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What Organization is Tougher Than The IRS?

August 24, 2016 by admin

Steven A. Leahy

What Organization is Tougher Than The IRS?

By Steven A Leahy

Remember, there are only 6 things you can do if you owe the IRS money. Before you hire someone to help you resolve your IRS problem, make sure they offer you every option possible. Many (most) tax resolution companies are not law firms – even if they have an attorney working for them. That means they can’t offer you all your options.

Let us review the six things you can do. 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.

Sometimes, the very best option – clearly – is filing for protection under the bankruptcy code. Unless the tax resolution company you talk to is a law firm experienced in bankruptcy – and non-attorneys can never be qualified to offer you advice about bankruptcy – you may never even be exposed to that option.

Most of my clients owe the IRS a sizable amount of money – and many are what can be defined as “above-median debtors.” That means their monthly income exceeds the median (average) income for the household of the same size as the debtors’ in the same state of residence. For these taxpayers, working out a solution with the IRS can be very difficult because, often, the IRS will not allow all of their actual expenses when determining a remedy. If their mortgage is higher than the IRS allows, their payments or settlement with the IRS will be too high to allow both payments. This may force the taxpayer out of their home or cause a default with the IRS agreement.

The only organization stronger than the IRS is the Federal Court System. That is why bankruptcy is sometimes the best option. If the IRS is insisting that you give up your home, they won’t release a levy or they insist on an unreasonable monthly payment, bankruptcy may be the answer.

For example, I have an above-median couple who has a large IRS obligation, a very high mortgage payment and find themselves behind on their mortgage payments. The IRS insisted on full payment over a short period of time; a payment that would not allow them to keep their home.

Under Chapter 13, the federal bankruptcy law changes the focus of their repayment plan from repayment of the IRS debt, to keeping their home. Under their Chapter 13 plan, these taxpayers will pay their monthly mortgage, pay down the mortgage arrears and pay the IRS a small portion of the IRS claim.

I had another client who came to see me after the IRS levied his employer – leaving him with zero income. We negotiated with the IRS Revenue Officer for a time, put he would not relent and release the levy. My client was concerned that he would be evicted from his apartment if he missed his rent payment. The day he filed for protection under the bankruptcy code, the IRS was forced to release the levy, my client received his pay check, paid his rent and proposed a plan to pay his creditors over five years.

These remedies aren’t possible in many (most) tax resolution firms. Taxes under the bankruptcy laws can get very complicated. That is why it is vital that you seek help from someone who can offer all available remedies, including bankruptcy. So, if you find yourself with an IRS Problem, call Opem Tax Resolutions and The Law Office of Steven A. Leahy at 312-664-6649.

Filed Under: Uncategorized Tagged With: “Owe Taxes”, “Tax Relief Chicago”, Help With IRS, IRS Help, IRS Help Chicago, irs options, irs tax penalty, IRS Tax Problem, Tax Problem Help, taxes and bankruptcy, TaxHelp

Solving Your IRS Problem – And Keeping it Solved!

August 18, 2016 by admin

Steven A. Leahy

Solving Your IRS Problem – And Keeping it Solved!

By Steven A Leahy

Listeners to the IRS Radio Hour – heard every Sunday afternoon at 5:00 on AM 560 The Answer – know I help people and businesses solve their IRS problems. What I have learned is – solving the IRS problem is only step one. The next step is keeping the problem solved.

When you reach an agreement with the IRS – whether the remedy is an offer-in-compromise, installment agreement or being declared currently not collectible – there are other conditions of the agreement, conditions often overlooked by taxpayers. For example, here are the conditions included in a recent installment agreement we worked out for a client with the IRS. The IRS wrote:

The other conditions of this agreement are:

– You file and pay on time all federal and state taxes due during the term of the agreement.

– We’ll apply all installment agreement payments to the oldest tax assessments first, then penalties, then interest on that assessment.

– You pay all installment agreement user fees.

– You provide a current financial statement when we request one. If you have a change in your ability to pay, we can revise or cancel your installment agreement.

In addition, the IRS will “apply any refunds you’re due to the amount you owe until you pay your balance in full. A refund payment isn’t a substitute for a monthly payment.”

The first condition is the most common stumbling block. Taxpayers often fail to file and pay all federal and state taxes on time. On time, to the IRS, means NO EXTENSIONS. If you fail to meet any of these conditions, the IRS will cancel the agreement and the taxpayer will find themselves right back where they started.

