irs: How to put your Mom in a Bad Position over Payroll Taxes - 05/24/20 08:33 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. 
 
The Scenario – You need to make payroll this week, but you don’t have the cash. So, you go to Mom for a loan. She wants to help, but there are limits to her willingness. The result is that she writes you a check, labeled loan for the exact amount of the net payroll due that week. Is this a great idea?
 
The answer is absolutely not. IRC Section 3505 allows the IRS to collect unpaid Trust Funds from third party lenders who knowingly lent money for payroll when they knew … (1 comments)

irs: PPP Debt Forgiveness will produce Nondeductible Expenses - 05/06/20 11:37 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. 
 
The IRS has issued a notice that rains upon the PPP parade. The CARES Act sounded like a great thing to keep many small businesses in operations while everybody sheltered at home. Loans at 2.5 times monthly payroll have been issued at super low interest rates. One of the provisions under the Payroll Protection Program declared that amounts spent on payroll, rent, and utilities would be forgiven. What’s more, the amounts forgiven would not be considered to be taxable income, which is usually the case with forgiven loans.
 
Now IRS Notice … (0 comments)

irs: Getting Ready for the IRS to Reopen - 04/06/20 08:47 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
The IRS announced last week in IR-2020-59 that it was shutting down most of its Collection Division Activities. This means no new liens or levies until July 15 unless the Statute of Limitations is about to run. This is good news for most people with IRS debts. But, should you just be watching Netflix?
The nationwide business shutdown means you must get cracking on a plan on how to recover. One of those planning opportunities is to renegotiate your IRS Payment Plan. Afterall, if your business was hurt, it’s not likely … (1 comments)

irs: Why Should the IRS Accept an Offer to Pay Pennies on the Dollar? - 03/31/20 06:38 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
You see the ads on TV about the IRS accepting “pennies on the dollar” to clear their backlog of tax debts. Seems like an easy answer to a big problem. But, as they say, “too good to be true, is usually not true.”
The reality is that while the IRS does accept these offers, 60% of them are rejected according to the IRS Data Book that is issued annually. This makes a ton of sense when you think about it. Afterall, why should a government agency with more collection powers than … (1 comments)

irs: Should you take a Vacation from your Tax Problem? - 03/29/20 12:40 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
The IRS issued a News Release on 3/25 that they were suspending most collection efforts including the requirement to make monthly payments on installment plans. No new levies and liens will be started by the Automated Collection System until 7/15. Additionally, they will stop issuing certificates to the State Department requesting that a taxpayer’s passport be suspended.
The pressure is off. Is it time for a vacation?  The answer is “No” when it comes to planning on how to get out of this hole. The IRS uses the Form 433 to … (1 comments)

irs: Can the IRS contact your Friends, Neighbors, and Employer? - 02/10/20 07:45 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
Can the IRS contact your friends, neighbors, and employer? This is the government, of course they can. But the tax law does require them to give you reasonable notice.
What is reasonable notice you ask? The Ninth Circuit of the Court of Appeals recently ruled that it cannot be a generalized statement referring to third parties in the whole. Instead it must be a written notice that they plan to contact a specifically named party. The Court’s reasoning was that these contacts could be very detrimental to the taxpayer. First, the … (4 comments)

irs: What to do if you can’t pay the Taxes - 02/04/20 01:51 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
There are three basic options that you can use in dealing with the IRS Collections Division:
 Payment Plans – You agree to make regular payments against your debt and the IRS agrees to not bug you too much.  Offer-in-Compromise – You make an offer to clear the debt for less than the face value of the amount owed.  Uncollectable Status – You show that your financial situation is such that you can’t make any immediate payments. Payment Plans
There are several forms of automatically approved plans. If you qualify, all you … (1 comments)

irs: How IRS Levies Work - 01/26/20 09:01 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
The IRS Tax Levy is the method used to actually seize a taxpayer’s assets in order to collect on a tax debt. These levies happen when the taxpayer ignores the IRS about the debt, or there is a breakdown in the negotiations between the two parties. The Levy is the IRS’s hammer and they know how to use it.
The process is straight forward and happens after the IRS has sent various notices trying to collect on the debt. The process itself is as follows:
The IRS issues a Notice of … (1 comments)

irs: Bankruptcy does not necessarily get the IRS off you back - 01/20/20 07:38 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
One of the benefits of filing for bankruptcy is that there is an automatic stay that prohibits the IRS from taking any further collection actions while proceedings are ongoing. On the other side of the formula, the Statute of Limitations that limits the time that the IRS has to collect is also put on hold for the duration of the filing plus 6 months. A Wisconsin couple recently found out that the automatic stay was not an absolute thing.
A district court, Pansier v. U.S., 2019 PTC 494 (E.D. Wis. 2019), affirmed a … (3 comments)

irs: The IRS can Levy Pensions - 01/18/20 07:50 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
The common understanding is that pensions, IRAs and 401Ks are not reachable by creditors. Don’t kid yourself, when it comes to the government they can get to the money. The IRS cannot force you to liquidate these accounts, but they can levy any proceeds you take from them.
What can you do to protect this money? The best answer is to sign up for an Installment Agreement so that the IRS does not issue the levy. Another alternative is to make an Offer-in-Compromise to clear the debt for less than full … (2 comments)

