Monday, September 27, 2010

Enrolled To Practice Before the Internal Revenue Service

After over 5 months of studying and 300 hours of reviewing Gleim material I passed the Special Enrolled Agent Exam! I have received my enrollment card and number and I am now permitted to represent taxpayers before the IRS. Please feel free to call, write, or email to ask questions about how to study and sit for the EA exam. I will be happy to entertain any questions anyone may have.

I want to thank my family, friends, co-workers, and Larson Financial, Inc. for all of the support I received during my studies and preparation!


Mike Wallen, EA

Partial Pay IA for business and individual!

The business came to us last year and had a serious IRS issue facing both the business along with the corporate officer personally. We had to review both his business and personal financial statements as the he owed the IRS $500,000 for the business and close to $200,000 personally on the trust fund portion of the liability. After further review, submission of documentation to the IRS, and months of waiting we were finally able to set up a payment arrangement for the business. We set up a monthly payment plan of $2000 per month. Usually the IRS wants close to $10,000 monthly to satisfy the statute requirements.

While reviewing the installment proposal for the business, the IRS decided to chase after the personal liability as well, sending collection letters, threatening levy, etc. This often happens and I would highly recommend representation for both the business and personal financial matters. If the business is represented and one thinks they can handle the trust fund portion on their own, think again! It is very difficult to handle both at the same time.

After submitting a financial statement to the IRS and the IRS allowing all necessary expenses, they agreed to a $250 a month plan with the individual. Therefore, the total plan is for $2,250 and our client can now make financial moves and decisions he could not make before.


Tuesday, September 14, 2010

New Company Saved From Alter Ego Assessment of $82,000!

We have a client in the State of New York that runs a restaurant. Prior to hiring us for the outstanding State of New York tax issues they had a third party come in and purchase the assets, goodwill, and inventory from our client. However, they conducted this transaction without regard to the State Tax Liens in place covering over $82,000 in sales tax and withholding liability. The State of New York was attempting to assess the buyer with the entirety of the liability owed!

We had to go back and recreate the transaction by showing the State of New York the purchase agreement, sales documents, and have the client cut a check to the State in the amount of $6,000 and another $1,000 or $2,000 to cover the sales tax in relation to the transaction. Yes, the State of New York charges sales tax on the resale of assets, licensing, inventory, and goodwill in a business transaction. Unbelievable. We had to go through the Bulk Sale Unit, which by State law a buyer and seller have only 15 days to report the transaction and pay either the liability owed by the seller in full, or pay for the value of the assets along with the applicable tax. If they do not abide by this rule the buyer can be assessed the liability.

After negotiations with the bulk sale unit and the filing of an appeal with the State of New York they agreed to allow us a conciliation conference to discuss the issues with the transaction. We provided all of the sales documents and a copy of the payment that was made to the State when we went back to correct the problem.

Last week we heard back from the State of New York and they decided not to assess the new business with the $82,000 and accept the payment made, with penalty and interest totaling $3,000 to settle the issue. Therefore all in all we saved the new business from lien filings, levies, and other collection action the State might take with regard to the debt.

If you are considering selling an asset, a business, or assets within the business look no further than Highland Tax Group, Inc. at to assist you with your issues. We can also be reached by phone at 720-398-6088.

Wednesday, August 4, 2010

Additional Tax Assessed but Penalty Abated

I had a gentlemen come to me recently with a letter called a CP2000. These letters indicate a taxpayer owes a tax because of a difference in the calculation on the return versus what the IRS has on record for the tax year. Most of the time the additional tax is in direct relation to cancellation of debt, a 1099 that was never received, interest paid by a bank, early withdrawal tax and penalty on a retirement distribution not originally included on the return but reported to the IRS. I think you get my point.

We read through the letter, compared it to his tax return and the increase in tax was correct. He was going to owe an additional $10,000 for the tax year. A year in which he owed nothing. The additional penalty was $2,000. I asked the gentlemen if he owed taxes previously, he indicated he has never owed in his life.

I gave him instructions to pay the tax in full, which he could do, so he cut a check for $10,000 (rounded up for simplicity) and we sent it in to the IRS prior to the expiration on the letter for assessment of the additional tax (very important to pay by the deadline date on the letter in order to save additional interest accruals). We also asked the IRS to abate the penalty under the first time abatement criteria whereby a taxpayer qualifies if they have never owed previously. After a few follow up phone calls, the IRS agreed to abate the penalty in full and he simply had to pay the remaining interest (we asked for the interest to be abated, doesn't hurt to try, but it was the interest calculated since the original tax return would have been due, along with the original payment date of April 15th, 2009. Interest in relation to the tax cannot be abated).

