Is Remortgaging The Answer To Your IRS Problems?

Your IRS issues will not go away by themselves. To settle your tax debt, consider remortgaging your home. This option is one to consider when looking for a way to resolve your IRS problems.

Your IRS problems grow with accumulating interest and penalties, so don’t ignore them. You may be paid a visit by the Criminal Investigation Division special agents if you do not take action about it.

By remortgaging your home, a different loan type or a lower interest rate can be obtained. You have extra money to settle your tax debt because you are technically paying an old loan with a new loan with lower mortgage payments.

Inquire at your bank and look online to search for the perfect institution to get your remortgage from. It will depend on your equity and your credit rating.

After you have gone through the whole exercise and the remortgage is approved, you will be able to start paying off your tax liability. You will not be able to settle your tax debt in full because you won’t get a huge amount of money. A payment plan with the IRS needs to be negotiated. An Offer in Compromise or installment agreement can allow you to settle your tax debt through low monthly payments.

Hopefully, when the IRS sees that you’re attempting to pay off your tax debt, you and your family can finally move away from your IRS problems. You will be able to check your mail without fear of getting another IRS notice.

Prepare Yourself for Audits

The IRS has given you notice that you’re going to be audited. It is a huge problem. Now your personal finances are going to be scrutinized.

Read the notice first. That’s how you will know what the bureau wants. Know the facts, like what period they’re auditing, what type of audit they’re doing, and the documentation they want from you. Also, take note of your deadline to reply, which is often 30 days.

Your most important goal during an audit is to only give the information related to the specific year and documentation being audited. Don’t disclose unnecessary details as these may provide the IRS more cause to investigate you further.

The information you supplied on your tax return may be supported by these documents:

• Bank statements
• Cancelled checks
• Receipts for the deductions claimed on the tax return
• Income statement report
• Proof of payment for mortgage, property tax, donations, etc.

As soon as you get the notice, start getting organized right away. These documentation may take a long time to gather, as you may have to request for them from multiple institutions.

The auditor’s questions must be answered truthly while being audited. Do not talk too much because auditors are trained to look for evidences of nervousness and lying. Harmless sentences, such as Yes, No, I don’t recall, I’ll have to check on that, What exactly do you want to see?, and why would you like to know? are the best responses.

Bring only documents specified on the IRS notice you got. Additional documentation is irrelevant and might only cause more harm than good. If the auditor asks you about a different tax period or a document that wasn’t requested on the notice, just state that the information is not on hand at the moment.

If you agree with the outcome of the audit, pay the extra taxes and consider your IRS problems solved. You have a right to request for an appeal if you don’t.

How to Keep Your Assets

Asset seizure is a distinct inevitability if you have big problems with the Internal Revenue Service (IRS). The IRS takes what they want, and if they demand payment and you can’t provide, they won’t hesitate about taking your assets. You won’t have much left after they’re done taking your assets, especially if you owe the bureau a lot of unpaid taxes.

Determining which assets to take are undertaken by the IRS considering these three factors:

1. The tax liability amount vs. the cost of the property required to settle
2. If it isn’t difficult to take and dispose of the properties
3. The taxpayer’s attachment to the assets

You may be threatened with asset seizure by the IRS. This gives you the option to choose to sell your assets yourself to pay for your unpaid taxes. The IRS often take these assets:

• Accounts in banks
• Yachts, jets, helicopters, cars, and luxury vehicles
• The cash value of life insurance
• Money other individuals will pay to the the person in question
• Stocks and bonds
• Wage
• Assets for collection
• Real estate, such as investment and luxury houses
• Keoghs, IRAs, Pensions
• Your house

So, what is left? These are the assets that the IRS cannot take:

Clothing, excluding fur coats and other luxury couture

Fuel, furniture, personal effects, and provisions up to $6250

Books and tools of trade amounting to $3125

Students’ books

Unemployment pension

Worker’s compensation

Public assistance money

Benefits received from job training

Mail that was undelivered

Child support mandated by the court

Special Treasury fund deposits by employees of the Public Health Service and the armed forces who are assigned overseas.

