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The IRS Has A Billion Dollars to Hand Out

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Steven A. Leahy

The IRS Has A Billion Dollars to Hand Out

You may have heard the news that the IRS is searching for over a million tax payers to hand out more than a billion dollars. Here is what is happening. The IRS has ten years to collect delinquent taxes from taxpayer. This is referred to as the Collection Statute Expiration Date (CSED). However, if the IRS owes taxpayers refunds for tax years with unfiled tax returns, the taxpayer only has three years from the due date to collect this refund. And, if the taxpayer is also entitled to an Earned Income Tax Credit, those funds too, must be claimed within three years of the tax return due date.

If taxpayers have unfiled tax returns and it appears to the IRS there will be a tax liability, the IRS takes it upon themselves to file a Substitute for Return (SFR). The SFR is not a service, it is a penalty! They prepare your taxes in order to assess a tax – the IRS can’t collect a tax that has yet to be assessed. Generally, the SFR overstates the true tax obligation of the taxpayer. However, the IRS begins collection efforts to collect the assessed tax. It may take the IRS some years to assess the tax for an unfiled return – and the CSED does not begin until the tax is assessed. So, the IRS has additional time, from the date of assessment – not from the date the tax return is due, to collect the assessed tax.

If it appears the taxpayer has a refund due, the IRS does not complete the SFR. Therefore, a tax is never assessed, so the IRS does not calculate what your refund would be. They leave it to the taxpayer to calculate that number.

This year, 2017, tax-day is April 18th. This is the second-year tax-day has landed on April 18th rather than April 15th. The reason that is revolves around a little-known Washington DC Holiday, Emancipation Day. Here is the rule:

Generally, if a due date for performing any act for tax purposes falls on a Saturday, Sunday, or legal holiday, the act is considered to be performed timely if it is performed no later than the next day that isn’t a Saturday, Sunday, or legal holiday. The term legal holiday means any legal holiday in the District of Columbia. The calendars provided in this publication make the adjustment for Saturdays, Sundays, and legal holidays. But you must make any adjustments for statewide legal holidays, as discussed later.

Emancipation Day is a Washington DC holiday every April 16th. The holiday celebrates the DC Compensated Emancipation Act of 1862 that ended slavery in Washington DC. When April 16 falls on a Saturday, the holiday shifts to Friday. That’s why 2016 tax-day was moved to the next Monday, April 18th. This year, 2017, the holiday falls on a Sunday, so the holiday shifts to the next Monday, April 17th. And, because April 15th is a Saturday, the next day that is not a Saturday, Sunday or holiday is Tuesday April 18th.

Next year, 2018, April 15th will be on Sunday and Emancipation Day will fall on Monday Apirl 16th. Next year, tax-day will fall to Tuesday April 17th.
I have several clients with unfiled tax returns, many dating back before 2013. Several of these clients are W-2 employees, and likely have a refund due. So, we are concentrating on getting their 2013 tax returns completed and filed BEFORE Tuesday April 18, 2017 to make sure they receive credit for the refund they have coming.

If you owe the IRS for taxes pre-dating 2013, and you fail to claim your return timely, the IRS WILL NOT use the refund to offset those taxes. In this situation, Taxpayers are hit with a double whammy.

If you have unfiled tax returns dating back to 2013 – call my office today, right now! We can still complete those returns and get them filed so you can claim your refund. You should give me a call – Opem Tax Resolutions & The Law Office of Steven A. Leahy, PC (312) 664-6649. Call NOW to set up your FREE Consultation.

Are You In A Vicious IRS Circle?

by

Steven A. Leahy

Are You In A Vicious IRS Circle?

By Steven A Leahy

Here is the problem I see all the time. Someone has an IRS problem. They work to solve the IRS problem themselves. While they work on fixing their problem, instead of going away, the problem grows. It grows because they fail to address their current IRS obligations.

I helped a family who owed the IRS more than $60,000.00. The father ran his own business. He was very good at his profession – but the paperwork got to be a problem. Several years ago, the April 15th deadline to file his tax return was approaching and he needed more time to complete his tax returns. So, he filed IRS Form 4868 – Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. As the name of the form indicates, the extension is automatic. The filing date is then extended to about October 15 of the same year (depending on the Washington DC holiday schedule).

Problem solved, right? Wrong. His first mistake was he failed to estimate his tax liability and send a check with Form 4868. His next mistake was he didn’t file his tax return by the October due date. Once he filed the extension, he forgot about his tax returns. The beginning of the next year, he realized his mistake, he sent a portion of the tax he thought he would owe and promised himself to complete last year’s tax return and that year’s tax return by the April 15th deadline.