Our client was very happy with the outcome and it all was resolved in approximately 90 days or so.

So check twice when you receive a CP2000 or additional tax assessment letter, it may be to your benefit to do a little homework!

Thursday, July 8, 2010

Unemployed? Currently Non - Collectible May Be Right For You!

Are you currently unemployed. Did your business shut down because of the taxing authorities or other creditors? Are you left with nothing but a large trust fund tax bill? If so, think currently non-collectible.

Our client was shut down by the utility company for unpaid electric bills and he could not afford to continue to keep his business in operations. However, he was left with a tax bill of $37,000. He is a relatively young guy and wanted some time to think, get back on his feet, and get a job prior to seeking a resolution of his tax debt. The best strategy for him at this time is currently non-collectible. We sent in the financial statement form to the IRS (Form 433-F) and included copies of bills, unpaid bills, late bills and shut off notices. Clearly the client was barely making it. Therefore we asked the IRS to put the case into non-collectible.

The IRS granted our request and the client will not be responsible for paying on his tax bill for a period of at least 1 year. Sometimes our client's simply need time to figure out what will work best for them. In this case, CNC was the perfect strategy and when our client begins working again, we will investigate other strategies for him to pursue.

Wednesday, June 23, 2010

Saved From Siezure!

The client contacted us and hired us the same day of a deadline for a $15,000 down payment due to the State of North Carolina. They also needed to sign an agreement for $6000.00 per month to commit to a 3 month payment agreement. For obvious reasons this was not doable.

First and foremost the client did not have the $15,000 that day. Secondly, if they did pay the money down, and stuck with the payment agreement they would have continued to fall behind with their current tax deposits and possibly gone out of business. It was time to get to work!

We contacted the State Revenue Officer immediately upon filing of the Power of Attorney form. This was done at 1:30 - 2:00 our time, thus filed by 3:30 to 4:00 Eastern Time. Talk about the 11th hour! After speaking with the Revenue Office who worked the case, he indicated there was no room for negotiation and they would be shutting the business down by way of seizure of the assets and inventory. This process involves the State going to the business location, posting notice that they are going to be taking over the place, and in the ensuing months taking the assets and inventory to auction for sale. In other words, if we did not act quickly, we were not going to have a client for very long.

I asked for the manager's fax number, phone number, and called him and left a message. I also sent a fax with our intentions. We would have the client file and pay the last two months deposits for sales and use tax (totaling $13,000) in the next 5 business days, which after contacting the client, they could do. Secondly, we would structure an agreement whereby the client would remain current and compliant along with pay $2,500 per month for 4 months, with an increase to $4,000 per month until the liability was paid in full. We also cleared this proposal with the client prior to sending it out the door.

After a few phone calls with the Group Manager we were able to negotiate a favorable resolution for our client, keep the client in business, keep multiple people employed, and assist the State of North Carolina with the repayment of the tax liability. All in all this process took 21 days (6/1/10 - 6/21/10) from start to finish!

Thursday, June 3, 2010

IRS Error Corrected Results in $9,000 abatement

Today I found an IRS error that helped save a client $9,000. The taxpayer filed his 2008 941 for the 4th Quarter and according to our records he had a zero balance due. Our records retrieved from the Internal Revenue Service also showed the taxpayer had a balance due in the amount of $9,000 for a different quarter, the 1st Quarter of 2009. When we confronted the client with this issue he claimed he didn't have any employees during the 1st Quarter of 2009. We needed to dig deeper.

I asked his CPA for her records. She didn't have any record of filing the 941 for the 1st Quarter of 2009. So I then asked for a copy of the 4th Quarter return for 2008. She gave me not only the return but a 941C which is a corrected version of the same return. They had found some errors and needed to make adjustments. Oddly enough the 4th Quarter tax due was the same amount reported on the 1st Quarter of 2009 IRS transcript record. In the tax world, this rarely ever happens. Therefore, we needed to contact the IRS immediately to see if they posted the return incorrectly.