Some, but not all, disability payments

Minimum exemption amount from other income, salary, and wages

Public assistance payments from welfare or SSI

The best option for you is to avoid asset seizure, but if you have already received your advice from the IRS, what is the next step? The release process is made easy with help from our firm. Your taxes will have to be paid in full, or you can negotiate an installment agreement with the IRS, prove a hardship, or prove that the amount of the asset taken exceeded that of what you owed.

Handling Appeals

Problems with the Internal Revenue Service can be a drag.

• Tax audit results

• Penalties assessed
• Interest accrued
• Tax lien placement
• Tax levy placement
• Asset seizures
• Offer in Compromise rejections

If one of the above situations involves you, an IRS missive will tell you that you have the right to appeal an IRS decision. If you disagree with the IRS ruling and you have reason to appeal, don’t sign the agreement form they sent. You can then ask for a hearing for an appeal.

Look closely. You might have received a real bill because you need to pay the bureau money. In this case, there is no possibility of an appeal. You can’t hope for an appeals hearing if you just can’t afford to pay the IRS what you owe.

Be prepared to justify why you don’t agree with the IRS ruling. Documentation can support you.

Scan the missive to find out how to prepare your request for an appeal, where to mail the request, the deadline for the request, and what details should be included with the request.

You should know that interest and penalties won’t stop accruing on your bill when you make a request for an appeal.

Hearings on appeals can be done in an informal way, by correspondence, telephone, or in person. You will be happy to hear that most disagreements with the Internal Revenue Service are settled in appeals.

The timeframe for your appeal is based on the kind of case on appeal, as well as the length of time it takes for the IRS to study your file. Typically, an appeals hearing takes place within ninety days after you have sent your request. In the event that you haven’t gotten word from the Internal Revenue Service within ninety days, touch base with the IRS office where you sent your appeal to and they should be able to tell you when your appeal was forwarded. That will determine the start of the 90-day timeframe for your hearing.

Be patient as it can take up to a year to solve your case. A more accurate timeframe can be provided by your appeals officer.

IRS Computer Notices: The Facts

If you have IRS issues, you might be in great fear of your mailbox. Will I receive a notice from the IRS today? Were errors found in my tax return by an IRS computer audit? Do I owe even more taxes to the IRS?

Information from the IRS’s own records and from other sources are used by the IRS computer system to review tax returns and send notices. You may be getting refunded (not likely) or required to pay more money if an error was found on your tax return and you will get a notice about it. The tax due will include interest and penalties.

This example is just one of over 300 kinds of IRS computer notices generated. The most common notices are:

• Claims you did not report all of your income: The IRS computer searches its files and compares information to determine if you have reported all of your income.
• Claims you made a math or clerical error: Clerical and math responses are checked when the IRS computer scans your return.
• Claims you failed to file your return: If a return was filed as required, the IRS computer can find it.

Don’t hesitate to ask the IRS for corrections if you receive one of the 300 computer-generated IRS notices and it is incorrect. Your records should contain copies of all IRS correspondences.

If the notice is correct and you do owe the IRS and don’t settle in 30 days, you will start receiving a series of computer-generated bills called the “500 series”. This will include a reminder of your tax debt (CP-501), your speedy action is needed (CP-503), and a levy will be issued if you don’t respond immediately (CP-504).

Payroll Tax Problems

Are you unable to pay your business’ payroll taxes? Has the IRS served you notices about non-receipt of your 941 payroll returns? Or maybe you’ve had to file some payroll taxes late because you didn’t have the money at the time they were due?

It’s a very common practice for businesses that are having financial problems to submit their payroll returns late and to put off settling payroll taxes. You’re taking your employees’ hard-earned money to settle your other debts when you fail to submit payroll taxes. This is not a good idea when the business is having issues. You’re just adding IRS issues to your problems.

