South Carolina Tax Attorney

    When you call the IRS to set up an installment agreement, you may have to go through a series of steps before the IRS will grant your installment agreement.  The first factor is how much money do you owe the IRS.  While the amount you owe does not matter when negotiating an offer in compromise, it is critical for several reasons when negotiating an installment agreement.

    If you owe the IRS less than $10,000 and your installment agreement will allow you to pay off your debt within three years, the IRS must grant your request for an installment agreement.  If you owe less than $25,000 in taxes, penalties and interest, the IRS will not require you to provide a financial statement (Form 433-F) prior to setting up an installment agreement.  However, if you cannot afford to pay the monthly installment agreement as the IRS would like then you would be forced to provide a financial statement showing that you cannot afford to pay what they are asking.  Finally, if you owe more than $25,000 the IRS is required to get a financial statement from you.  It would do you well to hire an attorney to assist you with filling out a financial statement when you owe over $10,000 if you need assistance negotiating a lower payment because typically, the IRS will not allow more than the "national standard" on living expenses such as housing, utilities, food, clothing and transportation.  A professional that deals with the IRS on a daily basis will know how to best help you get the lower payment that you desire.  If you are going to be required to give them a Financial Statement, I would prepare one prior to getting on the telephone with them and strictly go by your form.  The IRS uses Form 433-F in these situations.  You  also want to write down what the Revenue Officer is allowing you if he states that he is not allowing the entire amount.

    The amount you owe will determine exactly how much time it will take  to get the ball rolling.  If you are only calling to set up a payment plan and you owe a few thousand dollars, an hour on the telephone should be sufficient to set up your installment agreement.  However, if you owe more than $25,000 you will be required to go through the financial statement on the telephone then mail or fax in the substantiating documents such as pay stubs, bank statements and copies of your utility bills, etc. 

    At this point, the IRS will give you a short deadline in order to provide those documents (if you have them prepared already, the revenue officer may allow you to fax them directly to her) then the IRS will review the documents prior to approving your installment agreement.  The process has taken from several hours up to several months in order to get the review finished. 

    You can see that there really is no set time limit, however, it may be easy to predict how long it will take based on the surrounding facts of your situation. 

    When you are a business owner and your business has employees, you are required to withhold income taxes from your employee’s paychecks and make regular deposits of those taxes with the IRS.  If you miss those tax deposits or fail to pay at all, your business is looking at some stiff penalties.  If your business is unable to collect, or for no other reason except to give the IRS more people to collect those taxes from, the IRS may assess the "trust fund" portion of those withholdings against you personally.  The IRS may assess the trust fund recovery penalty against anyone who has authority over the company finances and would determine who gets paid and who does not.  Meaning, if you or another employee gets to make the decision that the company will pay the power bill this month rather than making the tax deposit, the IRS can assess the trust fund recover penalty against that person.

    How do they enforce that penalty?  The same as they would when trying to enforce any other type of tax liability.  First they would give you an opportunity to full pay or set up a payment plan.  If you refuse to do that (or cannot) they will begin enforcement action that includes wage levies, garnishment of bank accounts, down to the worst types of enforcement action like seizing your home and other personal property. 

    You can negotiate with the IRS to reduce this amount with an offer in compromise just like if you had other personal tax liability.  The main distinction between personal tax liability and the trust fund recovery penalty is that the trust fund recovery penalty cannot be discharged in bankruptcy so it will be hovering over the taxpayer until it is paid in full by the taxpayer, the company or until the collection statute of limitations expires. 

    If you are facing having the trust fund recovery penalty assessed against you or it already has been and you don’t know how to approach the IRS next or what your rights are, please give me a call today to set up your free consultation. 

    Imagine that title?  Wouldn’t you like to be sought out by the IRS for a different reason - they owe YOU money.  Well that is just the case for thousands of people.  In my are alone, there are 226 people that the IRS is trying to locate to refund money they owe.  The average amount for these people is $1,600.00. 