When I called the IRS today, I was on hold with the representative for over an hour (at $175.00 per hour that is quite the job). After working with him, he picked up on the same error. Apparently, the IRS had incorrectly posted the 4th Quarter return to the 1st Quarter of 2009, without crediting the payments (Federal Tax Deposits) and therefore showed a balance due of $9,000. We asked what the next steps were and he said, "nothing, we will send a notice in 4 weeks informing you of the adjustment, you will not need to do anything further on your end". When we informed our client he was very happy. His debt went from $23,000 down to $14,000!

We will keep you posted as the progress of this file moves forward. We are getting ready to execute a shutdown strategy that could save the taxpayer another $12,000!

Tuesday, June 1, 2010

$300,000 owed, $5,000 paid!

Mr. Brewer came to me in 2006 with more problems than you can imagine. His business was falling apart, his younger sister had embezzled money, and his business owed the IRS well over $1,000,000 in employment tax debt.

We had a lot of work to do before we could simply file and Offer to settle the debt for less than what was owed. We had to file multiple returns that were delinquent, shut down the business, make sure all debts that could be assessed against Mr. Brewer were in fact already assessed, and make sure the IRS stayed off of his back.

Further, we tried a few different paths prior to settling the debt under Doubt as to Liability. At first, we simply structured an installment agreement. Our client paid on this installment agreement for a little over a year. We then filed for abatement of the penalty, the debt was all Civil Penalty assessed to him personally. The penalty abatement was rejected and we lost in appeals as well. The IRS did not have any real concrete data other than the fact Mr. Brewer was an officer of the corporation and was responsible for the debts that faced him.

Back to the drawing board. . .

After much debate and thought, we decided to file for Doubt as to Liability. Doubt as to Liability means exactly what it says, knowing a liability exists, having the assets to pay the liability, but factually doubting the liability should have been assessed in the first place. We filed the Offer for $5,000 and some change, which equaled one period of liability for Mr. Brewer. Our offer was first rejected, indicating the IRS did not have enough factual data disproving the fact that Mr. Brewer should not have been assessed. We appealed this decision immediately.

After dealing with appeals for awhile, we ordered a new document. A document we had not had in the past but felt it would be helpful. We submitted an FOIA request. The Freedom of Information Act Request translates to information the IRS has but the client does not, nor does the practitioner. This was our key to success, the icing on the cake and. . . well you understand what I am getting at. After much debate, the IRS saw that Mr. Brewer's sister did in fact hide all IRS findings from Mr. Brewer, including visits by IRS personnel, IRS correspondence, and deadlines set forth. The client never signed a payroll check, a payroll tax return, or any other check of substantiative value. We received the acceptance letter a little over two months ago, the client paid the offer and the tax liens were released a few weeks back.

We can say proudly that our client was found innocent in a world where one is guilty at first glance.

Monday, May 10, 2010

$41,000 Civil Penalty Reduced to Zero!

This was a different case and something that I had not come across in a long time. When the IRS notices that a business has not filed, filed timely, or filed in error all the wage statements (Form W-2 and W-3) for a particular tax year they assess a penalty. Usually the penalty is $100 per form, or it can be as high as 10% of the gross figure on the actual wage statement. In this case, the penalty was $41,000. The other downfall to the IRS systematic assessments is they do not notify a business taxpayer until 4 years later. They are very far behind with catching up with one another and trying to get two government agencies on the same page is like trying to balance a two golf balls on top of one another.

Our client has been with us for sometime and we have actually already negotiated an installment agreement on the 941 and 940 balance dues. However, the Civil Penalty assessment against the business put this agreement at risk. We immediately filed for abatement of the Civil Penalty and sent it to the appropriate office (we also filed for a collection due process appeal on the lien). It took about 3 months to hear back but when we finally did the IRS agreed to abate all of the penalty!! It will take approximately 30 - 60 days for a release of tax lien, but their debt size has been cut by 25%! The reasons for filing for abatement is the fact they had arson take place (2 fires at the business location) that caused them to lose a lot of paperwork to fire damage. Our claim was in direct relation to the damage created and the fact the business had to recreate these same documents in order to file them with the Social Security Administration. P.S. The IRS administers the penalty for late filing and the Social Security Administration keeps the forms on file.

We still have another abatement request in for this particular (in relation to the 940 and 941 tax debts) taxpayer and hope to see similar results!

Friday, April 2, 2010

Offer Settled for 5% Of The Liability!