irs: Late Filing can make a Gift of your Refund to the IRS - 01/14/20 05:11 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
The majority of taxpayers get a refund after filing their 1040. Late filing by these people is not normally a problem since all the penalties are based on the amount of tax due. But, filing too late can be costly.
When you file a 1040 requesting a refund you can think of it as having two different functions.
Function 1 is your report to the IRS to self-assess your total tax liability. Function 2 is to file an administrative claim for a refund on the overpayment. If you file your tax … (1 comments)

irs: The IRS Option to Sue You - 01/10/20 03:09 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
Generally, the IRS has 10 years to collect from someone. This period starts on the date of assessment and can be tolled (suspended) for a variety of different reasons. Once the Statute runs, the IRS is barred from doing anything to collect on the debt.
A big part of the strategy to minimize the impact the IRS can have on someone’s life evolves around getting to that statute date. You might be tempted to believe that your almost there at year nine, but you need to be aware that the IRS … (1 comments)

irs: The IRS and Third-Party Contacts - 01/06/20 01:45 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS.
You get a call from your stockbroker or maybe even a customer that they have been contacted by the IRS requesting information about you. The IRS is supposed to notify you in advance of such contacts, but that notification in the past has been less than clear about their intent. The result is that you are taken by surprise and embarrassed while trying to explain to someone why they were called. That IRS process has now been changed for the better.
The 2019 Taxpayer First Act includes a requirement for the … (1 comments)

irs: Dissipated Assets can Kill your Offer-in-Compromise - 01/03/20 07:18 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. You do the many hours of work to produce an Offer-in-Compromise that shows it is in the Governments best interest to accept 50% on the dollar. You then submit it and after waiting for months the IRS finally responds with a counteroffer that is $20,000 higher. Their reasoning – they added an amount for Dissipated Assets. What the heck is a Dissipated Asset?
It turns out that part of the IRS process when evaluating an Offer-in-Compromise is to look back at your last three years of tax returns, specifically at Schedule … (1 comments)

irs: Foreign Financial Accounts Can Cost You Big Time - 12/30/19 08:32 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. Participating in the global economy can easily run you afoul of the Government for the failure to report on Foreign Financial Accounts. The civil penalties for failing to report can cost you 50% of your holdings. Here is the real kicker, you may have to file information on these accounts in two different places – the IRS with Form 8938 and Department of the Treasury with Form 114.
The complexity behind these filings is immense, so here are the bear minimums to alert you if you have a potential problem with this … (0 comments)

irs: The IRS and Private Debt Collectors - 12/27/19 01:23 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. The IRS reinstated an old program in 2019 of using non-government collection agencies to collect IRS tax debts. The IRS’s policy is to only assign accounts that have been “inactive” for more than a year. These collectors are limited in what they can do to collect these debts which is generally a good thing. However, they also do not have the ability to negotiate with taxpayers beyond recommending a payment plan.
What can the Private Debt Collectors do?
Basically, only two things:
      Ask that the debt be paid in full, and … (3 comments)

irs: An easy way to make your IRS Problems a lot Bigger - 12/20/19 12:14 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. Form 433 is used by taxpayers to submit financial information about what they own and future revenues to the IRS Collections Division. This information is used by the IRS to determine how much money they can reasonably expect from a taxpayer with past due debts. The fact that a taxpayer voluntarily provides the information can lead them to make some very bad judgement calls that result in jail time.
How does this happen? They omit cash and property accounts that they own from the Form 433 and then sign it under … (2 comments)

irs: Should you bother to Notify IRS of Address Changes? - 12/14/19 02:42 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. IRS correspondence is rarely a fun thing to receive. The result is that most people fail to notify the IRS of address changes. Most of the time, not a big deal. But sometimes this failure to notify can have really bad results.
 
Typically, the IRS will send three notifications of a proposed change to a tax return. If you fail to respond, the tax will be assessed. You then have 30 days to file a Request for a Collection Due Process with Appeals. Blow by this date and it gets to … (1 comments)

irs: When is it Safe to DIY in Dealing with IRS Collections? - 12/01/19 02:21 PM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. The Do It Yourself (DIY) approach can produce very poor results. Simply not knowing how the system works can result in a payment plan with higher amounts than you can make. But, not always.
 
The IRS does have automatic approval for some plans that do not require you to make detail reports on your financial situation. All it takes is to go online and fill out a form. Just about anybody can handle this. If the plan is not approved or the amount that the IRS program calls for is more … (0 comments)

irs: How long does it take to prepare an Offer-in-Compromise? - 11/20/19 04:12 AM
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. The IRS Offer-in-Compromise is an agreement to clear a tax debt for less than its face value. Paying less is a great goal but your effort will be waisted if you don’t do all the steps.
Making the offer is a time-consuming task that requires a considerable amount of reporting to the IRS to show that a write-down of the debt is in the interest of the government. This hard work could easily be for naught since the IRS rejects about 60% of the offers received.
First of all, you have to … (1 comments)

 
Jim Payne, CPA, CPA firm practicing in the area of IRS Collections (Backoffice Squared) Rainmaker large

Jim Payne, CPA

CPA firm practicing in the area of IRS Collections

Gainesville, FL

More about me…

Backoffice Squared

Mobile: (352) 317-5692

Office: (352) 376-9401

Email Me



Listings

Links

Archives

RSS 2.0 Feed for this blog