Don’t wait any longer let a CTG tax professional secure a tax compliance program for you.
As if dealing with crippling credit card debt wasn’t enough, approximately 20 million Americans have a tax liability and require the help of a tax professional.
The reason why many of these individuals need a tax professional is because, if forced to pay the entire tax liability, they would most likely be pushed into bankruptcy. Rather than succumb to the collection methods of the IRS/State and jeopardize your financial future, it is a viable option to hire an experienced tax professional and possibly settle a significant portion of the tax liability.
By hiring the experienced tax professionals at Crest Tax Group to resolve your tax situation, tax debt can become a think of the past. In order to settle your tax liability and protect yourself from IRS/State bank and wage levies, property liens or frozen assets, often times the involvement of a tax professional becomes a necessity.
To resolve back tax debt, our tax professionals will represent your best interests while negotiating with the IRS/State. They have a number of options to facilitate a settlement, either through enrolling the client in an Offer in Compromise program or setting up an appropriate and affordable payment plan that suits your income.
In addition to experienced tax professionals, Crest Tax Group will assign a professional case manager that’s work hand and hand with your assigned Tax Attorney or Enrolled Agent to assist you through the process of your case. They will inform you of the required steps, notify you when action is required and oversee the case from beginning to end. At Crest Tax Group, it is our philosophy that informed clients make the best clients and we will do everything in our power to assist you at every step of this difficult process.
You generate tax problems when you don't file your income tax returns with the IRS/State. After ignoring many notices to file a tax return, the IRS/state will ultimately prepare one for you, called a Substitute for Return (SFR).
The IRS/State uses income that has been reported to them, such as wages, interest income, subcontractor payments, sale of property, etc., and then assumes you are single, have no dependents, and uses the standard deduction.
Now you have a tax bill or a larger tax bill than expected, even though you didn't actually file a tax return. You also have created other problems. You can't get an installment agreement without filing the missing returns, even the SFR's. You can't submit an Offer in Compromise if there are missing returns. Bankruptcy won't clear off old years if those returns were not filed by you. And the IRS/State will continue to try to collect on the SFR billings.
While there are many reasons why a taxpayer may not file a tax return, you need to be aware of the following:
- The IRS may file "SFR" (Substitute for Return) Tax Returns for you. This is when you fail to file a return and the IRS/State does so for you.
- Because SFR returns are filed in the best interest of the government, the only deductions you'll see are standard deductions and one personal exemption.
- You will not get credit for deductions to which you may be entitled, such as exemptions for spouses, children, interest and taxes on your home, cost of any stock or real estate sales, and business expenses, etc.
- Failure to file tax returns may be construed as a criminal act by the IRS/State.
- This type of criminal act is punishable by one year in jail for each year not filed.
- Needless to say, it's one thing to owe the IRS/State money, but another thing to potentially lose your freedom for failure to file a tax return.
How Crest Tax Group Can Help
It is in your best interest to have your tax returns --- both personal and business --- prepared and filed on time, each and every year. Even if you are currently behind on filing tax returns from previous years, Crest Tax Group can help. Sooner or later, the IRS will discover your filing delinquency. The penalties and interest the IRS will assess due to unfiled tax returns and the corresponding unpaid taxes will quickly turn your tax situation into a nightmare. Left unresolved, the IRS will take very aggressive measures to collect any unpaid taxes, including garnishing your wages or issuing levies against your bank account or Social Security benefits.
If you are a business owner with employees, you are required to file and pay payroll taxes. Failure to properly file your payroll tax returns and deposit your payroll taxes on a timely basis will not go unnoticed by the IRS or the State. The IRS assigns a higher priority to collecting unpaid payroll taxes than they do even to collecting back income tax debt. The penalties assessed on delinquent payroll tax deposits or filings can be stiff, and can dramatically increase the total amount owed in a very short period of time. And, if payroll taxes go unpaid, the IRS can and will go after a company’s assets, put the company in financial jeopardy, and, in some cases, hold the business owner personally liable for the debt.
Paying Payroll Taxes
The IRS requires businesses to withhold Federal Income Tax, Social Security and Medicare taxes from their employees' wages, the amount of which depends on the employees’ Form W-4’s. These IRS payroll taxes are to be paid on a quarterly basis: March, June, September, and December (Form 941). Under certain circumstances, however, some small business owners may be eligible to file these taxes on an annual basis. The deposits of payroll taxes can be made to the IRS electronically or by taking the deposit to an authorized financial institution. The IRS determines how often deposits are to be made, and they update these requirements each year, based on the annual payroll.