The client came to us last fall with a balance due of $20,000 in personal taxes owed to the IRS. The client had experienced job loss and had to cash out his 401k in order to pay bills and survive on a day to day basis. As you may not be aware, if one cashes in a 401k prior to the necessary retirement age, one can expect to owe a tax and a 10% early withdrawal penalty. This was the case with our client and therefore he came to us here at Larson Financial, Inc. to seek assistance with his outstanding tax debts.

At first glance it appeared the client had a decent job and might be able to afford a $333.00 payment to the IRS on a monthly basis. ($333.00 would be the payment based on a streamlined agreement for the debt to be paid in under 60 months). After further financial review, we concluded with the taxpayer that he could not afford such a payment. We decided to look at his financial portrait again and see if he might qualify for an Offer In Compromise.

After reviewing his financial statement (Form 433-A), all the taxpayer had available to him was a small brokerage account in his name. It had approximately $1,100 in the account. When calculating an Offer In Compromise one must offer the net equity in assets and available income. He spent well below under the national standards for food, clothing, and miscellaneous as well as housing and utilities, transportation, and health care expenses. His income was not that high either. Therefore, we felt he qualified based on his personal financial data. We decided to file for an Offer In Compromise. After waiting for 3 or 4 months, and providing an additional update as to the value of the brokerage account, the Internal Revenue Service accepted our Offer in the amount of $1,100! The taxpayer was more than appreciative and agreed to be a reference for us at Larson Financial, Inc!!

We are pleased to assist with the resolution of another satisfied customer.

Saturday, March 20, 2010

State of Kansas Partial Pay

We have worked with the State of Kansas Department of Revenue with regard to many different taxpayers. For the record the State taxing authorities are much more aggressive than the Internal Revenue Service. This means that if a business owes a tax the State will not hesitate to Seize, Shut Down, Levy Bank Accounts, Levy Customers, etc., to collect the tax.

This particular client came to us in the fall of 2009. She is a sports goods and outdoor equipment rental and sales store. She houses several different types of equipment typically used for summer sporting. However, with winter approaching in 2008 and with the downturn in the economy, she was unable to pay or file her sales tax returns and withholding returns for 2008 and a good part of 2009. The State of Kansas was getting ready to shut her down when she came to us.

After 60 days we were able to get the taxpayer current with her tax returns, she was missing 15 or 20 sales and use (these are filed monthly) and several quarterly and annual returns. Once the returns were filed the State came up with a balance due of over $120,000. Typically the State will allow for repayment of the debt within 5 years. However, our client could not afford to pay $2,500 or $3,000 per month toward the outstanding debt. As such, we sent in a financial statement for the business as well a personal financial statement for the officer of the company. This financial statement concluded she could only afford to pay $1,500 per month, an amount that would service the debt in 120 months versus 60. The State finally agreed and accepted our proposal. We were thrilled and so was our client as she could stay in business, afford to repay her debt and keep up with her current obligations. The client is another satisfied customer and agreed to be a reference as well.

Wednesday, March 10, 2010

Volunteer Income Tax Assistance Program

The IRS offers a service to allow taxpayers to get their individual and state tax returns prepared for free. There are a few limitations such as income and types of schedules used on each return, however, it is great for those who qualify. I currently volunteer for the IRS in Boulder at the Front Range Community College Boulder Campus Site. On the right hand side of my blog there is a link called VITA and it will take you to the respective IRS web page that offers site locations, information on the VITA program, and more specifically what taxpayer's need to bring to get their returns completed.

I have been volunteering since the first week of February and will continue through until April 10th. I love working with taxpayers and assisting them with their returns, questions, and of course letting them know what their refund will be. Feel free to drop by, our hours of operation are 10 a.m. to 2 p.m. every Saturday with the exception of March 20th and March 27th.

Tuesday, March 9, 2010

Links and Forms

I recently added a feature to my blog to include various webpages and forms that relate to the tax resolution industry and most importantly my clients and thier specific needs. Please take time to view all of the links. Following I have provided a breif breakdown of the specific links and pages:

- Larson Financial, Inc. - the homepage of the Larson Financial; the company I work with
- Internal Revenue Service - the homepage of the Internal Revenue Service, I find various news, publications, and other handy facts at this link
- Power of Attorney forms, Financial Statement forms, and IRS pages dedicated to explaining Installment Agreements and Offers. Please take a look as it will give you some insight as to how the IRS explains each specific resolution. Also, if you forgot a form or need one please utilize this tool to download the applicable form
- IRS forms and instrutions (2009 and prior tax forms if needed)
- Where to file addresses (more important than you think when you need a quick address of where to file a return with payment or without!)

