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Time Limits to IRS Collection Efforts

March 24, 2015 by admin

Steven A. Leahy
Time Limits to IRS Collection Efforts

By Steven A Leahy

One of my clients recently experienced a wonderful event. Something he has been waiting a number of years for – an IRS claim for more than $900,000.00 in back taxes, penalties and interest along with the IRS Tax Lien that went along with it, has expired. That means he and his wife can sell their house, free and clear of the IRS claim. Great news!! But to understand this we have to go back to the beginning.

This client ran a company with a number of employees. The manager of the company failed to pay payroll taxes for two quarters. Instead, the manager took that money for himself. The IRS obligation totaled more than $900,000.00! The resulting effects cost my client his business – and a personal tax obligation in the form of the Trust Fund Recovery Penalty for more than $500,000.00.

He battled the IRS for a number of years before he contacted my office. He insisted that an Offer-in-Compromise was his best option. I never reach a conclusion until we gather all the facts and complete an investigation. First thing we did was protected him from IRS collection efforts – so the IRS could not attach his bank account or levy his social security any more. Next, we conducted an investigation and determined the best course of action. He was already 5 years into his battle with the IRS, and he had some equity in his home, that made an Offer-in-Compromise unattractive.

What many don’t know is the IRS has a time limit to collect IRS obligations; a sort of Statute of Limitations. Each tax assessment has a Collection Statute Expiration Date (CSED) – a date after which the government’s right to pursue collection ends. Normally the CSED date is 10 years from the date of assessment of a tax liability.

There are numerous events that can delay, suspend and/or extend the CSED. For example, an Offer-in-Compromise, Bankruptcy, entering a combat zone, moving out of the country and a Collection Due Process Appeal stay the tolling of the CSED, adding time for the IRS to collect. That’s why a full investigation should be completed to deduce the actual CSED date.

For my client, trying to resolve the IRS obligation through other means, such as an Offer-in-Compromise may have worked against him. As it turned out, he was granted Currently Not Collectible status with an outstanding balance at the time of more than $800,000.00! Then he rode out the remaining CSED time. In the interim, the IRS did come back, several years later, and required us to re-establish his Currently Not Collectible Status. But all in all, not a bad result – he walked away from more than $900,000.00 in taxes, penalties and interest.

Now, the IRS can bring an action to collect a tax obligation in court. Once a judgment is entered, the CSED date is no longer applicable. Judgments do not have a statute of limitations. But, in most cases, the IRS does not pursue court action against taxpayers. Court is generally reserved for those egregious cases you may read about in the news. Also, depending on the case, the IRS may ask a taxpayer to waive the CSED date – sometimes that’s a good thing – sometime it isn’t. That should be determined on a case by case basis after consultation with your IRS attorney. That isn’t the kind of decision a taxpayer should make without a complete understanding of the consequences.

So, if you have an IRS problem, you should consult with a local attorney. The strategy you use will make ALL the difference in how your life progresses. Before you do anything, you should give me a call. We can discuss your options, complete your an investigation and determine the best course of action. – Opem Tax Resolutions & The Law Office of Steven A. Leahy, PC (312) 664-6649. Call NOW to set up your FREE Consultation.

Filed Under: Uncategorized Tagged With: “Owe Taxes”, “Tax Options”, “Tax Relief Chicago”, CSED, IRS Help, IRS Help Chicago, IRS Problems, IRS Resolution, IRS Time Limits, tax attorney chicago, Tax Help Chicago, TaxHelp

IRS Madness – Reefer Rules

November 21, 2014 by admin

Steven A. Leahy
IRS Madness – Reefer Rules

By Steven A Leahy

On Tuesday, November 4, 2014, Oregon, Alaska and the Washington D.C. made recreational use of marijuana legal. Twenty-one other states allow medical use of marijuana. Illinois now accepts applications from patients for the “Medical Cannabis Pilot Program.” Businesses have sprung up around the country to accommodate the new demand. But the federal government has laws against marijuana – and the IRS enforces those laws through our tax policy. This article will examine our tax laws as applied to those in the “Canabusiness.”