Sometimes, a small business owner is simply unaware of the filing requirements and may become delinquent in their quarterly filings and/or deposit of their payroll taxes. For many businesses, financial problems can cause payroll taxes to not be paid on time and the payroll returns not filed on time. Both of these are among the worst things to do when business has fallen upon hard times. Though most business owners never intend to use the funds they have collected for payroll tax withholding (that they are holding “in trust” for the IRS), sometimes, when faced with the difficult choice of not making payroll or some other pressing business obligation, some business owners feel they have no choice but to use these funds to cover their operating expenses.
Payroll Tax Delinquency
When a business owes back payroll taxes, the IRS can and will be very aggressive in its collection efforts. If a business fails to pay the payroll taxes on time, penalties and interest start to accrue. If the payroll returns are not filed on time the penalties are substantially increased. Failure to file a return on time can incur penalties of 5% per month to a maximum of 25%. Add in other penalties and compounding interest and you have a tax problem that will quickly go from bad to worse.
Should the unpaid payroll tax problem not be resolved quickly, additional IRS Enforced Collection tactics can include wage garnishment, bank levies and seizure of business assets, including accounts receivable, equipment, and automobiles. The IRS can also close a business for non-payment of payroll taxes. And, even if the business is closed or files for bankruptcy protection, the IRS will look to the owner of the business for collection of the penalties, interest, taxes and trust funds. In the case of a corporation or partnership, the IRS will look to the person responsible for paying the payroll taxes to collect the trust funds. This is known as the Trust Fund Recovery Penalty.
How Crest Tax Group Can Help
If your business owes back IRS payroll taxes, it is very important to take immediate steps to deal with the payroll tax problems or you may quickly find yourself out of business. The best advice is to seek out professional tax representation to represent you with the IRS. You may want to avoid meeting with any IRS/State agents until you have met with a professional to discuss your options.
The tax professionals at Crest Tax Group are ready to work with you to design a plan for paying those taxes and negotiating with the IRS so you don't get hit with a bank levy or tax lien. Don't wait any longer!
When you fail to pay your taxes on a timely basis, it can result in IRS penalties, and in turn, compounding interest that can make your tax debt into a much larger and overwhelming amount. Continued non-payment of this back tax debt can then result in additional IRS penalties and interest, a levy on your wages or bank account, a lien against your property, or even a seizure of your assets.
IRS penalties can be applied for filing your tax return late or for paying your due tax late. The IRS penalty for filing late is generally 5% each month, or partial month, and can be up to 25% of the amount due on your tax return. The IRS penalty for paying late is 0.5% per month, up to 25% of the unpaid amount that is due.
How Crest Tax Group Can Help
There are some situations and circumstances in which you can have your IRS penalties abated or reduced or eradicated for a particular tax year or multiple tax years. To submit this abatement request to the IRS, a taxpayer must have reasonable cause that is specific for each year and must be able to explain why the penalties should be removed.
In fact, there are six main reasons the IRS will accept an abatement of IRS penalties. They include:
- Death or serious illness of the taxpayer or member of his/her immediate family. In the case of a corporation, estate, trust, etc., the death or serious illness must have been of an individual having sole authority to execute the return or make the deposit or payment or a member of such individual's immediate family.
- In the case of the unavoidable absence of the taxpayer, a corporation, estate, trust, etc., the absence must have been of an individual having sole authority to execute the return or make the deposit or payment.
- Destruction by fire or other casualty of the taxpayer's place of business or business records.
- The taxpayer was unable to determine amount of deposit or tax due for reasons beyond the taxpayer's control. However, this cause will be acceptable for taxpayer's required to make deposits or payments of trust fund taxes only when the taxpayer was unable to have access to his/her own records.
- The facts indicate that the taxpayer's ability to make deposits or payments has been materially impaired by civil disturbances.
- Lack of funds is an acceptable reasonable cause for failure to pay any tax or make a deposit under the Federal Tax Deposit System only when a taxpayer can demonstrate the lack of funds occurred despite the exercise of ordinary business care and prudence.
If you fit into one of these categories, Crest Tax Group may be able to help you stop the cycle of compounding IRS interest and penalties. Dependent on your individual financial circumstances, we may be able to negotiate an Abatement of IRS penalties for you.