Failing to Pay Payroll Taxes

If you fail to submit your payroll taxes when it’s due, the IRS are going to start adding penalties and interest to your tax bill. If your business is having cash flow problems, this will simply increase your problems.

Payroll Returns

Failing to submit payroll returns by the deadline will increase the penalties that the IRS can attach to them. These penalties range from 5% per month up to a maximum of twenty-five per cent. Because penalties are accumulating and interest is compounding, your tax issues are also multiplying.

Contact us now if you have gotten notice regarding your payroll tax problem. Dismissing this issue will make it worse. Business owners with payroll tax problems are subject to enforced collection by the IRS. Your business’ bank accounts, equipment, accounts receivable, and vehicles may be levied. The IRS can put you out of business.

What’s Next?

If the IRS figures out that you’re responsible for the non-payment or late filing of payroll taxes, you will be held liable for these payroll taxes and any penalties and interest that accrues. You’ll be paying a Trust Fund Recovery Penalty.

Options

Know your rights. You must know if the amount assessed is the right amount. You need to know if you qualify for an Offer in Compromise or an installment agreement. Find out if they will seize your assets. Somebody should work things out for you.

Not Filing a Tax Return Affects You

Not filing a tax return will get you in trouble. There’s a certain time that the IRS is allowed to pursue you. This statute of limitations is written in the Tax Code.

Criminal: If the IRS finds you within six years of the tax return’s deadline, you’ll be subjected to criminal charges.

Civil: Civil penalties can be imposed, though there are no deadlines. The taxes you owe will be forever assessed with interest and penalties.

IRS Policy: After six years from the tax return’s due date, the IRS doesn’t usually pursue nonefilers.

If you need to pay taxes and don’t file a tax return, it’s a criminal offense. You may be sentenced to one year in prison for each unfiled year and fined up to $25,000 per year.

If you need to pay taxes and you filed your tax return but did not pay them, there is no criminal penalty. The unpaid tax will accrue interest and penalties, however.

How the IRS goes after nonfilers include:

• The Computerized Information Returns Program (IRP). Your information documents are matched against tax returns you’ve filed through this software. A TDI or Taxpayer Delinquency Investigation will be initiated if the IRS can’t find any proof that you filed a tax return. You’ll receive notices from the IRS, then phone contacts and more letters, and eventually a revenue officer might start searching for you.
• The IRS has four different ways to notify nonfilers. If you do not respond to one method, the other methods will be used:
  • Written request from the Service Center. Three notices within a 16-week timeframe will be sent to you.
  • A taxpayer service representative will contact you. At this point, you will be given a due date to file your tax returns.
  • Phone call or visit from a revenue agent or officer. You will be given a deadline to file your returns with the officer and they’ll offer to assist you prepare the returns. (If you still don’t file your returns, the IRS can do them for you.)
  • Visit from special agent. A criminal investigation is going on if this happens.

Bank Account Levy

A levy has been put on your bank account and you’ve just known about it. It’s devastating. You’ve probably already discovered the trouble this will make in your and your family?s life. “What do I do now?” you ask.

The IRS might put a levy on your account for a lot of reasons. Some of these reasons are:

• Unpaid taxes
• You have unfiled tax returns
• Unserved IRS notices due to change of location
• Installment agreement with IRS was defaulted

The IRS uses levies as a way to punish you, the taxpayer, for not settling taxes. Your bank will be served a Notice of Levy attached to your account. All your funds may be taken by the IRS. Your bank, however, doesn’t have to give the money to the IRS for 21 days. The 21 days starts with the date on the levy. You have to act fast. You have to make arrangements with the IRS regarding your taxes before this waiting period is over. Remember, you you won’t be able to use the money in your account until the IRS cancels the levy.

