California Dual Licensed Tax Collections Attorney & CPA
Owing large sums of money to federal or State taxing authorities can quite often lead to a powerful financial crisis that can end marriages and cause untoward stress that can affect the health and wellbeing of those that are unfortunate enough to be faced with it. The combined yet uncoordinated federal and state tax collection actions can become rather complex depending on the facts and circumstances of each case and size of the overall tax liability including penalties and interest. You’re not dealing with a normal creditor and the taxing authorities have the power to force you into collection alternatives that can involve simply unacceptable lifestyle adjustments while you dig out of the financial hole you find yourself in. For example, if you owe over $100,000 to the IRS they are not required to offer you an installment agreement and can immediately resort to aggressive collection action like forcing you to sell assets that you own to pay them off. As a result, a tax debtors should consider the benefits of retaining a dual licensed California Tax Collections Attorney and CPA to deal with any tax collection problems that may arise and attempt to reach an acceptable collections alternative.
The Tax Law Offices of David W. Klasing has decades of experience in handling all civil and criminal aspects of federal, state, and local tax collections, and our legal and accounting teams are also ready willing and able to assist you when it is time to file your taxes. Our firm will work tirelessly to make sure your tax returns are filed timely and that they adhere to federal and state laws. If you are interested in making an appointment for your tax collection concerns, call our law offices at (800) 681-1295 or schedule online here. Our website offers more information about the various confidential reduced rate initial consultations we offer.
IRS Tax Collections Statute of Limitations
Many taxpayers are unaware that Internal Revenue Service (IRS) tax collections are subject to a 10-year statute of limitations. A statute of limitations is a law that governs the maximum length of time that a party to a legal dispute must bring their case to a court. Differing Statutes of Limitations apply to civil or criminal issues / claims.
When discussing tax collections, the statute of limitations allows the IRS to collect back taxes for a maximum of 10 years. The 10-year time period generally begins from the date that the tax was assessed; however, there are several circumstances that toll (stall) the ticking of the collection stature of limitations. Requesting an offer in compromise or filing a collection due process appeal for example. If the IRS is not able to collect the total amount of a taxpayer’s debt within the 10-year timeframe, they are required to eliminate the remaining balance from a person’s debt unless they go into federal court to obtain a judgement which never tolls but they rarely do so.
The IRS rarely draws attention to the statute of limitations for the payment of tax debts. After learning about the Collection Statute Expiration Date (CSED), some taxpayers may consider whether they could wait till 10 years elapse to eliminate their tax debt. However, any taxpayer that is considering this plan should know that the IRS will typically double their efforts, often resorting to levies, to collect the tax debt before they allow the CSED to expire. For example, a representative from the IRS may suggest that the taxpayer applies for a (at times accelerated) payment plan in order to secure the debt of the taxpayer before the CSED expires.
It is also important to note that the 10-year limitation on tax collection may be delayed if the taxpayer engages in any of the following actions:
- Filing a lawsuit against the IRS
- Making an appeal
- Filing for bankruptcy
- Applying for an Offer in Compromise
- Agreeing to increase the CSED
- Leaving the country for a minimum of six months
IRS Tax Collection
When a taxpayer files their return, it is expected that they will pay their tax debt in full. If the total amount of taxes is not paid when a return is filed, this is where the IRS or State tax collection process will begin. The IRS will pursue back taxes, penalties and continually compounding interest until the taxpayer has paid in full or until the collection period expires.
A taxpayer will be made aware of their back taxes when the IRS or State sends the initial notice of their bill. In addition to the amount of tax money owed, this notice will highlight any penalties assessed by the IRS or State and interest that accrued on the unpaid balance.
The interest on the back taxes will compound every day it is not paid. There will also be a 5% of the outstanding balance for each month (maximum of 25% of the underpaid tax) late filing penalty or late payment penalty. As a result, it would be wise to plan to pay any taxes owed through timely estimated tax payments to avoid estimated tax payment penalties but if not possible before or on April 15th following each calendar tax year. The IRS suggests seeking a cash advance on a credit card or seeking a personal loan with a low-interest rate where necessary to stay in compliance. Our team of dual licensed California Tax Collections Attorneys & CPAs can help you consider all viable options to repay your debt, or where simply not possible, consider currently non collectible, tax motivated bankruptcy or offer in compromise as collection alternatives and assess related negative consequences of each.