That’s why, once we solve a client’s IRS problem we offer to continue monitoring the case under our IRS Protection Plan. Under the IRS Protection Plan, we continue covering our client with our Power of Attorney, so we continue to receive all IRS notices. We offer on-going advice about tax issues and we complete their annual tax returns. Occasionally the IRS will erroneously cancel an agreement, or cancel an agreement but agree to re-instate the agreement after a request is submitted. Our IRS protection plan covers those items too. In addition, if you do default, we will offer a discounted rate to work with the IRS on a new agreement.

Even if you don’t default, some agreements, such as partial installment agreements or currently not collectible status may be reviewed after some time, typically every 2 years. And the IRS Protection Plan will provide a discounted rate for that service also.

So, even after you fix your IRS problem, you have to remain vigilant. That’s where Opem Tax Resolutions and The Law Office of Steven A. Leahy, PC comes in with the IRS Protection Plan. Give me a call at 312-664-6640 to fix your IRS problem and KEEP the problem fixed!

Filed Under: Uncategorized Tagged With: “Tax Relief Chicago”, Chicago Tax Help, currently non collectible, Help With IRS, IRS Help, IRS Lien, irs non-collectible status, Offer in Compromise IRS, Offer in compromise Settlement, Tax Debts, Tax Help Chicago, tax options Chicago, Tax Problem Help, taxes and bankruptcy

Surprise! Your Chances of Paying The IRS Less is Better Than Ever!

August 10, 2016 by admin

Steven A. Leahy

Surprise! Your Chances of Paying The IRS Less is Better Than Ever!

By Steven A Leahy

On the IRS Radio Hour (heard every Sunday evening at 5:00 on AM 560 The Answer) I often talk about the six things you can do if you owe the IRS. 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.

The third option, and often the most attractive, is an Offer-in-Compromise (OIC). An OIC is an agreement with the IRS to pay a lump sum as a settlement for the entire IRS debt. Often on radio and television ads, this is the option they refer to when they promise you can pay the IRS “pennies on the dollar.” This promise led to the demise of many national tax resolution companies, because they would charge a client for an OIC, knowing the offer would be rejected. Then charge again for the real remedy.

Historically, the OIC was a bad option because only a small percentage of offers were accepted. For example in 2003 only 17% were approved. In 2014, nearly 40% were accepted! What happened? Why did the acceptance rate more than double in 11 years? What changed?

Well in 2011 the IRS put forth the “Fresh Start Initiative” which changed the OIC program. Before the Fresh Start Initiative the OIC program was limited to those few who had little to zero assets, and could prove they could never pay the IRS. The initiative gave the IRS more flexibility when calculating a taxpayer’s “reasonable collection potential.” The amount the IRS will accept for an Offer-in-Compromise depends on three major factors – the taxpayer’s monthly disposable income, the multiplier, and the taxpayer’s assets. The reasonable collection potential is calculated: (taxpayer’s monthly disposable income) x (the multiplier) + (value of assets).

Disposable income is the difference between a taxpayer’s income and their expenses. The IRS uses national standards when calculating expenses, not the taxpayer’s actual expenses. Historically, the IRS did not consider many of the taxpayer’s actual debts. Under the initiative, the IRS will now allow taxpayer’s to deduct student loan payments and monthly payments for state and local delinquent taxes. The national standards now also include a “miscellaneous” allowance. The miscellaneous allowance can be used for credit card payments and other debts that were previously not considered. The additional expenses will reduce the calculated monthly disposable income.

The biggest change concerns the multiplier used to calculate the amount the IRS will settle the debt. Once a taxpayer’s disposable income is calculated, the IRS uses the multiplier to calculate the cash component. If the taxpayer can pay the lump sum in five or fewer months, the IRS multiplier was 48 (4 years). Now, that multiplier is 12 (1 year). If the taxpayer can pay in 6 to 24 months, the multiplier was reduced to 24 (2years) from 60 (5 years). The decreased multipliers significantly reduce the reasonable collection potential calculated to settle an IRS obligation.

The asset calculation has also been reduced. The IRS will use 80% of the value of assets, overlook some dissipated assets and forego any equity in income producing assets in calculating the asset portion of the offer-in-compromise. All of these changes have the effect of lowering the calculated “reasonable collection potential.”

If you have an IRS problem and are looking to find a way out, maybe the Offer-in-Compromise will be your best option. Find out. Before you do anything, you should give me a call. We can discuss your 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: “Owe Taxes”, “Tax Relief Chicago”, IRS Help, IRS Lien, Offer in Compromise IRS, tax attorney chicago, Tax Problem Help, tax resolution chicago, taxes and bankruptcy

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

July 6, 2016 by admin

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.

