Chicago IRS Tax Attorney

Chicago Tax Team - We help business professionals solve their IRS problems - FOREVER!

Free Consultation

How to Stop IRS Collection Efforts – These Secrets may Shock you!

by

Steven A. Leahy

How to Stop IRS Collection Efforts

By Steven A Leahy

IRS Collections can be maddening! The IRS Collection Department can levy your bank accounts, garnish your wages, take your assets, visit your home or workplace in order to collect back taxes. Here is the key to Stopping the IRS Collection efforts – compliance. That means filing your tax returns and paying your taxes in the future on time. It also means setting up a remedy for your past due tax obligations.

There are only 6 things you can do if you owe the IRS money – I talk about these six things over and over again. First, you can pay the IRS everything you owe them. Second, you can set up an installment agreement with the IRS. Pay them over time. Third, you can submit an Offer-in-Compromise, to pay a lump sum to settle the debt. Fourth, you can be declared currently not collectible – prove to the IRS you don’t have any disposable income after you pay all your monthly bills. Fifth, you can file for protection under one of the Chapters of the Bankruptcy laws. And, finally, you can continue to do nothing and let the IRS have their way with you.

Most people who come to see me are just plain scared of the IRS, and believe there isn’t a remedy that will work for them. So, they choose number six – they do nothing. It may take some time for the IRS to focus on your tax problem, but they will get around to it. Do not interpret the delay as proof the IRS has forgotten about you and you are “under the radar.”

One of the most common remedies for IRS problems is the second option, installment agreements. Now, there are different kinds of installment agreements. Most of my clients that enter into an installment agreement with the IRS enter in to a partial installment agreement. That means, the installment agreement will not pay the IRS obligation in full. This is the part most don’t understand. Even if I owe the IRS way more than I could ever repay, I can set up a partial installment agreement and pay the IRS what I can, even if the amount I can pay is $100.00 and I owe $200,000.00.

Now, most taxpayers think, “that means I will be paying the IRS forever.” But, here is a secret about IRS problems: The IRS has a set amount of time to collect an IRS debt. This date is referred to as the Collection Statute Expiration Date (CSED). Once that date is reached, the IRS must end all collection efforts, including releasing any liens that had been filed.

The best partial installment agreements leave you room to pay all your monthly obligations. We do this by collecting your financial information on an IRS Form 433. On this form, you list all your assets, your liabilities, your income and your expenses. Calculating your disposable income is a simple equation – all of your income, from whatever source, less your “allowed” expenses. The IRS scrutinizes the taxpayers expenses and disallows many of them. By disallowing reasonable expenses, the IRS is inflating your disposable income.

The real negotiations revolve around what expenses are allowed before your disposable income is calculated. That’s why taxpayers need help. The IRS will calculate a disposable income that will not allow you to pay all your other obligations. That guarantees the taxpayer will default some time in the future.

If you owe the IRS, a partial installment agreement may be your best remedy. Let’s find out. If you contact my office and mention this article, we will complete an IRS Analysis Report, that will tell you exactly where you stand with the IRS, for FREE. Call me, attorney Steven A. Leahy at 312-664-6649. Tell Bonnie, my scheduler, you want a FREE report.

Who Files Bankruptcy – The Answer Will Surprise You

by

Steven A. Leahy

Who Files Bankruptcy – The Answer Will Surprise You

By Steven A Leahy

With the Trump Bankruptcies in the news lately, you may be wondering “Who Files Bankruptcy?” The answer may surprise you. Bankruptcy is a Federal Law and is administered by the Federal Court System under the rules of the U.S. Bankruptcy Code. “The primary purposes of the federal bankruptcy laws are to give an honest debtor, either a person or a business, a ‘fresh start’ in life by relieving the debtor of most debts, and to repay creditors in an orderly manner to the extent that the debtor has property available for payment.”

In the first three months of 2016, 201.906 bankruptcy cases were filed nationwide – a vast majority (195,679) were consumer cases. There are 90 Bankruptcy Courts – each a unit of a U.S. District Court. The Northern District of Illinois is comprised of the Eastern and Western Divisions, and has 10 bankruptcy judges. 11, if you count the retired Judge that handles a limited case load. The Northern District of Illinois encompasses 18 counties – with court locations in Chicago, Joliet, Rockford, Lake County and Geneva.

The Northern District of Illinois leads the nation in bankruptcy filings with 47,535 case filings over the 12 month period ending March 2016. That is actually a decrease of 6.6% compared to the previous 12 month period. A recent study revealed the top reason people file for protection under the bankruptcy code is – Medical Bills! The second reason is – Job loss! Both of these reasons may have nothing to do with the person filing bankruptcy.

