525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Do You Owe the IRS Money That You Can’t Pay? Are You a Year or More Behind in Filing Your Income Tax Returns? Are You Behind in Your Payroll Tax Filings or Payments? Our Tax Relief services and Tax Resolution assistance can help you get tax relief!
Monday, July 22, 2024
Friday, July 19, 2024
Colorado Springs: How do I qualify for an IRS Installment Agreement?
If you owe the IRS a large tax debt that you are unable to pay in full, the notices and prospect of the IRS coming after you can be intimidating. What can you do if do owe the IRS a large sum that you are unable to pay in full? Should you just ignore the IRS? Or, is there an option available for you to sleep well at night and get peace of mind?
Under Section 6331 the IRS can help you with by setting up an installment agreement. The installment agreement will help you to mange your tax obligation. You will be allowed to pay over time in order to get caught up with your tax obligations. How can a taxpayer qualify for an installment agreement?
If the specific requirements are not meant, the IRS will not even consider or allow a taxpayer to start an installment agreement. First, a taxpayer must be tax compliant. This means that all all required tax returns must be filed. The amount you owe is also important. Is an installment agreement best for you? It may or may not be, depending on your facts and circumstances.
Working with a tax professional who will do an analysis of your situation is highly recommended to determine if the installment agreement or possibly an offer in compromise is better for you.
If an installment agreement is the way to go then I recommend enrolling in a Direct Debit Installment Agreement (DDIA). This ensures timely payments directly from your bank account, reducing the risk of default. The monthly payment amount must settle the debt within 72 months or before the Collection Statute Expiration Date, whichever comes sooner.
Depending on the size of the amount owed, you may qualify for a Streamlined Installment Agreement. With this type of installment plan there are no forms required and no documents needing to be submitted. You are automatically accepted. For certain large amounts owed you will need to complete forms and submit documents. Working with a tax professional who can analyze your situation, will walk you through the process and make simple for you to resolve your tax debt and avoid further collection actions.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Tuesday, July 16, 2024
Colorado Springs: Can I Really Settle My Tax Debt for Pennies on the Dollar?
The simple answer to the question in title of this blog is "maybe". Why do I say that?
The IRS provides a lifeline for those who either cannot pay or who doubt they actually owe the tax through the Offer in Compromise (OIC)
program, governed by Section 7122 of the Internal Revenue Code. This
program allows taxpayers to settle their tax liabilities for less than
the full amount owed for those who qualify. Taxpayers have to be patient as this process can take at least a year to complete.
To qualify for an OIC a taxpayer must calculate their RCP using guidelines provided by the IRS that include both actual expenses and nation standards. Once RCP is calculated the determination is made whether a taxpayer qualifies for the OIC or has to set up an installment agreement and full pay.
I recently completed a case that took over a year for the IRS to send us the OIC acceptance letter. The taxpayer was unable to pay the tax in full after calculating the RCP. This was a doubt as to collectibility offer. We were able to settle an $80,000 plus debt for $100. The taxpayer has two responsibilites now: 1) To make the $100 payment and 2) Stay tax compliant for the next five years, including making estimated tax payments if required. If these two conditions are not met, the taxpayer can become liable once again for $80,000 tax debt.
We cannot settle every case for such a small amount. Each taxpayer's facts and circumstances are unique. Only a full analysis of your situation can determine what the best course of action will be. Using a local Enrolled Agent(EA), CPA, or tax attorney who will complete such an analysis is highly recommended.
Section 7122 on Offer in Compromise is a valuable tool for taxpayers in distress. However, this path requires careful preparation and a clear understanding of the obligations involved. Consulting with a tax professional can enhance the chances of a successful application.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Thursday, July 11, 2024
Colorado Springs: What is an IRS Tax Levy? What is the Purpose
What would lead to the IRS to levy your bank accounts or other property? The legal seizure of your accounts or property is an extreme measure the IRS could take to satisfy a tax debt. If you have been ignoring the IRS when it comes to filing tax returns or making payments on your taxes, this extreme measure may be used to get your attention. Nothing will quite get your attention as your bank stating that your accounts are essentially frozen due to an IRS levy.
How many letters did you receive from the IRS? If you failed to open the letters and respond to the IRS, the levy process most typically begins with the IRS assessing the and sending a Notice and Demand for Payment. With no payment made or contact initiated to the IRS, the next notice possibly sent through certified mail, is a Final Notice of Intent to Levy and Notice of Your Right to a hearing at least 30 days before the levy action.
Most commonly I have heard of bank accounts being subject to an IRS levy. I some cases the frozen funds can be made available for you the taxpayer. Each taxpayer's circumstances are unique.
The best solution for an IRS levy is to never get an IRS levy. Stay compliant and make your tax payments in a timely manner.
However, if you do receive a levy notice taking quick action is highly advised. I recommend you do any or all of the following:
- Hire a tax professional (EA, CPA, or Tax Attorney) to assist you through this process
- Collect documents and records to build your case
- Request a Collection Due Process hearing or
- Prepare to make a payment in full, arrange a payment schedule, or if qualified file for an offer in compromise.
Ignoring a tax levy can lead to severe financial consequences. Immediately working to resolve the issue with a tax professional will help you quickly resolve the issue. As you work with a tax professional toward a resolution, you will be able to sleep better an minimize the impact on your financial well-being.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Wednesday, July 10, 2024
Colorado Springs: Am I or Am I Not an Innocent Spouse?
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Tuesday, July 9, 2024
Colorado Springs: Why Did the IRS File a Lien on My Assets?
How would you answer the following questions:
- Did you fail to file your tax return?
- Did you fail to pay your tax full?
- Or, did you fail to arrange to make payments on your taxes if you were unable to pay in full?