Enjoy and let me know if any changes, subtractions or additions can be made.

Sunday, March 7, 2010

$56,000 Reduced to a $300 Refund!

We recently worked with a taxpayer who owed Use Tax to the City of Golden. When the taxpayer came to us last fall he owed $56,000 to the City of Golden, figures which stemmed from an Audit. Further, the day he hired us the City was getting ready to shut his doors. When we spoke with the City Revenue Agent she indicated she was on her way out to the business location with the Sheriff. We knew the City meant business so we got to work right away.

After speaking with the City it was made apparent to us the client did not supply the City with information to allow them to prepare and assist him with the returns and payment of Use Tax. For those of you who are not aware Use Tax is based on the value of equipment, machinery, tools, etc that are "used" within the business. The City usually assesses a 3% tax based on the value of the equipment used within their jurisdiction. However, the figures used by the State were based on preliminary lists of tools, equipment and machinery, half of which was not used in the business. We had to convince the State to first back off of seizure, which they did. They allowed us time, (1 day) to provide the additional information they had been asking for to come up with a figure that was accurate for the Use Tax. We informed the client of the good news (The City would allow him to remain in business) and he delivered the majority of the documents the very next day.

After months of research, sending in supporting documents to the City, working with the taxpayer and the City, they finally arrived at a figure. The taxpayer had been forced to pay $10,000 to the City prior to working with us. Therefore, he had a credit with the City of Golden. The tax owed for the periods in question, over 5 years worth of tax periods, came to around $9,700. When it was all said and done, he was issued a refund. All liens were released and the taxpayer will continue to operate a profitable business without fear of enforcement.

Monday, March 1, 2010

Tax Debt Reduced To A Refund!

Here at Larson Financial, Inc. we dedicate ourselves to assisting those with their tax issues, whether they are actual or substituted debts. I recently worked with a taxpayer to reduce two balance dues with the IRS and the State of New York to refunds.

We had been working with the taxpayer since April of 2009. At that point in time he had an outstanding debt with the IRS in the amount of $25,000 with several missing returns (2003 through 2008 Personal Income Tax Returns). We were able to successfully keep the Internal Revenue Service from taking any aggressive collection action while we allowed the taxpayer time (6 months or so) to work with his CPA to get the returns completed. Once the returns were completed, his balance due with the IRS was processed to zero and he received a refund of $2,000 last month. The refund was attributed to the fact he had been levied in the past and the monies were applied to the Substituted balance due. Therefore, he was entitled to receive this money back.

With regard to the State of New York, he had actually paid his assessed balance due for the 2003 and 2004 tax years. Meanwhile, he filed all of the State of New York returns to allow for processing. Once the returns processed we began our follow up for refund. Now here is the tricky part, because the modules were old, he was not entitled to a tax refund of what monies were withheld for that year, or any credits. However, he paid approximately $25,000 on the assessed balance in January of 2009, therefore, he was entitled to receive this money back, with interest. Finally, between January of 2010 and February of 2010 the refunds were processed and he was issued two checks.

We were informed today that all checks have been received totaling just over $27,000. Further, this particular client agreed to be a reference as well.

Thursday, February 18, 2010

Who is Joe Stack?

I felt compelled to write about the recent tragedy that took place today in Austin, Texas. I have dealt with people of this nature before as a practitioner and never seem to agree with the selfish nature which they represent. I did not look too far into it, but I am assuming Joe Stack had a family, friends, parents, and siblings. I am of the opinion flying a plane into a building was a self-centered, dangerous and hurtful thing to do, not only to the people that were close to him, but to the people affected by the crash. It absolutely infuriates me that someone could blame a government agency for all of their financial and emotional woes.

I read through Joe Stack's memorandum or suicide note, his rants and raves concerning our government, the health care system, and his inability to be successful in a country where apparently he was being held back by the tax code. He writes that he was upset with the IRS although it is not clear what he is upset over. As a practitioner we see these types of people come across our desks from time to time, thankfully not as often as of late. We usually call them "tax protestors". However, it is virtually impossible to assist a taxpayer who feels the "system" within which we live is corrupt and unfair. Stack continued to go on about the rich and large corporations controlling smaller economies, particually Austin. I have one statement for an individual of this nature; if you do not agree with the tax code, the American Dream, and how our wonderful country operates; giving us roads, schools, the best health care in the world, and the freedom to become anyone we want, then leave this country to find greener (or shadier) pastures elsewhere. Do we forget how lucky we are to be able to drive to work in the morning without having to show our passport at every stop sign? Do we forget we don't have militia monitoring our every move when we need to go out shopping for groceries, go to the movies, the book store? Do we forget that we become anyone we want with hard work, education, and effort?