IRS Code Section 280E “prohibits taxpayers[] from deducting any expense of a trade or business that consists of the trafficking of a controlled substance such as marijuana.” Section 280E was drafted in response to a 1974 case involving a Minneapolis drug dealer. After his arrest, the IRS audited him and assessed taxes based on his drug deals. The convicted drug dealer reduced his tax burden by deducting his drug dealing expenses. He included traveling expenses, rent, telephone, equipment, etc. Congress decided to close the drug dealer loop hole and adopted 280E.

Now that states and jurisdictions have legalized the recreational use of marijuana and have permitted medical use of marijuana the tax laws have changed, right. Well not exactly. Under the federal Controlled Substances Act, Marijuana is still a “controlled substance.” The United State Supreme Court has held that “no exception in the Controlled Substances Act exists for marijuana that is medically necessary.”

A number of cannabis dispensaries have found out what this apparent contradiction means. Early on, the IRS interpreted the prohibition to mean that cannabis dispensaries are not permitted any deductions for income tax purposes, including the cost of goods sold. That means dispensaries would be taxed on the gross sales rather than net sales. In a 2012 case heard by the Tax Court in California, Judge Kroupa narrowed that interpretation, holding that the cost of goods sold (COGS) “is not a deduction [] but is subtracted from gross receipts in determining a taxpayer’s gross income.” Therefore, COGS can be used by cannabis dispensaries to reduce taxable income. Other expenses (wages, rent, utilities, etc), however, are deductions and prohibited to cannabis dispensaries under the code. Obviously, the loss of any deduction can make a big difference at tax time.

To add to the burdens of cannabis dispensaries, the IRS assesses a 10% penalty on businesses that pay their federal employee withholding taxes in cash, according to the Denver Post. The Controlled Substances Act also prohibits banks from doing business with cannabis dispensaries. The Justice Department and Treasury have changed some regulations to address the concerns of the banking industry. But the banks are still not comfortable with the change of regulations without a change in the law.

Frank Keating, president of the American Bankers Association said “While we appreciate the efforts by the Department of Justice and FinCEN, guidance or regulation doesn’t alter the underlying challenge for banks.” He continued, “as it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions.”

The banking rules create other problems for cannabis dispensaries. For example, dispensaries can’t get credit card processing accounts, checking accounts or saving accounts. The lack of banking services means the dispensaries deal as a cash business. The large amounts of cash create security problems and IRS reporting concerns.

Those in the canabusiness have been struggling with these IRS problems. If you have IRS problems, you should take action. You need an attorney to help you sort through your options and choose the best remedy. Before you do anything, you should give me a call. We can discuss all your options. Opem Tax Resolutions & The Law Office of Steven A. Leahy, PC (312) 664-6649. Call NOW to set up your FREE Consultation.

Filed Under: Uncategorized Tagged With: “Tax Options”, cannabis, Chicago Tax Help, Help With IRS, IRS Help Chicago, IRS Options Help, marijuana, reefer

Chicago – IRS Solutions

May 21, 2013 by admin

Steven A. Leahy

Chicago: IRS Solutions

Chicago: IRS Solutions – One Way to Get Out of IRS Debt

There are 6 different ways to eliminate IRS tax debt.

Let’s look at one of the easiest….

Pay the bill.

Now before you think I’m being overly simplistic, this is really an option for many people.

Let me explain.

You may want to pay the bill with a credit card.

Credit card debt is usually better than IRS debt.

The IRS actually accepts Visa, Mastercard & American Express for many debts owed to them. Think of it this way…a credit card company has nowhere near the power of the IRS to collect their money…

Not only can the IRS take your wages, but they can also take things like your real estate, Social Security, 401(k)’s, IRA’s, car, boat, house, accounts receivable, cash loan value of your life insurance, or commissions…to name just a few.

The IRS can also put a lien on your personal and investment properties, making it difficult to sell your house, destroys your credit rating and makes it difficult to refinance or get a home equity loan.

Of course, the “big hammer” of the IRS is that they can actually send you to prison for not paying your taxes.

The credit card companies have power, but not near as much as the IRS. If you don’t have enough credit to pay off your IRS debt then you should know that there are other options.

Chicago IRS Solutions. If you are searching for IRS Solutions to your tax problems, or if you have ANY questions about IRS problems, we can help. call Opem Tax Resolution – The Law Office of Steven A. Leahy, PC (312) 664-6649. Call Now to schedule your FREE 1 hour Consultation!