Now, completing the previous tax return became a big task. Many of the records were now hard to locate. So, as the April 15th deadline approached – you guessed it – he filed IRS Form 4868 for an automatic extension. This went on for several years. He would send some money to the IRS every so often to pay his back taxes he knew he would owe had he filed his tax return, but those payments left him no extra money to pay his current IRS obligation.

This family was in the Vicious IRS Circle, or a cascading tax problem. Instead of going away, the problem was growing because of the penalties and interest were growing, and becoming a real danger to their financial future. The problem was growing because they didn’t know how the IRS worked, so they couldn’t come up with a strategy to solve it. That’s when they heard me on the radio and decided to visit my office for a free consultation.

I explained to them that the first step to solving any IRS problem is getting into compliance. In this case, compliance meant filing past tax returns and paying current quarterly estimated taxes as they came due. Those with IRS problems need to focus on the future, rather than worrying about the past. If a taxpayer allows their current IRS obligations to be put aside in favor of paying the older taxes, the vicious circle begins and it becomes nearly impossible for taxpayers to solve the problem by themselves.

If you feel trapped by your IRS problem and want to stop the Vicious IRS Circle, you should contact me right away. My name is Attorney Steven A. Leahy and I help people solve their IRS problems Call me at 312-664-6649. Call now!

Peter Bella – TheCookingCop.com

by

Steven A. Leahy

Peter Bella – TheCookingCop.com

By Steven A Leahy

Regular listeners to The IRS Radio Hour know my family members were union iron workers for three generations. I was a member of the Riggers, Machinery Movers & Erectors Local 136 for many years before I started practicing law. As a Rigger, I met and became friends with many Chicago Police Officers (still am). I always enjoyed their refreshing honesty about life in Chicago – It isn’t always what we think it is.

This week on the IRS Radio Hour we welcome Peter Bella to the show. I have known Mr. Bella for some time, he hired me to help him solve his IRS problem – it turns out he knew my brother Jim before he hired me. They were friends through mutual work with conservative causes. Peter Bella is a retired Chicago Police officer, photographer, blogger, chef and Chicago life observer.

PeterBella

I follow Mr. Bella’s blog posts on chicagonow.com. “Chicagonow.com is an online community created for Chicagoans by Chicagoans. Every day, ChicagoNow bloggers post more than 100 entries to the site about local topics. And every day, thousands of ChicagoNow users comment on those entries. The result is a lively, authentic conversation about all things Chicago.”

His recent articles include “Is it time to start Tentbnb in Chicago”; What cops know can solve some of America’s problems”; “Don’t bite the hand that fed you”; “Ignorant and uninformed rhetoric over police killings is disgraceful”; Just to name a few. Each article is a blunt, “as I see it” response to the biggest issues facing Chicago.

Mr. Bella also blogs about another subject I love: Food – as the Cooking Cop. Why Cooking Cop? He writes, “Cooking Cop sounded better than the Cooking Dude, Cooking Goof, Cooking Mook, or Cooking Mamaluke. I cook. I eat. I drink. I write about it. I shoot pictures too. That is my game.”

On TheCookingCop.com, Mr. Bella shares his “passion for eating, drinking, and cooking.” He shares “recipes, techniques and methods, handy kitchen tips and advice.” He also writes about his favorite Chicago restaurants, usually out of the way joints with little fanfare, but great food. I have to say, the pictures of the food he prepares are mouth-watering.

So, tune in to the IRS Radio Hour to meet Mr. Peter Bella, the Cooking Cop, on Sunday August 7, 2016 at 5:00 on AM 560 The Answer.

And remember, if you have an IRS problem – like the Cooking Cop did – Call Opem Tax Resolutions and the Law Office of Steven A. Leahy, PC at 312-664-6649.

IRS Problems: Know Where You Are Before You Can Get Where You Want To Be

by

Steven A. Leahy

Find Out Where You Are So You Can Get Where You Want To Be

By Steven A Leahy

Too often clients come to see me with IRS problems and tell me how to solve their problem. When I ask, how much they owe? How old is the debt? How much is penalties? How much is interest? They don’t have an answer.

How can you know how to solve a problem, if you don’t even understand what the problem is? IRS problems are no different from any other problem. Understanding the problem goes a long way to figuring out how to solve the problem Radio and television ads always push to pay the IRS pennies on the dollars – an offer-in-compromise. So, that’s the remedy clients want. They want to pay pennies on the dollar. The problem is, an offer-in-compromise is NOT the right answer for every case. In fact, putting an offer-in-compromise forward may be exactly the wrong way to solve your IRS problem.