Stack continues to say that he didn't file for several years, and when he went to file, he apparantly owed money to the IRS. He then seems to point the blame yet again at his accountant for missing un-reported income. He goes on to say he missed the appeals timeline and blames the government for this. When you live in a country as affluent as ours, it takes quite a bit of money, so much money we are in the worst economic crisis of our times, to keep this country afloat and operating. If you have ever used a public road, ate lunch at a park, walked on a sidewalk, attended school, all without the threats of terrorism breathing down your neck, then yes, we must pay a tax of some sort. I am sorry to say that Stack was mistaken when he took his own life. He seemed to be trying to get away from one of the two things we can never get away from; taxes. I think we can all agree on the second thing we cannot get away from.

It is sad to see the day when Federal Employees, or any employee or hard working American for that matter does not feel safe going to work in the morning. I have worked for everything I have and will continue to do so. I hope that no one ever tries to take it away because they don't feel it's fair, legal, or equitable to pay income tax.

My prayers go out to the families of any victims, and the victims themselves stemming from today's tragedy.

Tuesday, January 26, 2010

OIC Settled for $40,000

This particular taxpayer has owed the IRS for the last 10 years. His liability stems back to two business debts, totaling over $1,000,000 combined. He has been my client since 2004. He owned two businesses of which were Alternative Health Care and Choice Health Care. Mr. Alfred Givens was more than excited to hear our recent news concerning his account. He has since been assessed personally for the tax debt the business accrued.

The history of the account shows the client was unable to make federal tax deposits during his existence with the first business and finally was able to get current with his second business. However, due to his inability to continue to stay current and pay back the past due debt on a monthly timetable, he decided to close his business.

The IRS assessed the trust fund recovery penalty against our client personally and we have since completed two resolutions on his behalf. First and foremost, we were able to discharge a tax lien on a piece of property. The property sold for a little over $60,000 and after it was all said and done the IRS realized $55,000. Secondly, he had another piece of property and this allowed us to finally file for settlement.

We filed our Offer In Compromise in June of 2009. We submitted an OIC for $40,000 due to the fact our client's last piece of property (commercial) was going to sell this past year. Finally in December our client found a buyer and away we went. After it is all said and done we have saved our client well over $910,000 in tax debt as our final OIC was settled for $40,000. The closing should take place in the next week and will allow for all tax liens against our client to be released in full!

We are very excited to bring these issues to a close and our taxpayer can finally live his life again!

Monday, January 11, 2010

$60,000 Savings in Hawaii

Aloha! I wanted to tell my readers about the most recent successful resolution for our client located in the beautiful State of Hawaii. He has agreed to be on our reference list at Larson Financial, Inc. and has also agreed to submit a client testimonial. Feel free to check it out on our website, which is linked on my homepage.

We worked with the taxpayer and the IRS to establish an installment agreement on a debt of over $70,000. The taxpayer will be paying $140.00 a month for the next 7 years (remaining life on the collection statute). While the payment plan will go for a long period of time, as long as he remains current and compliant, files timely, and pays his installment agreement, the total payout will be $11,760.00. Therefore, over time, he will save at the very least $60,000, not including accruals which will amount to $120,000 total with penalty and interest over the 7 year period.

This strategy was very beneficial to our client due to the fact there was so much to be had in net savings. We also resolved a State of Hawaii liability for the same client, he owed approximately $12,000. We set up a long term payment plan of $150.00 per month that will be revisited in 1 year due to limitations on their payment system.

Our client is satisfied not only because of the savings, but the headaches and stresses that were removed from his life due to our representation on his behalf at Larson Financial.

Wednesday, January 6, 2010

Bank Levies?

Has the IRS ever threatened to Levy your bank accounts? Has the IRS ever taken money out of your bank account? If so, it is imperative to know how to handle a situation when a levy arises.

