venar ayar | TaxConnections

30 Oct 2019

10 Common IRS Notices That You Are Likely To Encounter And What They Mean

No one likes when the IRS reaches out to them. The agency is like that one neighbor you never liked as a kid who never got the hint and just kept coming over. Chances are, he’s gonna call today too. The IRS sends millions of letters each year to taxpayers who, quite frankly, don’t ever want to hear from them. And even though you don’t even want to listen to their voice, they have a whole lot of crucial stuff to say. So strap in and get ready for a somewhat boring but extremely important ride.

So what’s up with these notices then?

Glad you asked. The IRS sends out these reasons for a couple of reasons, some good, some not so good. One of the reasons you got mail from them might be:

The IRS changed your return.
The IRS needs additional information from you.
They have a question about your tax return.
You are due a larger or smaller return.
The IRS needs to verify your identity.
You are being notified of delays in processing your return.

Now, don’t panic once you receive your letter. It’s a treasure trove of information, so make sure you go through it very carefully. Let’s look at ten notices that the IRS might send you.

Written by Venar Ayar | Posted in IRS Notice

22 Oct 2019

The IRS Offer In Compromise – 6 Common Myths And Misconceptions

When people first hear about the IRS Offer in Compromise (OIC) Program, (depending on where they hear about it from), many common misconceptions may come with it. So, I am here to clear up some of the most common myths about the OIC Program

Myth #1 – The OIC Program is a scam or “too good to be true”

There are usually two extremes that people go to when you ask them what they think or know about the OIC program. This myth is on one end of the scale. (We will cover the other extreme in the next section). People often immediately (and falsely) assume that the OIC Program is a scam. I will admit…there are several “tax resolution” companies out there who do use the program to scam innocent people by promising potential clients that they will get them an Offer in Compromise (and settle for pennies on the dollar) before even looking at their financials. While that is all codswallop, the program itself is NOT a scam. The IRS has 10 years to collect a tax debt from a taxpayer. And they certainly do not want to spend that time trying to collect a tax debt that the taxpayer simply cannot pay. They also do not want to cause undue hardship by demanding someone pay their full liability if they cannot afford to do so and still meet their basic living necessities. So, they are willing to work with taxpayers to get at least some of what is owed to them. It makes the most economical sense to the IRS if they ever want to see any of that money.

Written by Venar Ayar | Posted in Offer In Compromise

15 Oct 2019

How To Appeal When You Are Denied CNC Status?

Currently Not Collectible (CNC) status can provide you with temporary relief from tax debt collection efforts by the IRS. However, if you applied for but were denied CNC status, all hope is not lost, as you have the option to appeal this ruling. A tax attorney can be a great ally during this process as appeals are often complex and can take months to complete.

When the IRS first initiates a collection action on your tax debt, such as in the form of a tax lien or a levy on your bank account, you have the option of trying to stop it through an appeal. Appealing a CNC determination is a very similar process. In addition to requesting review of collection actions, you may ask the IRS to review your CNC determination. You may request a Collection Due Process (CDP) hearing, or pursue the Collection Appeals Program (CAP). You might choose the CAP process because it is faster, but bear in mind that the decision is final and cannot be reviewed by the Tax Court.

Written by Venar Ayar | Posted in TaxConnections

10 Oct 2019

How To Qualify For An Offer In Compromise

If you have an outstanding tax debt with the Internal Revenue Service (IRS) but you’re concerned that you are unable to pay it, you may have the option to settle the debt for an amount lower than what you owe. The IRS provides a solution called an Offer in Compromise (OIC) that allows qualifying taxpayers to enter an agreement to pay off their tax liability. An attorney who specializes in tax debt relief can assist you with applying for this tax debt relief program.

The guidelines for qualifying for an Offer in Compromise are somewhat strict but certainly straightforward. First, your reasons for applying must be one of the following:

Doubt as to Liability – If the IRS has reason to believe that the amount of your tax debt is incorrect, this would be considered doubt as to liability.
Doubt as to Collectibility – When the IRS doubts that it would be able to collect the full amount of the taxpayer’s debt, it may accept an Offer in Compromise. This is often the case if the amount of the taxpayer’s income and assets is lower than the amount of the liability.
Effective Tax Administration – The IRS may also accept an Offer in Compromise if paying the tax debt would create a financial hardship for the taxpayer or if collecting the tax debt would be unfair or inequitable.

Written by Venar Ayar | Posted in Offer In Compromise

09 Oct 2019

What Is The IRS Streamlined Program?

U.S. law requires that all taxpayers pay taxes on any foreign income or assets they have. This extends to anyone who is required to file taxes in the United States; it is not limited to U.S. citizens. Many people are not aware of this and subsequently fail to file and pay taxes on their foreign income or assets. Any taxpayer that fails to file legally required tax returns can face severe penalties including, among others, “failure to file” which can require the taxpayer to pay a 25% tax penalty or “failure to report foreign bank and financial accounts” which result in a civil fine of anywhere from $10,000 to $100,000. Foreign assets that must be filed and reported include, but are not limited to:

Financial accounts held at foreign financial institutions
Financial accounts held at a foreign branch of U.S. financial institution
Foreign stock or securities not held in a financial account
Foreign mutual funds
Foreign hedge funds and foreign private equity funds.

Written by Venar Ayar | Posted in IRS Streamlined Program • TaxConnections

01 Oct 2019

How Much Will The Streamlined Procedures Penalty Cost?

The miscellaneous offshore penalty under the Streamlined Procedures is five percent of the highest aggregate account balance during the disclosure period. A number of factors can influence exactly how this penalty will be calculated in your case.