If you are not capable of paying your entire tax debt at once, you could consider requesting an installment agreement from the IRS. An installment agreement will allow a taxpayer to make monthly payments to the IRS that include a principal and interest component like a bank note until their tax debt is satisfied. There may also be other options available like an “Offer in Compromise” or a partial payment installment agreements.
Tax Relief and ResolutionMost taxpayers believe that they handle their taxes appropriately and that they are unlikely to face an audit. Furthermore, most taxpayers also believe that they are unlikely to face significant tax penalties because enforcement actions are more likely to affect someone who earns significantly more money. Unfortunately, these assumptions are not always sound. While it is true that individuals with significant incomes are audited at a higher rate than individuals with incomes closer to the state or national average, an audit with devastating financial effects can happen to any taxpayer.
It may take several years before the IRS detects your mistake, oversight, or overly aggressive deductions. In the meantime, you may have compounded your liability by engaging in the same or similar behaviors for multiple tax years. When the IRS detects and engages in a tax enforcement action against the taxpayer, significant penalties and interests may have already accumulated. As such, the unpaid tax due and owing may become impossible for the taxpayer to satisfy or it may represent a significant hardship.
The tax relief professionals of the Tax Law Offices of David W. Klasing are experienced Los Angeles tax attorneys and CPAs. They are dedicated to mitigating the consequences faced by taxpayers who have accidentally strayed from compliance with the U.S. Tax Code. To schedule a private, reduced-rate tax relief consultation call 800-681-1295 or contact us online today.
Offer in CompromiseIf you have tax debt that is far more than you could possibly pay, the IRS Offer in Compromise program (OIC) might be a tax relief option. An Offer in Compromise resolves a taxpayer’s liabilities with the IRS for less than the full amount owed. An OIC might not be the best solution for you, as not everyone qualifies and there are various conditions that must be met before and after your offer is accepted. I know the parameters of the Offer in Compromise program and can educate you about your options.
How Do I Know I Need Tax Relief and When Is it Appropriate to File?After receiving notice of the unpaid tax obligation that is due and owing from the IRS a taxpayer may request a hearing and potentially utilize the Collections Due Process (CDP) procedures. A notice that triggers this right is likely to have a title or subject similar to the following:
• Final Notice - Notice of Intent to Levy and Notice of Your Right to a Hearing
• Post Levy Collection Due Process (CDP) Notice
• IRC 6320 - Notice of Federal Tax Lien Filing and Your Right to a Hearing
• Notice of Jeopardy Levy and Right of Appeal
A Collections Due Process hearing can be requested by filing IRS Form 12153 – Request for a Collection Due Process or Equivalent Hearing. If a taxpayer wishes to engage in this relief option, the request for a hearing must be filed within 30 days or receipt of the final intent to levy notice. This is often the only opportunity to take effective control over your issue as the Revenue Officer assigned to the case is prohibited from taking collection actions in many cases while the appeal is pending.
At the hearing, your tax attorney will present information as to why the collection action is erroneous or not warranted. Furthermore, your tax relief representative should present an alternative plan to the IRS regarding the collection action. Your representative may suggest alternatives including lien subordination, offer in compromise, innocent spouse relief, or an installment agreement.
Questions and Answers About Tax Relief and Tax Resolution
- What to do if there is an IRS discrepancy in amounts owed?
- What are IRS allowable expenses?
- Does the IRS allow other expenses as necessary expenses?
- What do I do if I owe payroll taxes?
- Can I set up a payment plan for unpaid payroll taxes?
- How is our tax relief law firm different?
- What are the failure to pay tax penalties?
