FTC filed a major law enforcement action against a national operation based in Beverly Hills, California, that allegedly bilked consumers out of more than $60 million by falsely claiming it can lower people’s tax debts. The key word is allegedly and the courts will decide this outcome.
Be it necessary to say that any professional who guarantees results in dealing with IRS is either naïve or lying. Think for a minute, how can anyone guarantee an outcome when a 3rd party is involved?
IRS procedures are established to arrange tax liability workouts. Until the procedures are followed and then negotiated, it is not likely that any resolution with IRS will be made.
Did you know that during an audit or an IRS visit that after the agents finish their conversations at your home or business or at the IRS office that they immediately go to their cars or cubicles and write up what you said?
Their writings become prima facie evidence for future IRS assertions against you. This becomes legally sufficient to establish a facto case against you unless disproved. All your assets could be at risk. These written IRS memos give the IRS position to determine if assets that they can collect are in jeopardy and thereby seizable. Levies and garnishment documents can be marshaled against you that day if the IRS thinks that these assets may disappear before the IRS can seize them.
Remember that IRS agents are trained in effective interrogation techniques. What can you do? Memorize these words: “I want counsel present at this meeting and any and all other future meetings.” Then obtain competent tax professional counsel there to answer any and all IRS questions. You do not give out any information because what you say could be interpreted to be different than what you meant, thereby creating an area of distrust and further question. Their job is to collect from you one way or another. If you don’t have the money then other assets are at risk. This includes and is not limited to any and all personal property, cars, retirement accounts, homes, farms, safe deposit box contents, etc.
REMEMBER: MEMORIZE THE WORDS AND CALL US!
The IRS does deal on taxes owing, including all penalties and interest. The requirements are rigid, but if you qualify the results are FANTASTIC.
To qualify for a deal with the IRS, we would suggest that you owe the IRS at least $5,000, and have very little in the way of equity in assets. Also, you must be using your monthly income to pay your necessary living expenses and not have much or only a small amount left over to pay old taxes. There are also special issues and considerations such as age and health that can provide for a negotiated settlement.
If you meet these requirements then you owe it to yourself to explore the possibilities of PAYING THE IRS ONLY 10 CENTS ON THE DOLLAR FOR THE TOTAL AMOUNT OWING, OR LESS!!!
The IRS cuts these deals to get you back in the system as a current taxpayer and to collect a few bucks on the old taxes owing. The fine print in these deals requires you to file your tax returns and pay on time for the deal and bills you for the original amount.
OFFERS IN COMPROMISE, WHEN ACCEPTED, allow the taxpayer and their families to get a fresh start. If you think you may qualify, then you must consider it as the best TAX SAVING TOOL available.
You can avoid most IRS audits by doing a couple of things. They are:
- Report all Income for which you received 1099’s or W-2’s.
- Avoid schedule “C”.
- Set up some type of record keeping system.
- Don’t make your return look absurd. If it does, attach an explanation. When we say: “Don’t make your tax return look absurd,” we mean that your entire return must look reasonable. That goes for filing status, dependents, and expenses in relation to income. My firm has represented many clients who were audited and in most cases, we could see WHY just by looking at the returns. There would be adding errors, deductions on the wrong lines, deductions on the wrong form, missing forms, and often, messy looking hand written forms.
Also, most of the people who get audited are SELF EMPLOYED who have income and expenses reported on Schedule “C”!
THE MOST AUDITED FORM EVER KNOWN TO THE IRS IS SCHEDULE “C”!
Many people report losses on this schedule from their business, which causes all kinds of RED FLAGS at the IRS.
I suggest that people who are being audited for the form SCHEDULE “C” go through the audit and then try not to file that form in the future. By not filing the form SCHEDULE “C” their chances of being audited in the future drop dramatically. Call us about a better business formation.
People who receive an IRS AUDIT LETTER in the mail asking them to come to or to call for an appointment must know this EXTRA secret.
YOU DON’T HAVE TO GO! YOU DON’T EVEN HAVE TO TALK TO THE AUDITOR
As a matter of fact, going or talking to the auditor yourself is the worst thing you can do. The taxpayer Bill of Rights allows you to be represented by a CPA who can answer questions for you and provide documentation to the IRS. I STRONGLY SUGGEST THIS APPROACH. Many taxpayers attempt to handle their own audit or hire the person who prepared the tax return to handle it for them. The reason this usually does not work out is because most tax return prepares Do Not handle IRS Audits on a regular basis. The IRS can easily intimidate them, which usually results in an unfavorable outcome.