Asset Balances That Are Counted

The balances in all of your foreign financial accounts will generally be counted for the penalty calculation. The year-end balances will be reviewed and the highest aggregate balance will be used to determine your penalty amount.

Any asset that should have been reported will count for these purposes. Even if assets were reported on an FBAR, but the income from these accounts wasn’t reported on your tax return, they will also be counted for the penalty calculation.

Simply find the highest aggregate account balance and multiply it by five percent to determine your penalty amount under the Streamlined Procedures. This is the penalty that applies to domestic taxpayers.

Written by Venar Ayar | Posted in Tax Penalties

24 Sep 2019

How Do I File An IRS Offer In Compromise?

As Ben Franklin once said, “In this world, nothing can be said to be certain, except death and taxes.” If you owe a tax debt to IRS, it can be a frightening experience. The IRS has the power to seize and sell your property, place a lien on your property, garnish wages, or even take money straight out of your bank account. If you owe a tax debt to the IRS it is critical that you reach a resolution as quickly as possible, and hopefully, one that is as beneficial to you as possible. For some people, the best option for a solution is the IRS Offer in Compromise (OIC) program. This article will explain what the OIC program is and how to file an OIC.

What is the OIC Program?

The IRS OIC program is a settlement agreement between a taxpayer that owes a tax debt (this includes both individual taxpayers and businesses) and the IRS, that allows for the taxpayer to resolve their tax dispute for less than the full tax debt amount owed. If a taxpayer qualifies for the OIC program they can make a monetary offer to the IRS for a full settlement of their dispute, which the IRS will ultimately accept or reject.

Written by Venar Ayar | Posted in Offer In Compromise

18 Sep 2019

How To Appeal The Filing Of An IRS Tax Lien

You may appeal the filing of an IRS tax lien on your property using either the Collection Due Process (CDP) hearing or the Collection Appeals Program (CAP). Each program has slightly different requirements, so discuss your case with a tax attorney to determine which appeal method best fits your situation.

CDP Hearings

You only have the right to request a CDP hearing if you receive certain notices from the IRS. One of these is the Notice of Federal Tax Lien Filing.

The IRS must notify you of the lien filing within 5 days. You then have 30 days to request your CDP hearing. You lose some of your appeal rights if you miss this deadline.

Written by Venar Ayar | Posted in Appeal IRS Tax Lien

17 Sep 2019

How To Get Rid Of An IRS Tax Lien

IRS tax liens interfere with your ability to sell or borrow against your property. If you need to get around the tax lien, you have several options at your disposal.

First and foremost, you can eliminate the lien by paying your tax bill in full. However, this may be unrealistic if you owe $25,000, $50,000, or $100,000 to the IRS. In these cases, you’ll need to consider your other options.

Tax Lien Withdrawals

A lien withdrawal completely removes the tax lien from public records. The IRS will only agree to withdraw the lien in specific circumstances.

First, the IRS should withdraw the lien if it was filed prematurely or in violation of IRS procedures. This reason could apply if the IRS failed to send you the correct notices or made some type of clerical error.

Written by Venar Ayar | Posted in IRS Tax Lien

05 Sep 2019

What Is Required To Use The Streamlined Compliance Procedures?

Venar Ayar Streamlined Compliance Filing Procedures

The Streamlined Procedures offer a cost-effective method of disclosing unreported offshore accounts for many taxpayers. The penalties are generally much lower than those required under the Offshore Disclosure Program, but there are several requirements a taxpayer must meet to qualify for the Streamlined Procedures.

You Must Have Filed Your Last Three Tax Returns

Unfiled tax returns can disqualify you from using the Streamlined Procedures. If required to file, you must have filed a return for each of the past three years.

Unfiled tax returns can also cause many other problems with the IRS. If you haven’t filed your returns, you may need to talk to a tax attorney about your options.

Written by Venar Ayar | Posted in Streamlined Compliance Filing Procedures

23 Aug 2019

Why You Should Request A Collection Due Process Hearing

The Collection Due Process (CDP) hearing is one of the most important rights given to taxpayers. It’s your final opportunity to stop an IRS levy of your assets or the filing of a federal tax lien against your property.

Requesting The CDP Hearing

The IRS is only required to give you a CDP hearing if you request it. You should receive a Notice of Intent to Levy in the mail which explains your CDP rights. The IRS can only seize your assets without sending this notice in rare cases, such as when collection of the tax is at risk.

The notice will tell you that you have 30 days to request a CDP hearing. You need to request the hearing in writing and by the deadline.

If you miss the deadline, you may receive what is known as an equivalent hearing, but you will lose some important rights.

Written by Venar Ayar | Posted in TaxConnections

20 Aug 2019

5 Ways To Stop Internal Revenue Service Wage Garnishment

The IRS can be quite resourceful when it comes to collecting what they are owed. This allows them to even access and retrieve money from your salary to settle your tax debt. When it gets to this point one can feel confused and even financially invaded but this is only a last resort of the IRS. This is after they have exhausted other approaches, which include sending several letters with no satisfactory response from the taxpayer. Accessing your paycheck and retrieving an amount from your salary to settle your owed taxes is what IRS garnishment is all about.

This reclamation of one’s wages could extend to up to 70 percent but it can be avoided. The easiest way to avoid IRS garnishment is through paying your taxes diligently and on time. But what happens when you have already crossed that line? The following are five ways to stop IRS garnishment so that you are not left with barely anything to survive on due to tax debts.

Written by Venar Ayar | Posted in TaxConnections