The IRS has the power to send out a summons to a taxpayer or other individuals who might have some necessary information regarding your taxes or information necessary to determine your tax liability.
The summons is an investigatory tool used by the IRS that compels you (or others as stated above) to produce information or come to a meeting at the IRS office. In my experience, a summons is not issued unless the taxpayer has really not been very forthcoming at all in providing information or working with the IRS.
The summons can be used to compel testimony, force a taxpayer to bring books and records to prepare a tax return, or bring in documents to assist the IRS in preparing a Form 433 financial statement. The third-party summons may be used to compel information from another party such as a financial institution, third-party record keeper, or any other person with relevant information.
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In looking through my web site statistics, I noticed that several people have searched the internet search engines and have come across my site with the search term "Do Offers in Compromise Work"?
Maybe you’re asking, what is an offer in compromise. Well, briefly, an offer in compromise is an IRS program that allows taxpayers to settle their tax liabilities for less than they actually owe. It is based on your reasonable collection potential - not on how much you owe.
So, the short answer to the question of, "do offers in compromise work" is, YES! Many people have been able to settle their IRS tax liabilities for much less than they actually owe. The offer in compromise doesn’t work for everyone, so I would encourage you to speak with a qualified tax professional who handles offers in compromise to see if you would qualify.
QUESTION:
I have heard that the IRS is going after small sole proprietorship businesses more aggressively. This doesn’t seem fair. What is the reason for them doing this and what can I do to protect my business?
ANSWER:
In a recent report the U.S. Government Accountability Office showed that at least 61% of sole proprietors underreport their net business income each year. This adds to the growing “tax gap” that the IRS is trying to shrink. The tax gap is the difference in the amount of taxes that should have been reported and paid and the amount of taxes that were actually reported on tax returns. The underreporting is not a huge problem overall with only 10% of underreported taxes being greater than $6,200.00. But as they say, one bad apple can spoil the whole bunch. The reason sole proprietor income is subject to being underreported more easily than other types of income is that there is likely not a third party reporting income to the sole proprietor and there is no withholding requirement. You should work hard to make sure that you keep accurate income and expense records for your business to make sure you can prove all expenses to the IRS should you be audited. That is one of the most frequent reasons for not coming out of an audit successfully. If you find your business owing money to the IRS and would like some help to get things straight, please call my office today for a free consultation. You will be under no obligation and you will be able to find out some options to help resolve your IRS liability. We also handle probate, real estate, wills and family court matters.
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QUESTION:
I owe the IRS a lot of money and I started contacting them several months ago when I started receiving letters from them stating that they would start garnishing my wages or taking money from my bank account if I didn’t resolve the issue with them. I have called them a number of times, sent lots of information to them and still have not gotten anywhere with the IRS. Can you still help me even though I have begun the negotiation process?
ANSWER:
In a word, yes. I hear this same story all too often. Many of my clients attempted to resolve their tax issues before coming in to retain me. However, they quickly became frustrated with the long hours they spent on the telephone with the IRS and never being able to speak with the same person twice. Also, even though you may have almost totally negotiated a payment plan with the IRS, there may be other opportunities to negotiate with the IRS to reduce the amount of taxes or penalties that you pay that only an experienced tax professional would know. It is not the IRS’ job to help you out of your tax problem by paying as little as possible. There are several ways of dealing with your tax liabilities and I encourage you to call my office to set up a consultation today. There is no obligation and your first consultation is always free. Our office also handles probate, real estate, family court and estate planning matters. Call us today for your free consultation.
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I have been reading the classic Dale Carnegie book, "How to Win Friends and Influence People" recently and came across a line that really hit home to me. To paraphrase, it was the statement that you can make more friends in two months by being genuinely interested in people than you can in two years by trying to make people interested in you.
I have heard this said another way in the past: people don’t care about how much you know until they know how much you care.
I believe that by showing your prospective clients that you are genuinely interested in them and helping them solve their problems you can build up your client base with great clients quicker than by tooting your own horn all the time. I find this is pretty standard for all professionals - not just attorneys. The feeling is that if I want someone to hire me, I need to tell them all of the great things about myself like how high I graduated in my undergraduate and law school classes, how many certifications or professional merits I have received, how many similar cases I’ve won, etc. While this information is relevant and helps me to sell myself, what really sells the client is that you care enough to know what their problem is and that you know how to get in all of those personal highlights in a manner that shows them how it helps solve their problems rather than building up your ego in front of them.
How can you go about showing people how much you care? Get involved in the community in similar areas that your law practice servcs. This gives you an opportunity to speak to people in a non-threatening environment, without all of the formality of law books, suits and big desks, and just talk.
This thought goes against some advice I received in law school which was: "never have coffee with your clients." I think the visiting attorney was trying to get through to us that we want our business relationships to remain business so we don’t internalize everything and take every set-back or loss personally. I think there’s a way to show clients that your are genuinely interested in them and their problems without becoming so personally intertwined that we cannot focus on serving our clients.
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I recently met with several prospective clients and I had to tell them - or bring them to the realization - that there really isn’t very much a tax attorney can help them with, or it would not make financial sense for them to hire an attorney.
In some situations it is possible for the taxpayer to represent themselves before the Internal Revenue Service as successfully, and for free. Many times the amount owed is less than the actual attorney fee for the representation. When these prospects come in, I usually try to give them some tips in communicating with the IRS so they can take care of their taxes themselves.
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