Begin with an Investigation

So, let’s start at the beginning. First learn exactly where you are. Only then can you chart a course to get you where you want to be. To learn where you are, my office completes an complete investigation. The investigation begins by gathering all of the information we can from the IRS. The IRS has account transcripts for every year, wage Transcripts, tax return transcripts, just to name a few. These transcripts contain lots of information about your IRS problem. At my office, we have access to a a propitiatory software package that takes all that IRS information and puts it into a form we can use to understand it.

The report will detail how much you owe; how much is penalties, and how much is interest. The report will analysis the dates of assessments, the number of tolling days, the Collection Statute Expiration Dates, and the important dates concerning the dischargability of taxes in bankruptcy. The report also provides a breakdown of every payment the taxpayer has made and how they were applied. The report will also reveal if the IRS prepared a tax return for the taxpayer (known as a Substitute for Return, or SFR) or if some returns are still unfiled.

Once we know where the IRS puts you, we gather information about your particular financial situation. We gather this information on IRS Form 433. This form collects the taxpayers income, assets, liabilities, income and expenses. Only after we have all this information can we compose a strategy to solve your IRS problems.

The Six Things You Can Do If You Owe The IRS

Remember, there are only six things you can do if you owe the IRS money. You can pay the IRS what they claim you owe. You can enter into one of several kinds of installment agreements. You can submit an Offer-in-Compromise (offer a lump sum settlement). You can have the IRS place you in a Currently not Collectible status (get the IRS to leave you alone for a time without payments). You can seek protection under the bankruptcy code. Or, finally, you can do nothing and let the IRS have their way with you.

Don’t let someone tell you they know how get you where you want to be (solve your IRS problem) – unless they know where you are now. That’s why a complete investigation is so important.

If you are facing IRS Problems, call Opem Tax Resolutions at 312-664-6649. If you mention this blog post, we will complete the first step, the IRS analysis report, for FREE.

6 Things You Can Do If You Owe The IRS

by

Steven A. Leahy
6 Things You Can Do If You Owe The IRS

By Steven A Leahy

My office helps businesses and families fix their IRS problems fast. What you need to know is there are only Six Things you can do if you owe the IRS.

The first thing you can do is – pay the IRS. Generally, I recommend that taxpayers pay the IRS any way they can. Borrow from family and friends, even credit cards, better to owe anyone else but the IRS. You can still apply to abate any penalties after you pay. But, it is best to resolve your IRS problem as quickly as you can.

The second thing you can do if you owe the IRS money is to enter into an installment agreement. There are several different kinds of installment agreement: Guaranteed Installment, Streamlined Installments; Partial Pay Installments and Full pay installments. Determining what your monthly payment should be is more an art than a science. If you enter into an installment agreement and default, you will find yourself right back where you started. So, be careful! Don’t let the IRS force you into an agreement you can’t afford.

The next thing you can do if you owe the IRS is an Offer-in-Compromise. An Offer-in-Compromise is a reduced amount the IRS will agree to accept “in compromise.” The recent IRS Fresh Start Initiative changed some of the parameters of this program, making it easier for taxpayers to qualify. Historically only about 18% of applications were approved. So all of those commercials you hear about “paying the IRS pennies on the dollars” actually very rarely occurred. It may take a year or longer before you find if your offer is approved or denied – once the offer is denied you may find yourself right back where you started.

The fourth thing you can do is have the IRS declare you Currently Not Collectible. If you can prove to the IRS that you don’t have enough money at the end of each month to pay your reasonable and necessary expenses and pay the IRS. The IRS will agree to leave you alone for a time – not forever. But they will give you time to recover, without worrying about the IRS garnishing your wages of levying your bank accounts. If your income increases, the IRS may ask you to re-establish your currently not collectible status, or work out an installment agreement. Often, this is a good alternative. People often panic because they know they owe the IRS and know they can’t pay them – so they bury their head in the sand. Instead, address the problem and prove you can’t pay.

You can also file bankruptcy if you owe the IRS – that’s the fifth thing you can do. Taxes in bankruptcy can be very complicated, and not all taxes are dischargeable in bankruptcy. But many taxes are dischargeable, and we have helped many taxpayers walk away from their tax obligations. Because taxes in bankruptcy are complicated, make sure you find an attorney who understands tax issues and not just bankruptcy. Not all bankruptcy attorneys do.

The final thing you can do if you owe the IRS money, and this is what many of my clients do before they hire us to help them, is nothing. You can stick your head in the sand, pretend the IRS will forget about you and worry day and night about freezing bank accounts, garnishing wages and taking away your assets.

While there are only six things you can do if you owe the IRS, there are unlimited ways to mix these options to achieve the best results for you. So, if you have IRS problems, you should work with a local law firm. Better, you should give me a call – Opem Tax Resolutions & The Law Office of Steven A. Leahy, PC (312) 664-6649. I want to help! Call NOW to set up your FREE Consultation.

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