First and foremost, please give us a call to consult as it will be difficult to get a levy released or any money back once you have been levied. However, the IRS will consider a release based on a few items; has the levy caused a hardship, caused payroll to bounce, or caused current taxes to go unpaid? When we deal with ACS specifically or a Revenue Officer it is important to make a case before one calls the IRS and complains about the levy. A taxpayer or representative must know a few things first:

- Has the levy actually frozen monies yet?
- Has the levy caused checks to bounce?
- How much has the levy frozen?
- What bank accounts, how many accounts, and at which bank was the levy applied to
- Obtain the fax, phone, and contact for the legal department through the bank handling the levy (this may be different than the actual branch bank)?
- What items will not clear or be paid due to the levy (payroll, tax deposits, lease, mortgage, unpaid bills, etc.)?
- Will the levy cause a hardship (foreclosure on home or business location, 3 day notice to vacate on a lease, shut off notice from Electric or Power company, water turn off notice, etc.)?

The above items will assist us in preparation for dealing with a possible release. Remember, there is only a 21 day time period on bank levies, therefore, a taxpayer or his/her representative must act quickly. Once the money is gone, it is gone.

If you are dealing with a levy, or have been threatened by an IRS representative or communication indicating you will be levied, call immediately to discuss the possible resolution thereof.

Tuesday, January 5, 2010

IRS Tax Lien? Selling Real Property?

If you or someone you know is selling real property, and there is an IRS tax lien in the way, there is a specific process to be utilized.

A Certificate of Discharge Application is imperative if one is planning on selling or buying real property. Whether the IRS tax lien covers the full amount of equity in the property, part of it, or none, it is still important to notify the IRS of the transaction. If something gets missed, you or someone you know may purchase property with a Lien still in place (hard to believe but I have seen it happen before).

Most recently, we assisted a taxpayer who had a lien for approximately $150,000. The property was selling for $150,000, but the selling proceeds were being split 3 ways, 2 parties did not have any tax liens, one did. Therefore, with all the appropriate paperwork required by the Internal Revenue Service in, the IRS discharged the tax lien to allow the sale of property to take place, 1/3 of the proceeds to go to the IRS and the remainder to go to each seller.

This process can be complicated and if there is a document missing, it can delay processing. Much like the subordination process, the IRS typically takes 30 days to finalize an application. Therefore, it is imperative to get an early jump on the application and make sure follow up's are completed with each appropriate party. As always, feel free to call me concerning this process at it can be a time consuming, lengthy, and complicated one.

Back At It!

I must apologize to my readers for taking so long in between posts. I was working intensely on school projects as well as work at Larson Financial. I will attempt to continue to post information concerning the IRS and the work I have completed for my clients.

I hope to be of service to all involved with the tax community at every level.


Does Your Business Use Factoring?

Many businesses depend on others for financing, such as banks and more specifically, factoring companies. Many of these factoring companies will factor receivables up until there is an IRS tax lien of record. When a tax lien is filed, usually for outstanding payroll taxes, the factoring company can no longer continue to offer funding to a business. Therefore, we must step in immediately to negotiate between our client, the factoring company and the IRS.

Working with the IRS as many of you know can be a grueling process. I highly suggest you contact me at Larson Financial for assistance in dealing with the IRS at any level, let alone dealing with a factoring company and a tax lien. Once we find out a company works with a factoring company, we must endeavor to secure a subordination of Federal Tax Lien. Once secured, the factoring company will be in first place and thus there is little or no risk for them to fund. However, prior to, a factoring company can delay funding for a short to a long period of time, which can delay a business from operating. The subordination process can take up to 30 days, therefore, it is imperative to keep the IRS from filing a tax lien and if they do, secure a subordination immediately. There is a process of course, as with any resolution at the IRS level, but they will work with you and process your claim usually within 30 days. Further, this type of process can speed up resolution of the case, as our clients realize the risk and want to get all resolved as soon as possible.

As always, it is imperative that a business remain current and compliant throughout the process as further accruals can delay any resolution from taking place.

We recently were able to work between the IRS, our client, and the factoring company to enable the factor to continue to fund our client with the lien in place, while our subordination application was pending. Once agreed to, it is usually only agreed to for a 90 day term, therefore we must revisit if there is not a resolution in place such as an installment agreement. We were able to work with the IRS on a weekly basis until our application was approved. Now that it has been approved, we will be working with the IRS to secure an installment agreement to satisfy the debt over time.

I hope this short memo helps explain the importance of dealing with the IRS and more importantly factoring companies.