Services
IRS Tax Problem Solving — Tax
Controversy Resolution
The IRS is the most powerful bill collector in the
country, and maybe in the world.
While other creditors have to go court and persuade a
judge that you owe money, the IRS can simply issue an assessment based
on its own calculations.
The IRS gets to play judge, jury, prosecutor, and
executioner in declaring that you owe tax money.
No separate judge, no jury, no law suit, no judgment, no
fuss, no muss (for the IRS!).
But an IRS assessment that you owe tax money can be a
huge fuss for you, the taxpayer!
It's easy for the IRS, but it's hard for the rest of us.
Once the IRS has decided that a taxpayer owes money, if
the debt it has assessed is not paid promptly, the IRS can then go
ahead to collect on that debt by seizing almost anything you own, such
as
- bank accounts,
- wages,
- cars,
- houses,
- jewelry,
- accounts receivable,
- even your valuable Willie Mays baseball card from
1964.
The IRS can take almost anything of value that belongs
to the taxpayer to satisfy the tax debt the IRS has declared and
assessed is owed.
And again, unlike other creditors, the IRS does not have
to sue the taxpayer, it does not have to go to court, it does not have
to persuade a judge or jury that it is right, it does not have to get a
judgment from a court.
Instead, the IRS gets to decide for itself whether you
owe it money and how much is owed. Once it decides that you, the
taxpayer, do owe it money, it can unleash its extraordinary power to
collect, to take your money and your stuff.
But even when it looks bad, really bad, there are
solutions to IRS tax problems.
- Sometimes, the IRS makes a mistake and the taxpayer
does not really owe the money. (Who ever heard of a large,
governmental bureaucracy ever making a mistake? The government never,
ever makes a mistake, does it?)
- Sometimes, the IRS has taken too long to try to
collect, and time has run out. If time has run out on the IRS, the
taxpayer can be released from ever paying what the IRS had earlier
claimed was due.
- Sometimes, a taxpayer just does not have the income
or the assets to pay, even if he or she were allowed to take months or
even years to make smaller payments over time. If a taxpayer
is in this situation, the IRS can agree to take less, sometimes much
less money than what it says the taxpayer actually owes.
- Sometimes, a taxpayer does not have the money to pay
the whole bill right away, but can pay what he or she honestly does owe
in installments, over time.
- Sometimes, there are other situations that enable a
taxpayer to show that the tax debt is not as big as the IRS says it is,
or that the IRS does not need to put its claws into everything the
taxpayer owns to get its due.
Let us help you find the right solution to your tax
problem, and end your IRS nightmare.
Finding the solution to your IRS tax problem is what we
do. This is called IRS Problem Solving, and is sometimes
known as IRS Tax Controversy Resolution.
We help individuals and businesses who are in trouble
with the IRS solve their tax problems.
When the IRS comes knocking on your door, saying you owe
money and threatening to seize your bank account, garnish your
paycheck, your jewelry, art collection, baseball card collection, your
house or your car, you want a strong advocate to fight for you and find
a better solution.
Let us talk to the IRS for you, so that you don't have to!
Once you hire us to represent you, you won't have to
fear getting phone calls from the IRS or surprise visits from their
agents. You will have a lawyer to talk to them for you
We can help.
Services
we provide — We can help you with:
Federal Tax Lien
Release
Once the IRS determines that a taxpayer owes tax, a lien
on all of his or her property, income, and assets is automatically
created.
If the IRS then makes this lien public by filing it with
the appropriate public record recording authority (such as the County
Clerk), the Federal Tax Lien will show up on the taxpayer's credit
report and damage his or her credit rating.
Just try getting a loan once the IRS files its Federal
Tax Lien with the County Clerk!
Getting a mortgage or home equity loan or automobile
loan becomes difficult or impossible. This can cause enormous
problems if the taxpayer is trying to buy or sell an apartment or a
house.
Action must be taken.
If you have received a deficiency notice or if you have
been assessed for taxes due, or a Federal Tax Lien has been filed,
please call us to make an appointment to discuss what can be done to
resolve this serious but solvable problem.
IRS Levy Release
When the IRS determines that a taxpayer owes taxes
money, and assesses the taxpayer for that tax debt, the IRS then has
the power to take possession of the taxpayer’s property without going
to court to get a judgment. This is known as the IRS's power
to “levy.”
The IRS can levy a taxpayer's money or property or both,
whether it is real estate or personal property. It can be
your car or jewelry, your paycheck, debts owed to the taxpayer,
accounts receivable — almost anything that you, as a taxpayer own or
expect to own in the future.
