We are aggressive and proactive in cutting your taxes
What to do if the IRS is after your money?
Getting out from under tax debt can be overwhelming and frustrating. You are not alone! We can help you.
One thing is certain—the problem will not go away! If you don’t own the problem and deal with it, it will own you. The choice is yours?
There are important things to know about IRS programs to get relief, to get out from under tax debt.
Important Things to Know
Taxpayer Bill of Rights
The Right to Be Informed
The Right to Quality Service
The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
The Right to Appeal an IRS Decision in an Independent Forum
The Right to Finality
The Right to Privacy
The Right to Confidentiality
The Right to Retain Representation
The Right to a Fair and Just Tax System
Important Things to Know
Taxpayer Bill of Rights
The Right to Be Informed
The Right to Quality Service
The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
The Right to Appeal an IRS Decision in an Independent Forum
The Right to Finality
The Right to Privacy
The Right to Confidentiality
The Right to Retain Representation
The Right to a Fair and Just Tax System
We are aggressive and proactive in cutting your taxes
Your Right to Representation
You can have a representative deal with the IRS for you. You need not talk to the IRS after you file a Power of Attorney and Declaration of Representative (form 2848) with them. As soon as your representative files form 2848 with the IRS, your representative deals with the IRS for you.
Your appeal rights and the right to have hearings
Know when and how to elevate your case. The IRS is a giant bureaucracy and like every bureaucracy everyone has a supervisor, and every supervisor has a supervisor. And there are various opportunities to appeal IRS actions or inactions to other departments and to have hearings to present evidence to promote your interests. The final level of appeal is to the courts.
I think of this as elevating the case. Taking the issue to another level if you have run into the rouge IRS agent from hell. The IRS comprises people and people make mistakes and have bad days. IRS employees sometimes do not do what they are supposed to. Also, the rules are complex, and the IRS employees do not always know them.
IRS actions are overruled often so you need to know how and when to elevate the matter to a higher level. You need to hold their feet to the fire. The higher up IRS employees are the more knowledgeable they have more authority to settle your case. Appeals officers have authority to consider the ‘hazards of litigation’ while the lower-level audit and collection employees do not. This is an art as much as it is a
science.
Bankruptcy
While this is not be done through the IRS—it is done through the bankruptcy court—it is important to know that some taxes can be wiped out in bankruptcy. The rules are complex, and planning can help to make sure the maximum amount of tax is wiped out.
Liens and Levies
A lien and a levy are two mechanisms used by the IRS to collect unpaid taxes.
A lien is where the IRS files a public notice in the county or state of the taxpayer’s home or where
they own property declaring that a taxpayer owes taxes. This public notice is picked up by credit
reporting agencies and can ruin a taxpayer's credit.
A levy is the actual taking of someone’s property by the IRS to satisfy unpaid tax debt. The IRS
can levy things such as bank accounts, wages, social security benefits, real estate, vehicles, or
other personal property. A levy can be removed if it is causing a financial hardship, if you apply for
a payment plan, or submit an Offer in Compromise.
Unpaid Payroll Taxes
When payroll taxes are not paid over to the government the IRS can collect from the business or assess a Trust Fund Recovery Penalty’ against responsible parties—those responsible for paying over the taxes to the government. The ‘Trust Fund Recovery Penalty’ is only used to collect those taxes withheld from employees. With planning the taxes assessed through the ‘Trust Fund Recovery Penalty’ can be reduced or eliminated. Payroll taxes may be discharged through bankruptcy.
Non-filers
According to the IRS about 7 million U.S. taxpayers do not file their tax returns each year. The IRS has time limits for when they can do certain things: they have either three or six years to audit a tax return and ten years to collect tax. These time-period limitations are called ‘statutes of limitation’. The statute of limitation to audit a tax return is triggered when the tax return is filed. So, if a tax return is never filed there is no time limit on when the IRS can do an audit.
If a taxpayer does not file a tax return, the IRS can do it for them. The tax return the IRS prepares is called a ‘Substitute for return’ (SFR). The SFR is prepared from tax information reports filed with the IRS with a minimum of deductions. The tax on the SFR is usually higher than the tax that the taxpayer would show if they filed the tax return.
The IRS will not accept an installment agreement or an Offer in Compromise unless the taxpayer is current on their tax filing obligations. The IRS has a policy statement that says a taxpayer is current if they have filed the last six years of tax returns.
The IRS generally has only ten years to collect tax.
IRS Programs to Settle Your Tax Debt
The IRS generally has only ten years to collect tax. However, this ten-year period is suspended in various
situations.
Installment Agreements
If you're unable to pay your tax debt in full, the IRS provides the option of an installment agreement. This lets taxpayers make manageable monthly payments towards their debt.
