Frequently Asked Questions
1. Do I qualify for an Offer in Compromise?
If your five-year net worth is less than the total amount of your current liability, you would be a strong Offer in Compromise candidate. If you do not believe that you owe the tax, you may also be an Offer candidate. Or, if you have experienced or are experiencing a hardship, filing an Offer to reduce the debt may be in your best interest. Additionally, a taxpayer must have filed all required tax returns and made all required deposits before submitting their Offer. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
To see if you qualify for an Offer in Compromise, click here.
2. Is the IRS or state going to levy my bank accounts?
If you delay addressing any written or verbal communication by the taxing authorities, you significantly increase the chances of bank levies being issued. This is a very intrusive but effective form of tax collection, and the IRS and state revenue departments must follow procedure regarding notices and timelines before they can levy. There are exceptions to every rule; however, nearly all of the notices you will receive are time sensitive and require your immediate attention. The IRS issued 1,680,844 levies in 2003, which is up from 1,283,742 in 2002!!!!! These figures are on the rise. Avalon’s experienced staff has successfully negotiated levy releases for hundreds of taxpayers across the country. With proper action taken now, you can avoid being one of the millions of levies issued this year. We can review any notice and offer options to avoid enforced collection. You will greatly reduce the risk of levies by calling Aavalon today. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
3. Can I get my penalties and interest waived from my tax account?
Penalties can be removed provided you have a valid reason for falling behind. Interest can be adjusted in the event of an error in the application of your debt or if you can demonstrate that an IRS or state representative provided you with erroneous advice. Adjustments to your tax account could save you thousands of dollars. Our experienced staff has drafted hundreds of abatement arguments, and we can draft your penalty abatement request for you. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
4. My Revenue Officer wants to meet face-to-face, what do I do?
Revenue Officers are contacting you to obtain full payment of your tax debt. When a Revenue Officer wants to meet face-to-face they are going to demand full payment. If full payment cannot be provided, they will try and force you to enter into a payment arrangement on their terms. This can be very detrimental to your already minimal cash flow. You do not have to be intimidated into signing a repayment plan. You have rights as a taxpayer. Unless you are meeting with your Revenue Officer to pay the debt in full, you will find it beneficial to have our Enrolled Agents on your side to negotiate an alternative to full payment. Our Enrolled Agents can contact your Revenue Officer to cancel the meeting. From that point forward, the Revenue Officer will deal directly with our firm so that you do not have to. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
5. How do I find out how much I owe?
The IRS will provide a written detail of your account item by item via a transcript. Transcripts will detail, among other things, when a return was filed, the amount of the tax due, any subsequent payments that have been made, what penalties and interest have been assessed, as well as dates for the aforementioned. Our Enrolled Agents can easily interpret any transcript question or concern. The Enrolled Agents at Aavalon have years of experience in researching transcripts. This is an important part of the resolution process, as we take priority in first verifying the accuracy of all assessments on your tax account. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
6. Will the IRS seize my house?
In our team’s combined 15 plus years experience representing taxpayers in front of the IRS and state revenue departments we have yet to have one of our client’s homes seized. Seizure of a primary residence or any type of tangible asset is a last resort in the collection process. In 2003, the IRS conducted 399 seizures. In most cases the answer is no they will not seize your home, however there are exceptions to every rule. Time may be of the essence. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
7. Will the IRS or state revenue departments file a lien against my assets?
Yes. In some cases you can full pay your debt prior to a lien being filed. IRS and state revenue departments will file liens to secure themselves in the collection process. In 2003, the IRS filed 548,683 liens. Unfortunately, it can be difficult to predict when and if a lien will be filed. Appeal rights are offered with lien filings. The appeal windows are very small. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
8. What do I do if I need to file returns from previous years and do not have my W-2’s or 1099’s?
Typically all prior wage information will have to be ordered from the IRS to complete all unfiled IRS or state returns. Aavalon can assist in ordering the information and the filing of your returns. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
9. What is the “Trust Fund Recovery Penalty?”
The Trust Fund is a penalty the IRS will assess against individuals who they deem as willful and responsible for a corporation’s tax liability stemming from 941 Withholding Taxes. The IRS will assess under an individual’s Social Security Number a Civil Penalty equal to the amount of funds that were to be withheld from employee’s paycheck and remitted to the IRS via Federal Tax Deposits. The Trust Fund Recovery Penalty is a joint and severable liability meaning that if there is more than one individual responsible for the corporate debt, the IRS can assess multiple individuals the total amount of the Trust Fund. However, if the Trust Fund is paid in total either by the corporation, one individual, or more than one individual the debt is then retired.
Typically, the IRS will start to look at assessing this penalty if the corporate liability is greater than $10,000. This may also be a red flag that the IRS is increasing its movement toward aggressively collecting the debt.
The IRS or state revenue departments will file personal liens against individual assets to secure any personal assessments. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
10. Can I file an Offer in Compromise against a Trust Fund liability?
Yes, the IRS will review an Offer in Compromise submitted against a Trust Fund Recovery Penalty. The same formulas for calculating the Offer amount apply. However, the IRS will scrutinize this type of Offer because the Trust Fund Recovery Penalty was tax that was to be collected and was not remitted to the federal government. Trust Fund taxes are very difficult to settle. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
11. Can the IRS levy my Social Security?
It is not very common, but the IRS can and does levy individual’s Social Security payments. This levy is called a wage garnishment. Time could be of the essence. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
12. How do I seek the aid of the Taxpayer Advocate’s Office?
In order to receive aid from the Taxpayer’s Advocate’s Office you will need to file an IRS Form 911 application. In most cases, contacting the Advocate’s Office is for an undue hardship in relation to the resolution of your tax debt. We can help you locate you local office, complete and file the Form 911, and carry out the mediation with the assigned Advocate. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
13. What are IRS National Standards? Where does the IRS apply them? How will this affect my family’s expenses?
In order to determine what the IRS deems as allowable expenses relative to a taxpayer’s income, location, and size of family they have devised National Standards. The IRS will allow certain expenses that they deem necessary for practical living or the production of income. Examples are food, clothing, miscellaneous, rent, mortgage, utilities, car payments, car insurance, gasoline, maintenance, repairs or public transportation. The National Standard for a particular expense is relative to the county in which the taxpayer resides, the number of dependents that are claimed and the annual household income.
The IRS will disallow some expenses citing that the expense is beyond reasonable necessities. The IRS will want this money to be allocated to them on a monthly basis. You may be granted one year to begin repayment of your debt without being subject to IRS National Standards, however, each situation is unique. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
14. Why do I receive so much mail from the IRS and state revenue departments and what does it mean?
When you owe a debt to the IRS or state revenue department you will receive more mail than you can keep up with. More importantly, it is difficult to determine which mail is urgent, which mail is 100% accurate, and what needs to be done to understand the status of your account. Whatever you do, do not leave mail unopened! We can interpret the mail for you. Many of these notices are time sensitive and require immediate attention. By delaying the opening of your mail or failing to address the requests/deadlines in the notices you may be subjecting yourself to aggressive collection tactics. Please call now for a free consultation with one of our owners toll free at 866.209.5437.
What are the stats for IRS collection?
For more on IRS collection statistics, please visit http://www.irs.gov/pub/irs-soi/03db16co.xls.
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