Taxpayers who have received a notice of levy, or have
already been levied, can take steps to prevent the levy, or to undo one
that has already taken place.
IRS Seizure
Defense
Levies on a taxpayer's property can be divided into two
categories. When the IRS acts to collect on taxpayer's tax
debt by taking real or tangible property which the taxpayer possesses,
such as the taxpayer's car or jewelry or house, this is often referred
to as a "seizure," as in "the IRS seized his car and it seized her
emerald bracelet."
When the IRS acts to take money, that action is often
called a “levy” as in “the IRS levied her checking account and now we
are working to persuade the IRS to release the bank levy.” Or, if
instead the IRS orders a taxpayer’s employer to take money from the
taxpayer’s paycheck, this type of levy is called a “garnishment.”
Despite the IRS's broad powers to levy, garnish, and
seize, taxpayers do have defenses to prevent seizures or undo them.
A taxpayer facing seizure of property needs to act with
the help of a professional who can analyze the situation and fight for
them to prevent the seizure, or undo it, or minimize the IRS's efforts
to separate you from your property.
Wage
Garnishment Defense
If the IRS determines that a taxpayer owes taxes,
assesses the taxpayer for that tax debt, and the taxpayer fails or
neglects to pay, the IRS has broad power to levy or seize the
taxpayer’s money and property to pay that tax debt.
This power of the IRS includes the power to force the
taxpayer's employer to pay the IRS out of the taxpayer's paycheck
instead of paying the taxpayer himself or herself!
Taxpayers can take steps to prevent their paycheck from
being garnished or to reduce or minimize the pain of a wage
garnishment, but the problem cannot be ignored.
In fact, the IRS has extraordinary power when it comes
to wage garnishments which extend far beyond those of ordinary
creditors.
An ordinary creditor generally has the power to seize no
more than 10% of a debtor’s pay check. And the ordinary creditor can
only do that after it 1) sues the debtor in court, 2) wins the case, 3)
gets a judgment from the court, 4) takes that judgment and dockets it
with the County Clerk.
The IRS, on the other hand, which is no ordinary
creditor, can skip steps one through four, and along with skipping
ahead to collection, in most circumstances, the IRS can attack a
paycheck and compel the taxpayers employer to hand over to the IRS
much, much more than 10% of the taxpayer’s paycheck.
This can be an enormously intrusive and life-disrupting
act by the IRS which can destabilize a person’s very livelihood and
take away any financial security.
Contact us to start coping with this threat to your financial security
and your paycheck.
Trust
Fund Recovery Penalty Defense
When a company withholds payroll taxes and FICA taxes
from its employees, it is obligated to then pay the tax money it has
withheld to the IRS. If it does not, the Government must
cover the missing money for the employee who had his or her wages
withheld.
Because the United States guarantor for an employee's
withheld wages, the IRS is highly motivated to collect the taxes which
have been withheld, or should have been withheld, but have not been
paid to the Government. In short, the Government does not
want to get stuck with the bill.
To avoid getting stuck with the bill that should is
properly the employer's responsibility, the IRS's ordinarily broad
power to collect tax debts are especially broad here.
The IRS can levy against individuals in a company to collect on for the
company's "trust fund" tax debt
Not only can the IRS use its levy power against the
employer company, it can also seek payment from individuals involved in
running the company.
The IRS can seek payment from individuals personally,
even if the company is a corporation. The IRS does not have
to go to court to persuade a judge to "pierce the corporate veil" the
way an ordinary creditor would to collect a company debt from an
individual.
Ordinarily, it is very difficult for a creditor to hold
an individual at a corporation responsible for the company's
debts. But, for the IRS it's easy.
The IRS can hold officers and directors personally
responsible for the Trust Fund Recovery Penalty. It can hold
shareholders personally responsible.
It can even hold employees responsible, even if they do
not own a single share of stock in the company!
If the employee has decision making power over which
creditors get paid and which do not, or which get paid first, and which
are delayed, the IRS can consider holding the employee personally
responsible for the company's failure to pay withheld trust fund money
to the IRS.
If the employee was involved in deciding to pay some
creditor other than the IRS before paying the IRS, the employee might
be held liable.
Because the IRS is especially motivated to collect on
the Trust Fund Penalty Recovery, it is especially important to have
representation to protect you if the IRS claims that the Trust Fund
money is due.
Penalty
Abatement
When the IRS determines that taxes are owed, and they
are late, the taxpayer is assessed not only with the tax, but with
additional penalties that are tacked on and increase the total balance
due. Frequently, penalties added on makes the tax bill much, much
larger.
Sometimes, even if the IRS's calculation of what the
actual tax due is correct, the taxpayer can get the penalty charge
reduced or even waived totally.