Filed Under: Uncategorized Tagged With: “Offer in Compromise”, “Owe Taxes”, “Tax Options”, “Tax Relief Chicago”, back taxes, Chicago Tax Help, currently non collectible, IRS Help, IRS Help Chicago, IRS Levy, IRS Lien, irs non-collectible status, irs options, IRS Options Help, IRS problem, IRS Solutions, IRS Tax Debt, irs tax penalty, IRS Tax Problem, Offer in Compromise IRS, Offer in compromise Settlement, Relief, steven a. leahy, Tax, tax attorney chicago, Tax Debts, Tax Help, tax options Chicago, Tax Problem Help, tax resolution, tax resolution chicago, Tax Solution

I Owe The IRS Back Taxes Help Chicago

March 26, 2013 by admin

Steven A. Leahy

Chicago: IRS Back Taxes?

Chicago: IRS Back Taxes?

Owe the IRS Back Taxes or Have a Notice of Levy? One of the most common questions we get is “What are back taxes?”

Back taxes are simply taxes that you owe that you didn’t pay when they were due.

They may have occurred because of income not being reported, or maybe because there wasn’t enough money to pay them when they became due.

Whatever the reason, the IRS will find a way to collect… eventually.

Sometimes the IRS doesn’t send notices for a while. If nothing seems to happen or they don’t get ‘caught’ some people start believing that they’ve somehow under the radar of the IRS and that they are getting away with it.

But that isn’t the case at all.

Eventually the IRS catches up with everybody.

Here’s what happens when they do:

1.You’ll get sent a Notice and Demand for Payment from the IRS.
2.You either pay or don’t pay the tax.
3.If you don’t pay, you’ll be sent a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy.

That’s when you know you’ve got big problems.

In 30 days, the IRS is going to start helping themselves to the money in your bank account. If you’ve received a Final Notice of Intent to Levy, you need to take action immediately.

If you are in trouble with the IRS or have received notices that you owe taxes, we can help. call Opem Tax Resolution – The Law Office of Steven A. Leahy, PC (312) 664-6649. Call Now to schedule your FREE 1 hour Consultation!

Filed Under: Uncategorized Tagged With: “Owe Taxes”, “Tax Options”, “Tax Relief Chicago”, “Tax Relief”, back taxes, IRS Help, IRS Help Chicago, IRS Help IL, IRS Levy, IRS Options Help, IRS problem, irs tax penalty, IRS Tax Problem, tax attorney chicago, tax attorneys, tax debt relief, Tax Debts, Tax Help, Tax Levies, Tax Levy, tax problem, Tax Problem Help, TaxHelp

IRS Tax Problem Help: Tax Options Chicago

March 21, 2013 by admin

Steven A. Leahy

Chicago: Is Your IRS Problem Keeping You Up at Night?

Chicago: IRS tax problems causing lost sleep?

The IRS has a lot of power. The power to put you in jail. The power to garnish your wages, and the power to raid your bank account.

But there is something about the IRS that you need to know.

(And something a lot of people won’t tell you about)….

The extreme measures, like jail time and bank seizures, are reserved for people who don’t take action. They aren’t for people like you who are looking for a solution.

When you take action in dealing with your IRS problem you can easily avoid the worst case scenarios.

In fact, the IRS has 5 distinct solutions that allow people who are looking for a solution to make their IRS debt go away.

One of them will make sense for you and your situation.

You don’t have to try to figure out “how” right now. Just take a moment and decide in your mind that you won’t lose any more sleep over an IRS problem.

Because the IRS really doesn’t want to put you in jail or sieze your assets. They want compliance with the tax law, and they want you to work with them to pay your tax bills.

If you are in trouble with the IRS or have received notices that you owe taxes, we can help. call Opem Tax Resolution – The Law Office of Steven A. Leahy, PC (312) 664-6649. Call Now to schedule your FREE 1 hour Consultation!

Filed Under: Uncategorized Tagged With: “Owe Taxes”, “Tax Options”, “Tax Relief Chicago”, “Tax Relief”, IRS Help, IRS Help Chicago, IRS Help IL, IRS Levy, IRS Options Help, IRS problem, irs tax penalty, IRS Tax Problem, tax attorney chicago, tax attorneys, tax debt relief, Tax Debts, Tax Help, Tax Levies, Tax Levy, tax problem, Tax Problem Help

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