If you answered "yes" to any or all of the above questions and you owe the IRS more than $10,000, then that is probably why you received the notice of an income lien on your assets. What makes it possible for the IRS to file a lien. Under the Internal Revenue Code Section 6321, the IRS has the authority to protect the governments interests by filing lien. When a lien a placed, the IRS then has a legal claim to your property when you neglect or fail to pay your tax.
Three conditions must be met for a tax lien to attach to your property:
- The IRS assess your tax liability of $10,000 or more.
- The IRS sends you a bill explaining how much you owe.
- You either neglect to make payment or refuse to pay in full within 10 days
After each of these conditions is satisfied, the lien attaches to all your assets including real estate, personal property, and financial assets.
An IRS tax can have a significant impart on your credit score. Thus, you may find it more challenging to qualify for loans or credit. If you want to sell or refinance your home, an IRS tax lien will make it more challenging to accomplish, but not impossible. With the tax lien the government has an interest in your property as security for the tax debt.
In what ways can you address a tax lien:
- Pay the debt in full
- Request a payment plan, which the IRS may agree to and withdrawal the lien
- You may qualify for lien subordination, to allow other creditors to move ahead of the IRS
If facing an IRS tax lien, prompt action is necessary. I recommend consulting with a tax professional who can provide you with the needed guidance to resolve this issue as quickly as possible after they take a complete look at all your facts and circumstances.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Monday, July 8, 2024
Thursday, July 4, 2024
Colorado Springs: What Exactly is the IRS Collections Process?
How many of us desire to be contacted by a collection agency? I would say none of us want to be contacted by a collection agency, especially if the collection agency is the Internal Revenue Service. If we failed to file an income tax return and/or failed to pay our income taxes you can count on getting the series requesting payment of your taxes.
Why is it important to still file my tax return, even if I cannot pay the tax? One reason is that you want to start the statute of limitations on your tax return and the payment of your taxes. If you do not file your tax return, then the statute has not started and essentially you give the IRS a longer period of time to collect the taxes due.
Under IRS Code Section 6502, the IRS has ten years from the date of assessment to collect outstanding tax liabilities. This why it is important to file your return and to start the 10 year clock. For example, if you wait three years to file than you just gave the IRS an extra 3 year to collect from you. Under some circumstance this period can be extended. Also, if the IRS does not collect the debt within this 10 year period, the liability is typically no longer enforceable.
The IRS Collection Process begins when a taxpayer fails to pay their tax bill. Initially, the IRS sends a series of notices and demands for payment. If the taxpayer does not respond or set up an installment agreement, the IRS can take more aggressive actions. Some of the options include liens on property, levying bank accounts, or garnishing wages.
Taxpayers have a right to have an Enrolled Agent (EA) represent them though this process. An EA can help the taxpayer to setup an installment agreement, prepare an offer in compromise, or speak to the IRS on the taxpayer's behalf.
Having a tax professional help you during the collection process is vital for you to understand the processes and timelines. An EA will help you to be informed and to mitigate the impact of IRS collection efforts.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Wednesday, July 3, 2024
Colorado Springs: Can I Appeal This IRS Collections Notice?
Few pieces of mail cause as much stress as a certified letter with the Internal Revenue Service in the return address area. Then, when you open the letter you see a large balance due that you did not expect. What can you do to navigate this challenging situation?
1. Hire a tax professional: An Enrolled Agent (EA) can represent you before the IRS, review your tax records, and provide expert guidance on how navigate the appeals process
2. Understand the Notice: An Enrolled Agent will carefully read the collections notice and help you to understand the amount owed, the reasons behind it, and the deadline for responding, which is crucial to avoid further penalties.
3. Gather Documentation: An EA will help you to identify the relevant documents, including tax returns, payment records, and any correspondence with the IRS. The proper documentation is essential to building a case with the IRS.
4. File a Written Protest: After careful review of all the information and if you disagree with the notice, an EA will prepare to file a written protest. The protest will clearly state the reasons for disagreement and provide supporting evidence. The more comprehensive the protest the better. Make sure the protest is timely filed.
5. If Needed, Request an Appeals Conference: An EA can represent you in an appeal conference. The IRS Independent Office of Appeals operates separately from the collections division and aims to resolve disputes impartially. During the conference, your EA will present your case and any additional evidence.
6. Explore Alternative Solutions: If appealing the notice is not feasible, explore other options like installment agreements or an offer in compromise, which allows you to settle your tax debt for less than the full amount owed.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
Tuesday, July 2, 2024
Colorado Springs: What If My Colorado Income Taxes are Unpaid and Not Filed?
Many times when taxpayers are behind on their federal taxes, they are also behind on their state taxes. When it comes to tax collections and notices, the Colorado Department of Revenue can be more aggressive than the IRS. What is the best action for a taxpayer to take when both the IRS and the Colorado Department of Revenue are owed large sums? You need to promptly address the issue
To start you will need to prepare the federal return first, because information from the federal return is use in calculating the Colorado tax return. Depending on your circumstances, you may file the Colorado return before filing the federal tax return. This determination is made on a case by case basis.
If you owe tax the Colorado Department of Revenue will assess penalties and interest on the tax. You can calculate the interest and penalties with the tax on the return and include with the payment. If you are unable to make the full payment, submit the tax return anyway. The Colorado Department of Revenue will process the return and send you balance due notice.
After the tax, interest, and penalties have been assessed you can make a payment by check, money order, or online. If you are unable to pay in full, you can setup a payment plan by following the Colorado Department of Revenue guidelines. In some cases setting up a state payment plan is to your advantage if you also owe federal income tax. This is why I mentioned earlier the possibility of filing the Colorado income tax return before filing the federal income tax return.
525 N Cascade Ave., Suite 200
Colorado Springs, CO 80903
(719) 359-8789
success@cashtracksfinancial.com
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