The IRS and State Taxing Authorities have the power to collect back taxes by levying on taxpayers' property as a result of a Tax Lien. When a person owes back taxes, the IRS/State can file a lien on a particular taxpayer’s assets after meeting certain statutory requirements, which attaches to all rights, title and interest of the taxpayer. Once the IRS/State has a lien on all of a taxpayer's assets, they may enforce it by administratively levying his/her assets. The issuance of a tax levy can result in the actual seizure of financial assets, such as wages, bank accounts or accounts receivable or the seizure of real and personal property such as a house, a car, or a boat (which the IRS/State can, in turn, sell to collect the owed funds)
Bank Levy: A bank levy is one form of Enforced Collection that the IRS/State can use to collect back taxes. If the IRS/State issues a bank levy, your bank is forced to freeze any and all of your accounts and all the funds therein. The bank must hold your funds frozen for 21 days, at the end of which, if the tax debt is not resolved, the money is transferred to the IRS/State. This type of levy is a “one shot” levy, insofar as it does not affect future deposits made into your account; however, the IRS/State may issue another bank levy.
Wage Levy (Wage Garnishment): A wage levy, or wage garnishment, is another type of IRS tax levy. As a collection tactic, the IRS/State often imposes a wage garnishment, which means that they literally take money out of every paycheck – often seriously jeopardizing an individual’s standard of living. Once the IRS files a wage garnishment with an employer, the employer will be legally required to begin withholding funds from the employee’s paycheck. This withholding can be as much as 35-70% of the taxpayer’s net take-home pay. This kind of levy is a “continuous” levy because the employer will continue to withhold money from each paycheck until the IRS/State notifies the employer that the levy has been released.
With much more at stake, it is even more critical to protect your business assets. As is generally true of any situation with greater stakes, it is even more challenging to protect the interests of your business, so it is important to know when to ask for help.
How Crest Tax Group Can Help
Through qualified tax compliance programs, Crest Tax Group strives to resolve a taxpayer’s liability, possibly reduce or eliminate penalties, and bring back financial peace of mind. While results vary depending on each client's financial qualifications, our team of Enrolled Agents and Tax Attorneys have the experience to properly service the situation to reduce the damage to you, your finances, and your life. For more information on what to do in the event that the IRS/State has imposed a tax levy or tax lien on you, individually and/or on your business, contact our professional team at Crest Tax Group. We will evaluate your unique situation and recommend the most appropriate course of action, immediately.
If your IRS back tax problem continues for long enough, the IRS will employ one of several collection tactics in order to collect the funds owed. One of these actions is filing a Federal Tax Lien. A Federal Tax Lien marks the IRS' priority on your real and personal property against all other creditors and gives them the right to seize and sell such property, subject to prior encumbrances, in order to collect the back taxes you owe.
Prior to such seizure, the IRS must make an assessment and make demand for payment. Should the IRS choose to file a tax lien, they will notify you in advance and give you a specified date by which you must pay your back tax debt before the lien will take effect. If you don't pay within the time specified in the first notice, the IRS has the right to begin enforcement proceedings.
In fiscal year 2012, the IRS filed 707,768 Federal Tax Liens, up nearly 50% versus ten years ago when, in 2002, only 482,509 liens were filed.
The IRS/State file tax liens to protect their interests. Recorded with one or several county recorders, a tax lien basically tells the world that you owe back taxes, and is generally devastating to the taxpayer's credit. This makes it very difficult to obtain credit or to sell real estate.
The negative effect of a tax lien is that when the taxpayer fails to pay the assessment of tax, plus interest, penalties, or costs, the tax lien arises upon all property and rights to property belonging to the taxpayer, whether real or personal, tangible or intangible. Even if the taxpayer makes partial payment, a lien will arise for the balance of the tax.
Once the Federal Tax Lien is filed, the IRS will only release the lien when your back tax debt is fully satisfied. They will do this 30 days after full payment, or immediately if paid in cash or the equivalent of cash. They will also release a lien upon the posting of a cash bond or upon giving the IRS a mortgage on real property whose fair market value is twice the value of the tax debt. Both the mortgage and the bond must stipulate payment terms over an agreed upon time frame.
A Federal Tax Lien can also be withdrawn if one of the following applies:
- It was filed too soon or not in accordance with IRS regulations;
- It speeds up the actual collection process; or
- It is determined that it is in the best interest of the taxpayer and the IRS.
