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

Advantages and Disadvantages of Using a Tax Resolution Professional to Solve IRS Taxes

Nothing can strike fear into the heart of a small business owner or other citizen like being contacted by the Internal Revenue Service. This tax agency enjoys powers not granted to many other parts of the government. Unlike those other government agencies, the IRS can garnish your wages, freeze your bank accounts and seize your property. So, you cannot simply do nothing if the IRS contacts you or your business about Read More

4 Ways the IRS Can Collect Their Debt

When the IRS determines that you owe money, the collection process is steady and methodical. Below is an overview of four ways that the government commonly uses to collect tax arrears, some of which can have a serious impact on your business and your life. 1. Sending Notices It starts with the CP501 notice, which is an assessment letter informing you of your tax liability, including any interest or penalties Read More

Credit Agencies No Longer Report IRS Tax Liens

Last year the three credit reporting agencies (Experian, TransUnion and Equifax) announced that they will no longer report IRS tax liens on people’s credit reports. See https://www.experian.com/blogs/ask-experian/tax-liens-are-no-longer-a-part-of-credit-reports/. Prior to this, you had to wait seven years after you paid the tax liabilities the IRS lien covered to remove it from your credit report.  The wait was Read More

Meeting with the IRS? 3 Tips to Help You Prepare

When you receive a letter from the IRS stating that you’ve been selected for a tax audit, it’s normal to be worried even if you’ve always filed your returns on time and you’re reasonably sure that they are accurate. There’s just something about an IRS notification that makes you feel as if you’re guilty until proven innocent. Your first question after reading the letter will probably be “Why me?” followed by “How Read More