If, for example, the taxpayer has a reasonable excuse
for how the problem occurred which ended up causing penalties to be
imposed (for example, a flood destroyed records which caused a
significant delay in preparing and filing a tax return) AND the problem
has been solved so that it’s not likely to happen again, AND the
taxpayer is now current in filing returns and paying tax, there may be
an opportunity to reduce the tax due by getting penalties reduced or
removed. This is called "penalty abatement."
We can do a careful analysis of the tax and the
taxpayer's circumstances, and get a sense of whether the tax is
correct, or not, and whether the penalty might be abated, reduced, or
wiped out entirely.
Offer in
Compromise
If a taxpayer has been assessed for taxes that are just
too much to handle, for example, there is not enough income to pay the
tax, or even to do so over time. Or the taxpayer does not
have enough savings or other assets to pay.
In plain, blunt language, if the tax payer is too broke
to pay, the IRS will sometimes agree to accept less than the full
amount owed (or "compromise" the debt) and "wipe the slate clean" so
that the taxpayer can make a fresh start without an impossible tax debt
hanging over the taxpayer forever more.
Also, the IRS will sometimes agree to accept less than
the full amount due if there is genuine doubt that the taxpayer
actually owes the money.
The Offer in Compromise program is a truly great
solution, but only if the taxpayer qualifies for it.
With an Offer in Compromise, a taxpayer can settle his
or her tax debt for substantially less than the full amount due.
Taxpayers should be aware of pie-in-the-sky promises
that some tax resolution professionals make.
In fact there are some people who describe themselves as
tax resolution specialists who will promise a taxpayer that their tax
debt will be settled "for pennies on the dollar," and then take a fee
for filing an offer in compromise without determining whether the
taxpayer qualifies for this program, or will do so even knowing that
the taxpayer does not qualify.
Because there have been a number of self-described
specialists who were offering such baseless pie-in-the-sky promises,
the IRS issued a consumer alert warning taxpayers to "beware of
promoters’ claims that tax debts can be settled for 'pennies on the
dollar' through the Offer in Compromise Program." See
IR-2004-130.
Some promoters promise settling a tax debt for "pennies
on the dollar" where the promoter or sales person does not determine
that a taxpayer qualifies, or even submits an offer in compromise
application knowing that the taxpayer does not qualify.
Let us determine if an Offer in Compromise can help you
We will only recommend that a taxpayer submit an offer
in compromise if, after a careful analysis of the taxpayer's financial
situation, the taxpayer seems to qualify.
We cannot guarantee that an Offer in Compromise will be
accepted by the IRS (no one can honestly make that guarantee — only the
IRS can decide that). But we can and do promise to suggest an
Offer in Compromise if your situation appears to qualify. And
we of course will not to advise making an Offer in Compromise
willy-nilly.
Installment
Agreements
Sometimes taxpayers really do owe the IRS money.
(We don’t like paying tax either, but we accept the fact
that the federal government has the power, and uses that power, to pass
laws and rules imposing tax, and to collect taxes due under the law.
Note that we disagree with those who contend discredited arguments such
as that the income tax is unconstitutional. Court’s have heard and
repeatedly rejected these types of argument. People who espouse them
have been labeled “tax protestors,” and are treated harshly by the
courts. For example, the most famous tax protestor in recent times,
Hollywood film star Wesley Snipes has been sentenced to three years in
prison for failing to file tax returns based on repeatedly rejected
legal arguments.)
Sometimes, when taxpayers do actually owe money to the
IRS, they owe less money than the IRS says they do. But after
working through the numbers, whether the amount due is what the IRS
originally said, or whether it is some amount less than that a taxpayer
may be facing a real bill for taxes due.
We can help you get the IRS off your back by negotiating
a reasonable installment agreement which allows you to payoff the debt
over time.
Negotiating and entering into an installment agreement
can put an end to threats of levies on your bank account, garnishment
of wages, seizure of your assets, and all the other things the IRS does
to collect on a tax debt.
"Currently
Uncollectible" Status
Sometimes a taxpayer simply does not have the income or
assets to pay a tax obligation. And there is no prospect of
changing that any time soon.
Yet the IRS keeps sending threatening letters, making
threatening phone calls, and trying to collect where there just isn't
the money to pay.
In situations like this, a taxpayer might be declared as
being in "currently uncollectible" status. This does not make
the tax obligation disappear or go away, but it does stop the IRS's
collection efforts.
"Currently uncollectible" status is a short-term
solution designed to give a tax payer space and breathing room to
rebuild their lives, income, and financial resources.