Release of a Bank Account Levy

The release of a levy is not an easy task, especially when it comes to bank accounts. Any of the following will have to happen:

• File for bankruptcy, Offer in Compromise, or pay your taxes in full
• Expired time limit for collections. Count ten years from assessment date.
• You can give evidence to the IRS that the release of the levy will enable collection of the taxes.
• Negotiate an installment agreement with the IRS.
• Absence of funds will result in extreme financial hardship for you.
• Your bank account amount are more than the amount owed to the IRS.

You ought to be able to figure out a way to put yourself in one of these categories. You should call the IRS officer in charge of the levy. Make an appointment with his manager if it isn’t possible. Provide the necessary information, make arrangements to settle your taxes, or ask for an appeal.

The Freedom of Information Act and You

Government agencies provide you access to records through the Freedom of Information Act (FOIA). As a government agency, the IRS is subjected to the FOIA. What’s the goal in doing this?

If you are aiming to determine when and how your IRS issues began, your IRS records will be very helpful. It’ll have the taxes that have been assessed and penalties or interest that are accumulated. Notes of IRS agents, papers, opinions, and computations may be included. These can be particularly handy if you are in the middle of contesting an audit or tax bill.

You need to request the information in writing and include these elements:

• Pinpoint the exact information you’re requesting.
• Attach a copy of any identification, as well as provide your name and address.
• State that you are requesting under the Freedom of Information Act.
• Mention that you’ll pay for the fees.

You may want to include the maximum fee that you’re willing to pay for the information, the document format you prefer, and your phone number in case they want to contact you.

The request should be sent to the IRS Disclosure Office that has jurisdiction over your records. The roster of IRS Disclosure Offices may be obtained from the IRS�s FOIA main page through the Internet. You must keep a copy of the request for your records.

If you have a deadline to catch, you will need to request the records early. The IRS may not respond to your request for thirty days. When they do reply, it’ll be probably only to say that they need time to get the records. Showing a “compelling need” for the information may speed it up. Information regarding the “compelling need” categorization can be found on the IRS’s Guide to the Freedom of Information Act.

Also, be aware that the IRS edits out information that it deems you are not entitled to. The IRS may withhold information if it conforms to the nine exemptions and three exclusions that are contained in the FOIA. If you receive documents with information blacked out and feel that this information is rightfully yours, you can take the matter to the FOIA Appeals Office. You may not receive the information you’re searching for before you need it, though, because the Appeals Office is behind on their cases.

How To Settle Tax Debt

Many Americans have back taxes at some point in their lives. Tax bills can stem from you having the inability to pay your taxes. Interest and penalties are also added to the tax liability. What can you do if you have this IRS issue?

There are five ways you can consider as settlement of your tax debt. You can figure out the best strategy for you based on your present financial situation.

• Partial-pay installment agreement: A long-term settlement plan with reduced sum
• Installment agreement: Monthly settlement plan

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  You will have to accomplish a Form 9465 or Installment Agreement Request and Form 433-A or Collection Information Statement to qualify for either of these two installment agreeements. You also need to determine what you can commit as monthly settlement and mail a letter of request and three months’ worth of documentation showing your expenses and income in 90 days.

• Declaring bankruptcy: Tax liabilities are dismissed under Chapter seven or Chapter 11, twelve, or 13 bankruptcy. Chapter seven bankruptcy allows you to liquidate your debts and Chapter eleven, twelve, or 13 bankruptcy lets you negotiate a payment plan.
• Offer in Compromise: Settles your liability for less than what you need to pay and you make a lump sum payment or a short-term payment plan with reduced dollar sum. Form 656 (Offer in Compromise) is accomplished and you need to meet any of the following: Doubts as to collectibility, Doubts as to liability, or Hardship.
• Be on presently not collectible status, meaning you’re not able to pay, so the IRS cannot collect for a specific period of time, normally one year.

You can figure out how to resolve your tax debt with the help of a tax professional. IRS problems can stress you out. You can start living your life again when you get this circumstance under wraps.