The Consequences of Owing Taxes to the IRS: Worst-Case Scenario

As Benjamin Franklin rightly said, “in this world, nothing can be said to be certain, except death and taxes.” Although the IRS wasn’t established until 1862, Franklin’s 1789 quote is timeless and still applies today: if you owe taxes, the government will use the full extent of the law to get the money they are owed. Penalties for non-payment of taxes are severe. Wage garnishments, liens, bank levies, seizure Read More

A Brief Overview of IRS Trust Fund Penalties

Even if you’ve dealt with collection agencies in the past, the experience won’t prepare you for the IRS. If you’re delinquent in paying your federal business taxes, it can levy your company assets, bank accounts, accounts receivable, and even your personal property. Many business owners shield themselves from personal liability for company debts by forming a corporation or LLC. While this strategy can prevent Read More

Private Debt Collection Agencies

  In April of last year, the Internal Revenue Service revived its private debt collection program.  Under this program, authorized by 26 U.S.C. § 6306, the IRS can give certain taxpayer accounts to private contractors for collection and can pay them commissions of up to 25% of the amount collected.  Taxpayers can be sent to private contractors to collect the tax debt when their accounts are in collections Read More

Seriously Delinquent Tax Debt: What Happens and What Can You Do?

The IRS doesn’t take halfway measures when it comes to collecting overdue taxes. It can garnish your wages, file a lien on your assets, and even liquidate them to satisfy your tax debt. Over three years ago, the IRS expanded its collection powers by adding the ability to limit, revoke, or deny the issuance of your passport if you have seriously delinquent tax debt. What Is Seriously Delinquent Tax Debt? Under Read More

Limiting Tax Liabilities with the IRS Collection Statute of Limitations

Our Firm works with each of our clients to get the best possible resolution of their tax problem.  One of the tax resolution tools we evaluate in each case is the Collection Statute of Limitations. Collection Statute of Limitations The Internal Revenue Service does not have an unlimited amount of time to collect a tax debt.  The Internal Revenue Code provides that in general the IRS only has ten years from the time Read More

Understanding the Difference Between Tax Evasion and Avoidance

The terms “tax evasion” and “tax avoidance” are often used interchangeably. Although a surface similarity exists (failure to remit the correct amount of tax due), one is a criminal offense and the other can only expose you to civil penalties at most. When deciding whether a taxpayer is guilty of tax evasion or avoidance, the IRS seeks to answer the question: Are they lying or hiding? What Is Tax Evasion? Tax Read More

3 Reasons You May Be Eligible for the Currently-Not-Collectible Program

If you owe a tax debt that you can’t afford to pay, you can apply for Status 53, which is the IRS’ “Currently Not Collectible” designation. In addition to giving you breathing room on back taxes, becoming a Status 53 taxpayer stops all collection activities in progress, such as garnishments or levies. Currently, Not Collectible status is intended to relieve taxpayers who are struggling financially and have no money Read More

Understanding the Difference Between Levies and Wage Garnishments

The IRS uses bank levies and wage garnishments to collect unpaid taxes, which is why the two processes are often confused. They are both collection actions, but the similarity ends there. IRS Bank Levies When the IRS issues a bank levy, it freezes your bank account and withdraws the amount you owe. If there isn’t enough money in the account, the IRS will keep placing levies on it once more funds are available, Read More

Cryptocurrency and Taxes

You have probably heard of Bitcoin and cryptocurrency, but you may not know exactly what it is, or how it is treated for tax purposes. Let me explain what cryptocurrency is and why you need to know about it. Crypto comes from cryptography, which is computer technology used for security, hiding information, and verifying identities. Cryptocurrency is a form of electronic money. It is made possible by a new kind Read More

Collections Due Process Explained

The Fourth Amendment guarantees you due process in situations where your life, liberty, or property are at risk. When you owe money to the IRS, they have the power to garnish your wages, file liens and levies on your property, and sue you, but the IRS Restructuring and Reform Act of 1998 gives you statutory rights in this situation, including the right to a hearing. A Collections Due Process Hearing gives you the Read More