A taxpayer can also appeal the filing of a Federal Tax Lien. The IRS must notify you that a Federal Tax Lien has been filed within five days after the lien is filed. Some of the reasons upon which a appeal can be based include but are not limited to the following:
- The tax debt owed was paid prior to the Federal Tax Lien being filed;
- The tax was assessed and the Federal Tax Lien filed while the taxpayer was in bankruptcy;
- A procedural error was made during the assessment;
- The statute of limitations on the debt had expired before the Federal Tax Lien was filed; or
- The taxpayer was not given an opportunity to dispute the liability. If you have a Federal tax liability, and you cannot fully pay all you owe at this time, the team at the Crest Tax Group may be able to help in keeping that Federal Tax Lien off the public records of your county courthouse.
How Crest Tax Group Can Help
Although the IRS/State are extremely reluctant to release or modify a tax lien, we are sometimes able to get the government to subordinate the lien to a lender, thus allowing the client to borrow money against his/her assets to satisfy all or part of the tax lien. Our professional team makes sure that the IRS/State have met all legal requirements for a legal tax lien filing. If any defects are discovered in this process, our team may immediately appeal the filing of the tax lien.
The team of Tax Attorneys, CPAs and Enrolled Agents at the Crest Tax Group understands how the IRS works and deals with the collection of back tax debts. We will work through qualified tax compliance programs, and when possible, facilitate the release of a client’s Federal Tax Lien. If you have a Federal tax liability, and you cannot fully pay all you owe at this time, the team at the Crest Tax Group may be able to help in keeping that Federal Tax Lien off the public records of your county courthouse. We will evaluate your unique situation and recommend the most appropriate course of action, and help you get past the stress and difficulties of your back tax problems.
If you owe back taxes to the IRS or State Taxing Authorities, eventually the IRS/State will begin to take more aggressive actions to collect the amounts you owe. One of the collection tactics the IRS can employ is the issuance of a Wage Levy, also known as a Wage Garnishment. When the IRS imposes a wage garnishment, it means, literally, that they take money out of every paycheck – often seriously jeopardizing an individual’s lifestyle and making it impossible to maintain the same standard of living.
Have you have received an IRS notice indicating their intention to apply a wage garnishment to your paycheck? If so, what exactly does that mean to you and what can you do to fix it?
Once the IRS notifies a taxpayer that they are imposing a wage garnishment, it means they can notify the taxpayer’s employer and the employer will then be required, by law, to send a significant portion of each of the taxpayer’s paychecks directly to the IRS to offset the debt. The dollar amount sent to the IRS for a wage garnishment depends on the taxpayer’s filing status, the number of exemptions claimed and how often the taxpayer gets paid. If the taxpayer does nothing, the IRS will continue to garnish their wages until the back tax debt is paid in full.
How Crest Tax Group Can Help
At Crest Tax Group, we always advise taxpayers against trying to take on the IRS on their own. The tax team at Crest Tax Group is experienced in dealing with wage garnishments. If you qualify for tax relief, our tax team will work with the IRS to negotiate the full or partial release of the wage garnishment. Depending upon your individual circumstances, we may be able to arrange an Installment Agreement that will allow you to pay the IRS a smaller dollar amount every month until the debt is paid, and depending on your financial circumstances, we may be able to negotiate an Offer in Compromise and settle your debt for less than the actual liability.
If you receive notice of a wage garnishment, we suggest you contact Crest Tax Group immediately. When you hire Crest Tax Group, you can be comfortable in knowing that our Tax Team has years of experience in dealing with the IRS. With our tax professionals and CTEC Certified Tax Consultants on your side, you can face the IRS with confidence. Don’t become another IRS statistic.
What are the risks of getting an IRS Tax Audit? The odds are low that your tax return will be picked for an audit. The IRS/State does not have sufficient personnel and resources to examine every tax return, so the IRS/State selects those tax returns, which upon preliminary inspection, have high audit potential—those that are most likely to result in a substantial tax deficiency.
In recent years, less than 2% of all individual income tax returns have been audited. However, your chances for an IRS/State tax audit are higher depending upon certain types of income, your professionalism, the types of transactions, and the types of tax deductions claimed on your tax return.
All IRS/State audits should be taken seriously though, because they often lead to other tax years and other tax deductions not originally stated in the audit letter.
Are you being audited by the IRS/State?
Ultimately, this can cost the taxpayer hundreds, even thousands of dollars.
Remember, in addition to any ‘findings’ by the auditor of unpaid taxes, you will also be assessed interest and penalties.
Would you go into a courtroom without a tax attorney or enrolled agent?
Do not take chances when you need tax audit help. Hire an expert who will vigorously and objectively defend your rights.
Crest Tax Group is highly skilled at representing those with IRS/State tax audits.