Offer in Compromise
The IRS might accept an offer to settle your tax debt for less than the amount they claim is owed. This requires an analysis of the taxpayers’ financial situation. The taxpayer must stay compliant with the tax laws for five years after the acceptance of the Offer in Compromise or the IRS can consider the OIC to be in default in which case the IRS will reinstate the original tax debt along with penalties and interest.
Partial Pay Installment Agreement
This is where the IRS accepts installment payments for the remaining time of the ten-year collection period that will not pay off the total tax they claim is owed.
Temporary Collection Delay
For taxpayers facing financial hardship, the IRS might temporarily delay collection efforts by putting the taxpayer in Currently Not Collectible status. While this doesn't eliminate the tax debt, it provides temporary relief from collection activities.
Penalty Abatement
There are ways to remove penalties. For example, if you can provide reasonable cause for not filing or paying taxes on time, the IRS may remove the penalties. Each request is carefully evaluated based on its
individual merits.
Innocent Spouse Relief
Where one spouse is responsible for the tax debt, the other might qualify for Innocent Spouse Relief. By getting Innocent Spouse Relief a spouse who wasn't involved in the financial misstep need not pay.
Taxpayer Assistance Order
Sometimes IRS employees ignore the rules. To deal with this situation the Taxpayer Advocate’s Office was created. It is a separate and independent office within the IRS. Its role is to help taxpayers to resolve
problems with the IRS that cannot be resolved through normal channels. The Taxpayer Advocate’s office
can issue a ‘Taxpayer Assistance Order’ requiring IRS employees to follow the rules.
The IRS generally has only ten years to collect tax.
IRS Programs to Settle Your Tax Debt
The IRS generally has only ten years to collect tax. However, this ten-year period is suspended in various situations.
Installment Agreements
If you're unable to pay your tax debt in full, the IRS provides the option of an installment agreement. This lets taxpayers make manageable monthly payments towards their debt.
Offer in Compromise
The IRS might accept an offer to settle your tax debt for less than the amount they claim is owed. This requires an analysis of the taxpayers’ financial situation. The taxpayer must stay compliant with the tax laws for five years after the acceptance of the Offer in Compromise or the IRS can consider the OIC to be in default in which case the IRS will reinstate the original tax debt along with penalties and interest.
Partial Pay Installment Agreement
This is where the IRS accepts installment payments for the remaining time of the ten-year collection period that will not pay off the total tax they claim is owed.
Temporary Collection Delay
For taxpayers facing financial hardship, the IRS might temporarily delay collection efforts by putting the taxpayer in Currently Not Collectible status. While this doesn't eliminate the tax debt, it provides temporary relief from collection activities.
Penalty Abatement
There are ways to remove penalties. For example, if you can provide reasonable cause for not filing or paying taxes on time, the IRS may remove the penalties. Each request is carefully evaluated based on its
individual merits.
Innocent Spouse Relief
Where one spouse is responsible for the tax debt, the other might qualify for Innocent Spouse Relief. By getting Innocent Spouse Relief a spouse who wasn't involved in the financial misstep need not pay.
Taxpayer Assistance Order
Sometimes IRS employees ignore the rules. To deal with this situation the Taxpayer Advocate’s Office was created. It is a separate and independent office within the IRS. Its role is to help taxpayers to resolve problems with the IRS that cannot be resolved through normal channels. The Taxpayer Advocate’s office can issue a ‘Taxpayer Assistance Order’ requiring IRS employees to follow the rules.
TESTIMONIALS
People Are Saying
Matt Chapman
Owner Chapman Digital Motion Pictures Hayward, CA
My wife and I used to use H&R Block to do our taxes. When we had Fred Thompson do our taxes for the first time, we were shocked to find out how much we had been missing out on in deductions prior to working with him. Now six years
later, I would work with no one else. Not only is he a good tax accountant, but also skilled in the advice of business-related issues pertaining to helping the bottom line. Would I recommend Frederick A. Thompson as the CPA for you? You bet.....in a New York minute!
Gary Massa
Tucson, Arizona
I owned a graphic design business in San Francisco for several years. Over that time Fred has helped me to deal with many difficult business and tax issues. I feel that he keeps informed of the year-to-year changes in tax laws. This was very important when most recently Fred helped me deal with some complex tax issues that came up when I did a like-kind exchange of a rental property.”
Wayne A. McFadden
Attorney at Law
San Mateo, CA
I have worked with Fred for several years. He has gone out of his way to find ways to reduce my taxes, and he has prepared some very complex tax returns for me. Fred also represented me when I was audited by the Internal Revenue Service. He helped me successfully object to an unreasonable IRS assessment. He stood by me
in negotiations with the Internal Revenue Service and successfully testified before the United States Tax Court.
