Taxation & Estate Planning

IRS restarts collection efforts: CP501, CP503 and CP504 letters now being sent

Posted on November 02, 2020
IRS collection efforts are resuming from where they left off when COVID-19 first hit. The IRS has started sending their CP500 collection letters demanding payment. The IRS is making it clear that they are not going to remain quiet, as they were at the beginning of the pandemic...

Should you listen to advice to file an offer in compromise?

Posted on October 21, 2020
Time and time again, I hear from clients who received advice to file an offer in compromise from an IRS collection agent, their accountant, or a friend. They took the advice and had their offer rejected by the IRS. When should you be comfortable listening to advice from someone urging you to file an offer […] The post Should you listen to advice to file an offer in compromise? appeared first on Cincinnati IRS Tax Attorney Howard Levy.

Rethinking IRS penalty relief: Don?t waste your time

Posted on September 10, 2020
The IRS charged you penalties for not paying and filing your taxes, and you want relief. After all, when you see how much the penalties have added to your bill, the logical next step would be to focus on having them removed. It makes sense – the penalties can be aggravating, and you would like […] The post Rethinking IRS penalty relief: Don?t waste your time appeared first on Cincinnati IRS Tax Attorney Howard Levy.

Collection statute expiration date nearing: How aggressive will the IRS be?

Posted on August 25, 2020
You have patiently waited for your IRS collection statute expiration date to arrive. But you anxiously wonder:  As the collection comes closer to an end, will the IRS rear its ugly head and become aggressive? After all, the IRS isn’t just going to sit quietly and let your tax debt simply disappear without a fight...

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IRS wants to interview you: Should you record it?

Posted on August 18, 2020
You owe the IRS back taxes, and a local Revenue Officer is coming after you to collect. Or maybe you received a letter from an IRS auditor stating that they are examining your tax return. Either way, the IRS is looking into your affairs. And as part of their investigation, you are asked you to […] The post IRS wants to interview you: Should you record it? appeared first on Cincinnati IRS Tax Attorney Howard Levy.

Received an IRS CP71C letter? Here?s why you can ignore it

Posted on July 28, 2020
All had been quiet on the IRS front. Then you received a stack of IRS mail, and gathered the courage to open it. And right there, in bold letters in the middle of the front page, you see it: The IRS calculation of the amount you owe, with a request to pay...

You owe the IRS but your spouse does not: Protecting their finances

Posted on July 12, 2020
You owe taxes to the IRS, but your spouse does not. Naturally, you want to protect their finances from being drawn into your tax problem. The last thing you want is the IRS prying into your significant other?s financial affairs. They married you, not the IRS...

When is the best time to file an offer in compromise?

Posted on June 26, 2020
In the back of your mind, a question lingers:  When is the best time to file an offer in compromise? You are right to wonder. The timing of your filing can make a big difference to the outcome. Before jumping in, here is what you should know about the best and worst time to file […] The post When is the best time to file an offer in compromise? appeared first on Cincinnati IRS Tax Attorney Howard Levy.

Be careful: Why you may not want the IRS to release a social security levy

Posted on June 15, 2020
You are now retired, on a fixed income, relying on your social security benefits to pay the bills. Back in the day, you made some financial mistakes and got behind on your taxes. Maybe it was a business you owned that got into employee payroll tax problems...

I just got my taxes back and owe the IRS. What happens next?

Posted on June 04, 2020
You just got your tax return back from your accountant. Or maybe you completed the return on your own with tax software. Either way, the result was terrifying. You owe money to the IRS that you cannot pay. And your mind begins to run with worst case scenarios...

Unfiled tax returns? Don´t wait, you could lose your refunds.

Posted on May 11, 2020
Not filing tax returns can be habit forming. With the best intentions, you miss filing one year’s return.  That grows into another year, and then another. Fears mount, procrastination feeds itself, and one missed filing turns into more years than you can keep track of...

Why is my Revenue Officer not returning calls or responding?

Posted on April 23, 2020
An IRS Revenue Officer came knocking on your door, leaving a card, and a request that you call. Or maybe the Revenue Officer sent you an introductory letter threatening your wages and bank accounts if you did not respond. Either way, it is clear the Revenue Officer means business...

Is the IRS going to seize and take my car?

Posted on February 01, 2011
Here is a practical question from a reader about a concern of everyday living – IRS seizure of your car to pay your tax debt. If I own a free and clear vehicle that is ten years old and has 115k miles on it, and it is worth 4,000.  Will it be seized if the IRS [...

If you owe money to the IRS, are you dishonest?

Posted on January 23, 2011
The time I spend helping my clients results in relationships that allows me to get to know them better.  I enjoy learning about my clients – many are small business owners, including everything from restaurateurs to electricians.  I represent doctors and lawyers and chief financial officers...

Understanding Federal tax liens: How they work, when they expire and why they can be refiled

Posted on January 17, 2011
The Internal Revenue Code does not make it easy to understand how Federal tax liens work.  Hopefully, that is what I am here for. The starting point to understanding your tax lien is to know that it lasts for the amount of time the IRS has to collect from you ? 10 years...