The best way to end an IRS AUDIT with a great out come is TO END IT THE FIRST MEETING. Whenever my firm represents clients in IRS AUDITS we actually perform a trial audit in our office before we ever meet with the IRS. This allows us to know which areas need more documentation or answers. When we meet with the IRS (WITHOUT OUR CLIENT), we can quickly answer the auditor’s questions, provide documents and get to the bottom line. We always meet the IRS at their office or at ours, but NEVER at the client’s.
All check signers on Company Bank Accounts can be Held responsible for Payroll Taxes!
If you are a check signer and a responsible party an the company checking account, it is your responsibility to make sure all Payroll taxes are paid to the IRS on time.
Sometimes businesses get behind on payroll taxes due to cash flow problems. The penalties and interest assessed by the IRS are excessive for this type of delinquency. This problem becomes worse with IRS penalties and interest, and the total amount owed can grow by 50% to 75% in a short period of time.
If the Company is now in cash flow trouble and approaching the DANGER ZONE, it may never be able to pay off the total amount owing. Each check signer may be held personally responsible for the payroll taxes. And we mean EVERYONE of the check signers listed on the bank signature card. This often includes spouses, secretaries, employees, relatives, office managers, or yourself.
Before the Company gets in the Danger Zone, you should get all non-essential signers deleted from the bank signature card.
The IRS takes a very serious approach to collecting delinquent Payroll taxes and may levy or seize company assets in short order. The best advice we can give to you if you find yourself in this situation is NOT to meet with the IRS Revenue Officer who call or comes to the door to collect these taxes. Often, how you answer their first 5-10 questions will determine whether you stay in business and if you of others will become personally responsible for the payroll taxes. One of the most important services we offer our clients is to meet with the IRS ourselves. This always allows our client to concentrate on running the business and improving cash flow.
Don’t meet with an IRS agent yourself. Remember: He knows more than you, and his job is to collect taxes from you.
The IRS has over 148 different types of penalties. And boy do they love to hand them out. The worst part is that the IRS also charges interest and additional penalties on the original penalty.
So you must try to get them reduced or completely abated to zero.
After you decide to make a request to the IRS “Abate Your Penalties” you must decide where and when to make the request. In our experience your chances are better in dealing with the IRS Service Center. The timing of your request depends on the type of penalty assessed against you. It always makes better sense to request penalty abatement before you pay the IRS. Although, if you already paid the bill, it can’t hurt you to ask for a penalty abatement and refund.
These penalties can often be reduced to ZERO if you have “REASONABLE CAUSE”. What makes up “REASONABLE CAUSE” you ask? Well, in our experience in negotiations with the IRS, anything may qualify as long as it’s reasonable.
We’ve seen the IRS abate penalties for medical reasons, bad accountants, ignorance of tax laws, ex-spouses, helping to provide for a loved one, military call-ups, fires, floods, alcoholism, drug abuse death and even for relying on IRS advise.
Penalties can be such a high percentage of the total amount owing to the IRS it usually makes sense to consider requesting the IRS to reduce all penalties to ZERO.
THE TAX SAVINGS COULD BE HUGE.
If you are a small business owner or self-employed and find yourself being audited by the IRS, the Fast Track Settlement or FTS, may be the answer for you.
The IRS SB/SE (Small Business/Self Employed) program allows for most cases that fall under its jurisdiction to be considered for the Fast Track Settlement. It also allows for no dollar limit on the case itself.
The program itself was created to help the relationship between the IRS and the tax payer and will only succeed if all parties go into the process with the common goal of agreeing to a solution. The process allows for tax disputes to be resolved quickly with some business disputes to be solver within 90 days.
THE FTS process is started with both the examiner and the tax payer by filling out a form. The form is then processed by the SB/SE Group Manager. The Manager then decided is the case is eligible and will forward the case on to the local Appeals Manager, along with all necessary paperwork. The Appeals Manager then makes the decision on whether or not to accept the case into the FTS program.
Although representation is not required a tax payer may be represented during this process but the proper paperwork needs to be submitted.
If you are interested in finding out more information in regards to the FTS, please call us today!
Many people do not realize that the IRS charges you a penalty of up to 25% for just filing your tax return late. That’s 25% of what you owe. This includes Individual Tax returns, Payroll Tax returns, or corporate tax returns.
What people don’t know is that you can file ANY tax return on time and Avoid the 25% penalty even if you don’t send in the money, which is owed on the tax return.
Yes, of course you’ll get some ugly mail from the IRS for not sending in the money owed, but so what, you will have avoided a 25% penalty.
We could have saved many people thousands of dollars on penalties if they just knew this one thing. So, in the future, no matter what is going on in your life, file all tax returns on time even if you don’t send the money owed with the return.