    In South Carolina alone there are over three thousand taxpayers the IRS is looking for to refund a total of over $1.3 million. 

    Nationally, the average for the 115,000 some odd taxpayers that are still owed their tax refund is $953 - That’s $110 million!  Where did this money come from, you ask?  When the IRS mailed out tax refunds, $110 million worth were returned as undeliverable.  If you didn’t get your tax refund check this year, you should head on over to the IRS website and use their tool for locating your refund and checking the status.  Here’s that website: Where’s My Refund.

    Are you on the list.  Check out this news story and the list they link to for Upstate South Carolina.

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    Imagine that title?  Wouldn’t you like to be sought out by the IRS for a different reason - they owe YOU money.  Well that is just the case for thousands of people.  In my are alone, there are 226 people that the IRS is trying to locate to refund money they owe.  The average amount for these people is $1,600.00. 

    In South Carolina alone there are over three thousand taxpayers the IRS is looking for to refund a total of over $1.3 million. 

    Are you on the list.  Check out this news story and the list they link to for Upstate South Carolina.

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Question:

    I went through a divorce several years ago and was ordered to pay alimony to my wife.  I have been claiming those payments as a deduction on my income tax because I thought my lawyer said I could.  Now, I received a letter from the IRS that they are not allowing my claim for alimony and I owe a lot of money in back taxes.  What can I do?

Answer:

    Well, you have several options.  First of all, the IRS can allow your deductions for alimony as long as they are truly alimony payments which meet six requirements:

1. You and your ex-spouse must not file a joint tax return for the years you are claiming the deduction for alimony;
2. You must pay in cash or a cash equivalent such as check or money order;
3. The divorce decree or separation agreement requiring payment to your ex-spouse cannot specifically state that the payments are not to be considered alimony;
4. You and your ex-spouse may not live in the same residence;
5. You are not required to continue making payments after your ex-spouse dies; and finally
6. You payment cannot be treated as child support because child support is never deductible. 

    The first thing you can do is appeal the examination that caused this new tax liability.  There are generally a couple levels of appeal - up to the U. S. Tax Court.  You should provide proof of your alimony payments such as cancelled checks, receipts, etc, you should also provide copies of your divorce decree or any Court Orders requiring you to pay "alimony," and any other information that you believe would be relevant to the IRS for consideration of your claim.

    If you are still unsuccessful in getting the IRS to accept your claim for the deductability of your alimony payments you will have the same options of settling that liability as any other taxpayer who owes the IRS money - namely, through an offer in compromise or an installment agreement.  The problem with an offer in compromise in this type of situation is that the liabilty is generally not very large and that makes it extremely difficult to negotiate the IRS much lower; however, on the positive side, it makes negotiating a more reasonable installment agreement/payment plan much easier and much more likely that you will be able to better afford those monthy payments.

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Question:

    The IRS recently levied my business bank accounts, again, but this time they did not give me any notice or warning.  Is this legal? 

Answer:

    Unfortunately, yes, it is legal for the IRS to levy your bank account in this situation without forewarning.  If these were your first delinquent payroll taxes in two years and you had never been levied before, then the IRS would be required to give you notice and you would have the right to a hearing to determine if the IRS had done everything they were required to do prior to issuing a levy as well as looking at other alternatives for the payment of the tax such as an offer in compromise or an installment agreement. 

    I would like to remind my readers that we are putting together a new product to assist indiviudals in filing their own offer in compromise with the IRS.  We understand that some people just want to keep these type of issues private and handle it themselves and that is the reason we are creating this product.  While we have all of the "information" to go into the product ready to go, we want to make sure it is exactly what our readers want so, please take some time go take this short 8 question survey (it should only take you about 2 minutes) to let us know what you would like to see (such as, e-book, hard copy or video).  Thanks!

Follow this link for to complete the survey: Offer in Compromise Survey