Is there a time limit to an IRS offer in compromise investigation?

Posted on January 09, 2011
“How long does the IRS usually take to investigate an offer in compromise?” is a great question, and one I am often asked by clients. The answer is six to twelve months, on average, although it can be longer, depending on the complexity of the case...

5 benefits to repaying the IRS with a streamlined installment agreement

Posted on December 19, 2010
Some things can be simple to negotiate with the IRS.  If you are looking for a great way to repay an income tax liability to the IRS, consider a streamlined installment agreement. Streamlined installment agreements are available to anyone who owes under $25,000 and can afford to repay their balance in five years...

Can the IRS take my retirement account after a Chapter 7 bankruptcy discharge?

Posted on October 31, 2010
Here is an issue to be aware of before filing a Chapter 7 bankruptcy on the IRS: I just completed a Chapter 7 bankruptcy.  It was determined to be a no-asset case.  A few months later,  I got a letter from an IRS Revenue Officer stating that even though the taxes were discharged, they are enforcing [...

Why does an IRS auditor want to see your bank statements?

Posted on October 24, 2010
Have you reported all of your income to the IRS? If you are being audited by the IRS, be prepared.  Almost every IRS auditor is going to want to investigate whether you have reported all of your income on your tax return. To do this, an IRS audit will conduct what is known as a bank deposit [...

Offer in compromise pointer: Claim the $200 ownership cost for an older car

Posted on September 26, 2010
Before jumping in with an offer in compromise, it is important to understand how the standardized IRS expense allowances apply to you, and how they can benefit you. Here is a valuable offer in compromise expense allowance to be aware of and to claim: The IRS will allow you to claim a $200 vehicle ownership cost if [...

Will bankruptcy help in getting the IRS to release a levy or seizure?

Posted on September 11, 2010
If you are having trouble convincing the IRS to release a levy or seizure of your property, bankruptcy may be the solution. The filing of a bankruptcy creates what is known as an automatic stay against your creditors, including the IRS.   As its name implies, the automatic stay is indeed automatic – the filing of [...

Offer in compromise rejected and want to try another one?

Posted on September 06, 2010
The offer in compromise program is the best known way to solve an IRS problem.  The compromise program is so popular that I often see clients who have submitted multiple offers, each one having been rejected by the IRS. In fact, a 2006 report by the Government Accountability Office found that 40% of submitted compromises were [...

IRS levy on my bank account: When can I use it again?

Posted on July 31, 2010
My response to a reader’s question about what happens to your bank account after the IRS hits it with a levy. The IRS has levied my bank account and there was not enough funds to cover the total levy. Will the IRS levy all future deposits until it is satisfied or can I continue to deposit [...

Losing your tax refunds to the IRS every year but need the money? Consider these changes.

Posted on July 25, 2010
If you owe the IRS and have a refund on your tax return, the IRS will keep the refund and apply it to your unpaid taxes.  The problem is not repaying the debt – you would if you could – but that you simply cannot afford to lose the refund...

Why? How? When? Making designated payments to the IRS

Posted on July 17, 2010
When you make a payment to the IRS, it will be automatically applied to your account in a manner that is in the IRS’s best interest. But what is best for the IRS in handling your payment can be different from what is best for you. In some situations, it is in your best interest to make [...

IRS collection threats: Myth vs. Reality

Posted on July 12, 2010
My clients with IRS collection problem come to me with different ideas about what will happen to them because they did not pay their taxes.  Is the IRS going to show up one day and seize my house?  Levy on my income so I cannot provide for my family?  Shut down my business?  When do [...

IRS problems? 3 things to know before you jump in.

Posted on May 31, 2010
The best way to get relief from an IRS collection problem is to consider the complete picture before jumping in.  A quick way out may be desired, but it is important to look carefully before you leap. Here are three things that I recommend that you carefully consider before taking on an IRS problem: (1)     [...

Trust fund recovery penalty: The uncollectible defense

Posted on May 23, 2010
The trust fund recovery penalty can cause financial havoc for anyone involved in a business that did not pay over its employee withholdings to the IRS.  Internal Revenue Code Section 6672 allows the IRS to investigate those in the business who were part of the decision not to pay the IRS and hold them personally [...

Should Veterans? disability benefits be included in an IRS installment agreement or compromise?

Posted on May 08, 2010
I received a great question from a reader about whether Veteran’s disability benefits should be included in the value of an IRS installment agreement or offer in compromise. Although the question is directed to Veterans’ disability benefits, my answer also applies to those with unemployment and workers’ compensation benefits...

3 ways that an IRS levy will surprise you

Posted on April 25, 2010
If you owe the IRS back taxes, the IRS is required to give you a 30 day notice before they can start to levy and seize your property.  This warning of levy action is required by law (Section 6330 of the Internal Revenue Code). The final IRS warning letter will have the words “Final Notice of [...

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