91.5% of the total tax debt (when you consider IRS interest which is compounded daily on the civil penalty taxes-personal income tax debt also accrues penalties, but the trust fund recovery penalty in itself is a penalty so only interests accrues on the account).

Now if my client comes up with around $12,000 or even a little less (by borrowing from friends or re…

IRS Customer Service Getting Worse Per Associated Press Article Highlighting The National Taxpayer Advocate's Annual Report to Lawmakers

Watchdog: Growing IRS workload causing problemsGovernment watchdog: Tight IRS budget, growing workload straining agency, hurting taxpayersBy Alan Fram, Associated Press | Associated Press
WASHINGTON (AP) -- The Internal Revenue Service can't keep up with surging tax cheating and isn't sufficiently collecting revenue or helping confused taxpayers because Congress isn't giving it enough money to do its job, a government watchdog said Wednesday.

To cope with its growing and increasingly complex tasks, the agency is relying more on computer software designed to weed out fraud, Nina E. Olson, the national taxpayer advocate, said in her annual report to lawmakers.

But errors are abundant, creating even more work for the agency when taxpayers dispute its findings, the report said. In addition, it said the agency is increasingly relying on computer systems to evaluate tax returns that sometimes end up eroding taxpayers' rights, and people are having a harder time ge…

IRS Tax Lien Certificate of Discharge | Converting Your Business Entity to Save Thousands in Penalties, Interest and Principal Tax

The best way to obtain relief from a large tax debt on your business is to reorganize into another entity. This taxpayer owes nearly $70,000 however I was able to have the IRS agree to release the assets of the business to use in another business entity for $7231.  This startegy commonly referred to in the tax resolution industry as a "new-co" or new company formation will provide you with the most bang for your buck.  
This strategy works if the assets in your business (including accounts receivable) are significantly lower than your federal tax debt.  I have represented hundreds of taxpayers using this resolution strategy.  My fee for a new entity start-up range from $2000 to $5000 depending on the size of trust fund portion of the payroll tax.  Contact me if interested at 720.340.4065.