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.