Relief Through BankruptcyWhether or not a taxpayer can discharge tax debt through bankruptcy is often answered with uncertainty. Even to many tax professionals, tax motivated bankruptcy is often misunderstood. The truth is, not only can bankruptcy help get rid of many tax debts, but it can also stop collection attempts by the IRS or state tax agencies while you are in the bankruptcy process.
Before and during the bankruptcy, there are generally more questions than answers. But at the Law Offices of David W. Klasing, my legal team and I will guide you towards tax relief every step of the way. With a combined 20 years of experience as a Certified Public Accountant and tax attorney, I know the tax motivated bankruptcy process inside and out and can offer a helping hand to those who need it most.
Need help or have a Tax Relief Question? Contact us!
Tax Relief through Collections Due ProcessThe Collection Appeals Program (CAP) is a tax relief alternative that taxpayers can choose to pursue. However, it is important to note that entering into this appeals program for tax relief is binding. As such, it requires taxpayers to waive their right to further appeal or relief proceedings in federal court. Taxpayers who wish to engage in this program can do so only after receiving one of the following notices from the IRS:
• Notice of Levy
• Notice of Seizure
• Notice of Federal Tax Lien
• Denial of Installment Agreement
• Termination of Installment Agreement
Taxpayers can enter into CAP by completing by completing IRS Form 9423, Collection Appeal Request. However, taxpayers should be aware that procedures for entering into the program differ if you have not already been contacted by an IRS Revenue Officer.
While CAP is often used to appeal the cancellation or denial of an installment agreement, it can be used to provide a pathway to relief for other concerns. You may also appeal rejected offers in compromise (OIC), denied requests to abate penalties, denied trust fund recovery claims, and proposed trust fund recovery penalties.
Tax Lawyers Provide Experience Tax Relief GuidanceThe experienced Los Angeles attorneys and CPAs of the Tax Law Offices of David W. Klasing can assist taxpayers facing significant tax obligations and request relief. We can provide guidance as to whether you are required to provide financials to the IRS. If not, we can help determine whether it would be prudent to do so despite the lack of an obligation. We can also assist a taxpayer in determining how the IRS calculated his or her income, and address discrepancies in the taxpayer’s ability to pay that may result from an errant calculation. Furthermore, we can assess how the taxpayer and IRS handled “allowable expenses” and determine if errors or oversights provides room for tax relief. Finally, we can also discuss the benefits and drawbacks presented by a tax-motivated bankruptcy.
The above represents only a selection of the relief options we can explore. If you are facing an undue hardship to the imposition of significant tax obligations, penalties, and interest you may be able to reduce the burden by requesting tax relief. To schedule a tax relief consultation with an experienced tax professional from the Tax Law Offices of David W. Klasing call 800-681-1295 today or contact us online. The professionals of the Tax Law Offices of David W. Klasing are experienced on Los Angeles tax relief.
California Franchise Tax Board Collections
The Franchise Tax Board (FTB) is also responsible for collecting income tax debt. Similar to the IRS, the FTB will pursue a tax lien on the taxpayer’s property if they ignore all notices regarding their tax bill. The FTB could place a lien on vacant land, homes, business equipment, vehicles, and many other types of property.
If a taxpayer continues to ignore their back taxes after a lien has been issued, the FTB could seize the property named in the lien (often bank accounts) in order to pay off the debt. They may also initiate proceedings to garnish the wages of the taxpayer.
It is also important to note that the FTB has a 20-year statute of limitations on the amount of time they must collect back taxes. This period could also be reset if fees or penalties are assessed on the debt before 20 years elapse. The FTB also seems to take the position that any correspondence on tax debt resets the 20-year collection statute.
Call Our Dual Licensed California Tax Collections Lawyers & CPAs Today
Our dual licensed California Tax Collections Attorneys and CPAs are devoted to making sure our clients receive the collection alternatives they deserve. At the Tax Law Offices of David W. Klasing, we have the experience and tools needed to keep you compliant with federal and California tax laws and collection procedures. To arrange a consultation regarding your tax collection obligations, call our firm today at (800) 681-1295 or schedule online here.