Filed Under: Uncategorized Tagged With: “Owe Taxes”, “Tax Relief Chicago”, back taxes, Chicago Tax Help, Help With IRS, IRS Help Chicago, IRS Options Help, IRS problem, IRS Tax Debt, IRS Tax Problem, Offer in Compromise IRS, Offer in compromise Settlement, tax resolution, taxes and bankruptcy

IRS Lien vs Levy

February 26, 2015 by admin

Steven A. Leahy
IRS Lien vs Levy

By Steven A Leahy

On the IRS Radio Hour I often talk about the way the IRS works. The most important aspect of how the IRS works goes directly to how the IRS can collect assessed taxes from taxpayers, outside of voluntary agreements, like installment agreements, offers-in-compromise, currently not collectible, and bankruptcy. When a taxpayer ignores, or otherwise fails to negotiate a work out with the IRS, the IRS may take some drastic actions. The most dramatic action is a levy. This article will clear up IRS Lien vs Levy.

Many taxpayers confuse a levy and a lien. A federal tax lien is the federal government’s legal claim against a taxpayer’s property when a taxpayer neglects or fails to pay a tax debt. The IRS files a public document, the Notice of Federal Tax Lien, with the county recorder to alert the taxpayer’s creditors that the federal government has a legal right to the taxpayer’s property. A lien does not result in seizure of any of the taxpayer’s property.

A federal levy, on the other hand, is a legal seizure of a taxpayer’s property to satisfy a tax debt. If a taxpayer fails to pay the assessed tax, or make satisfactory arrangements to settle the debt, the IRS may seize any type of asset, real or personal.

There is a three-pronged procedure in place the IRS must follow in order to justify a levy. First, after the IRS assesses a tax, they must send a Notice and Demand For Payment. Second, the taxpayer must neglect or refuse to pay the tax. Finally, the IRS must send the taxpayer a Final Notice of Intent to Levy and Notice of Your Right to A Hearing. The Taxpayer has 30 days from the date of that notice to request a Collection Due Process hearing with the Office of Appeals.

Once the IRS fulfills their obligations under the three-pronged procedure, they can seize any property the taxpayer is holding (including, cars, boats, houses), or any property someone else is holding (wages, retirement accounts, bank accounts, rental income, accounts receivables, cash value of life insurance or commissions).

In my practice I have seen levies against rental income – the revenue officer actually visited the taxpayer’s tenants each month to collect the rent before the taxpayer could collect; levies against insurance payments due a doctor – the IRS ordered all insurance carriers to send all payments to the IRS; levies on commissions – the IRS contacted the contract employer and levied, took, all commissions the taxpayer was due. A Taxpayer should never under-estimate the creativity of an IRS Revenue Officer looking to levy assets to collect on an IRS obligation.

The two most common levies involve bank accounts and wages; low hanging fruit. Remember, a bank must report any interest paid of at least $10.00 with form 1099-int. So, the IRS knows where most every taxpayer banks. Once a bank receives a Notice of Levy, the taxpayer’s account is frozen – the bank must hold any money in the account, up to the amount you owe, for twenty-one days. After twenty-one days the bank must send the money, plus interest, to the IRS. Any money deposited in the account after the date of levy, is NOT included in the levy. However, the IRS can issue more than one levy on the same account. I have seen accounts levied each week for months on end.

Finally, the levy most taxpayer’s fear is the wage levy. A wage levy is often referred to as a wage garnishment. The IRS issues a wage levy to the taxpayer’s employer, and the employer is obligated to send all net income, less exemptions, to the IRS CONTINUOUSLY. The more a taxpayer makes, the more the IRS will take. Generally, the exemptions are calculated by determining the standard deduction and the amount deductible for exemptions on an income tax return for the year the levy is served, divided by Fifty-two. The exempt income is designed to provide minimal sustenance – not enough to pay your expense. To do that, the taxpayer must work out an agreement with the IRS.

If you are facing IRS Collection Efforts, you should work with a local law firm that understands the IRS Collection procedures and will work to get you the best deal possible. 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.

Filed Under: IRS Radio Hour Tagged With: “Owe Taxes”, back taxes, Chicago Tax Help, Help With IRS, IRS Levy, IRS Lien, irs options, IRS Options Help, IRS problem, IRS Tax Debt, Offer in Compromise IRS, Tax Debts, Tax Help Chicago, tax options Chicago, Tax Problem Help, tax resolution, taxes and bankruptcy

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