By taking time to "get back on their feet," once the
taxpayer has re-established better, more solid financial circumstances,
the questions of handling the tax debt can be looked at again, when the
taxpayer has more resources and capacity to resolve it.
Delinquent/Late-Filed
Returns
Taxpayers who want to solve their tax problems must be
up date on their tax returns.
If a taxpayer has forgotten to file one or more tax
returns, or have otherwise failed to file, whether they were aware of
it or not, the first step to making an agreement with the IRS to get
out of trouble is to get current with filing tax returns.
This is generally a necessary prerequisite to entering
into an installment agreement or offer in compromise or even getting
taxes discharged in bankruptcy (contrary to a common misconception,
even among lawyers and accountants, in some circumstances, tax debts
can be discharged in bankruptcy).
Like one after another villains in James Bond movies
have said to the super-spy, “No deals, Mr. Bond,” the IRS generally
takes the same position with taxpayers who have unfiled tax returns:
“No deals, Mr. Taxpayer.”
Statute
of Limitations Analysis — Is Time on Your Side?
After assessing a taxpayer for unpaid taxes, the IRS has
only so much time to then collect it. If it doesn't do so
within the time period, all of the powers given to the IRS will not be
enough to allow it to collect the tax it assessed.
Like all the king's horses and all the king's men who
could not put Humpty Dumpty together again, once the Statute of
Limitations runs out, a tax debt which the IRS has assessed cannot be
collected.
We can help analyze where a taxpayer stands in relation
to a tax debt. Has time run out for the IRS? How
much time is left? If very little time is left, how will that
affect negotiations with the IRS? Sometimes, even if the IRS
still has time, having only a short time left can help a taxpayer
negotiate a favorable settlement.
Call us to find out if the statute of limitations is
putting time on your side.
Collection
Due Process Appeals
The Collection Due Process (“CDP”) Hearing is a very
valuable tool taxpayers can use to work out a reasonable resolution to
their tax problem with an appeals-level officer at the IRS before the
rank-and-file collectors seize money from your pocket, your bank
account, or your pay check.
Imagine being able to work out a reasonable resolution,
one that is less painful, less disruptive, less onerous than freezing
your bank account and seizing it, or garnishing your paycheck: The CDP
hearing is designed to make this possible.
But, while all taxpayers have the right to a CDP
hearing, these valuable rights are very time-sensitive, and if you are
not paying attention, not opening your mail, and if you don’t act
quickly, you can give up your valuable CDP rights never to have them
again (well, almost never – read about Allan R. Pearlman’s rare and
unique victory in getting the IRS to restore a taxpayer’s CDP hearing
rights after the IRS wrongly took them away by click here -- see "IRS
Backs Down and Apologizes" ).
CDP Hearing rights are useful, valuable, but they are on
a short fuse, and the rules can be tricky. If you don't deal with the
bureaucrats at the IRS all the time, you can protect your rights by
getting the help of a professional who does.
Other
Tax-Related Appeals and Audit Reconsideration
In addition to Collection Due Process Appeals, there are
sometimes other methods available to challenge a decision made by one
or another bureaucrats at the IRS. For example, two such methods
include a procedure known as a CAP Appeal, and after an audit gone
wrong, seeking audit reconsideration.
We examine the possible remedies and use the best
methods and procedures for getting a resolution which is called for by
a taxpayer’s unique situation.
Discharging
Taxes in Bankruptcy
Contrary to a common misconception, sometimes taxes are
dischargeable in bankruptcy. Many people are surprised about
this, even a number of lawyers and accountants. Still, it is true,
though somewhat complex. A taxpayer’s unique situation must satisfy
several exacting standards for taxes to be discharged in bankruptcy and
then there is an array of additional serious factors to consider.
We are able to analyze a taxpayer’s unique circumstances
and situation and analyze whether bankruptcy is possible, and if
possible whether it’s a good solution.
United
States Tax Court
Sometimes, after trying to resolve a problem with the
IRS using the range of procedures and solutions that exist within the
IRS’s problem resolution system, a taxpayer has bring the matter to
court to get a judge to decide who’s right, the taxpayer or the IRS.
Usually, that means going to United States Tax Court.
In addition to being admitted to the bar of the courts
of the State of New York, the federal trial courts in the Southern and
Eastern Districts of New York, the federal appeals court at the United
States Court of Appeals for the Second Circuit, and the United States
Supreme Court, Allan R. Pearlman is admitted to practice before the
United States Tax Court and can bring a taxpayer’s case there when
appropriate and necessary.
Other
possible solutions
Sometimes a person’s unique case involves a solution
which we just have not thought of yet and have not described here.”
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