I help people resolve their IRS problems. As I have mentioned many times – there are only 6 things you can do if you owe the IRS money. One of those six things is bankruptcy. Many of my clients are reluctant to even consider bankruptcy as a remedy. They believe it isn’t morally available to them. They have always paid their debts, and filing bankruptcy would go against that value.

First, often a tax debt includes an unreasonable amount of penalties and interest. A debt that may not hold the same moral obligation as the underlying debt. Second, as I explain to my clients, bankruptcy does not protect you from your moral obligations. Bankruptcy only protects you from some legal obligations. My favorite example is Abraham Lincoln. That’s right Honest Abe sought protection under the bankruptcy laws. You see, he had creditors taking legal action against him after a failed partnership in a General Store.

The Bankruptcy Code protects a person from their creditors. Most creditors are prohibited from collecting on the debt. It does not, however, prevent that person from repaying their creditors if they elect to do so. Honest Abe is a good example of this concept. Once granted legal protection from his creditors, Abraham Lincoln felt he still had moral obligations to repay his creditors. He paid every creditor back. It took some time to accomplish this – but in the end, his creditors were paid.

If you were to seek legal protection from your creditors, like the IRS, you could still repay the debt, at your convenience, should you feel a moral obligation to do so. Maybe you feel a moral obligation to pay the underlying debt, but not the unreasonable penalties and interest. You could do that. The IRS would accept the money!

If you have IRS problems and need the help of a professional to resolve it – I encourage you to call my office. Opem Tax Resolutions and the Law Office of Steven A. Leahy, PC helps taxpayers resolve their IRS problems

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.

Why You Must Think Twice Before You Refinance Your Home To Pay The IRS…

by

Steven A. Leahy

Why You Must Think Twice Before You Refinance Your Home To Pay The IRS…

By Steven A Leahy

The housing market is making a come back! That is good news for home owners. It may also be good news to taxpayers. Here’s why. There are only Six Things You Can Do If You Owe the IRS. The first is to Pay the IRS what they claim you owe. I often tell clients it is better to owe anyone else instead of the IRS. The IRS has vast powers of collections. Powers other creditors do not have. Powers like liens and levies. The IRS can take you stuff without a court order!

With the value of property increasing, homeowners may be able to tap into that equity to resolve IRS problems. There is a catch. If you wait too long the IRS will file a lien. The lien covers all your property – everything you own, AND, everything you will own. If you try to refinance after the lien has been filed, the IRS will have a superior right to your property. In real estate law, that is known as “First in Time, First in Right.” Meaning, the IRS lien would pre-date a new loan, so the new loan would be a second lien. Mortgage Companies aren’t likely to give you a loan if they have take a position behind the IRS. There is another problem too. Once the IRS files a lien against you, your credit score is likely to plunge at least 80 to 100 points! Ouch!

The first problem can be solved by paying the IRS in full out of the proceeds of the refinance. You can ask the IRS to provide you a Payoff letter for the closing. If the IRS is paid in full, the lien will be released and the Title Company will insure over the IRS Claim.

But what if the refinance won’t pay the IRS in full? In that case, you can work with the IRS to subordinate their claim to the new mortgage. Subordination is when one party agrees to let another party jump in front of them in order of liens. That way your new mortgage will be in front of the IRS and more likely to agree to fund the loan.

Problem solved, or is it. Remember, the lien will clobber your credit score. So, even if the IRS will release the lien after refinance, or agree to a second position, your new credit score may prevent any mortgage company from providing a loan.

To work around this we may be able to use the new program under the IRS Fresh Start Initiative. This new program allows some taxpayers to have the lien Withdrawn completely, not just released. If the IRS agrees to Withdraw the lien, you can have the lien information REMOVED from your credit report! Like it never existed! A lien Release does NOT have the same effect. Once a lien is released, the blemish on my credit report remains, and continues dragging down your credit score. I have seen a lien Withdraw have a near instant increase in credit scores by 80 – 100 point. The increase in the credit score makes the refinance work, at a much lower interest rate, solving the IRS problem.

In order to get the IRS to Withdraw their lien, you have to follow all the IRS procedures. And it may take some months to accomplish. But it can work. If you are looking to resolve your IRS problem any you have equity in your home, this may be your solution.

Let’s find out. Call me, Attorney Steven A. Leahy and I will provide you with a free in office consultation to review your situation and see it this program is right for you. Call me, the Chicago IRS Answer Man at 312-664-6649 and let us resolve your IRS problem for good.

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.

Our Resources

Testimonials

Our Office

Our Office has represented Clients throughout Chicago & Northern Illinois. We represent many clients from Cook County; however, we have represented clients from:

DuPage County
Kane County
Kendall County
Grundy County

Lake County
McHenry County
Will County
LaSalle County

We have helped taxpayers in Wisconsin, California, Tennessee, and perhaps your state. No matter where you call home, we look forward to your telephone call for your FREE consultation.