The Mission Statement of the Tax Resolution Blog?

We created the Tax Problem Resolution Blog to aid the average person to become more discerning buyers of tax resolution and tax representation services. Please read the index of articles below to learn more about the tax resolution industry and to assist you in solving your specific tax problem.

Jay Freeborne, Enrolled Agent at Washington Tax Services, open for business since 1989

Wednesday, September 28, 2016

Haven't Paid Enough Taxes for the 2016 tax year? Let's Start Thinking Ahead to 2017.

It's almost October. If you are NOT current on paying your 2016 taxes on your 2016 income...it's probably time to start thinking ahead to 2017. If you are someone who might qualify for an Offer in Compromise, we can also start planning to roll these unpaid 2016 taxes combining them with your older taxes and look to settle them all. By doing so, you can re-focus on staying current on your taxes in 2017 and let us handle the 2016 and back taxes.

But we still have a few months left before 2017 - as your tax professional representing you, we will try to "kick the can" into 2017 by timing our contact with IRS collections correctly. We'll better be able to estimate how to time this by reviewing the LT11, CP504 letters from the IRS collection branch that you might have received.

By holding off IRS collections, we file your Offer in Compromise (or other form of resolution) at the end of December or early next year. By the time it's accepted in the Spring, you will be current on 2017 taxes. At least - this is how it should work in theory :)

Haven't paid enough estimated taxes for 2016?  And/or Owing back taxes too? Call us at 1-888-282-4697 or EMAIL us your tax situation HERE and we'll contact you! Thank you, Staff of Washington Tax Services - solving tax problems for Americans since 1989.  That's 27 years of solving tax issues. 

Wednesday, September 21, 2016

Haven't Filed Federal Tax Returns in 20 Years? 2 Years? Two Completely Different Approaches to Compliance

For almost 30 years - we at Washington Tax have been assisting fellow Americans to get straight with the IRS. Some of you haven't filed tax returns in a very long while. Others have filed taxes but owe an amount you can't afford to pay all at once.

We have tailored our approach to non-filers by asking - what's the bare minimum of filing you need to do? - rather than just outright assuming that we should file every year. If the IRS isn't looking for you and you are only getting refunds the last three years - why file more than that? On the other hand - if you are going to owe the IRS-  there are some instances where filing lots of tax years is beneficial particularly if the result is going to be an Offer in Compromise.

Let's illustrate two completely different approaches which are based on your age and whether you are an employee or self-employed:

28 Year Old - Has Never Filed Before

Eva - a young person - 28 - hasn't filed Federal returns since she left college. She has worked odd jobs in the last seven years. She hasn't heard from IRS and now needs to file a return to be in compliance to get her Healthcare credits. In her case: UNLESS the IRS is asking her to do so, doing more than the last three returns (2013, 2014 and 2015), is "over-kill." She wouldn't be getting tax refunds on returns older than 2013 and after researching her IRS record realize that the IRS isn't looking for them. After filing the returns, she gets refunds and assurance that she doesn't have to look in the rear-view mirror for IRS anymore.

55 Years Old - Self Employed Plumber - Hasn't Filed in 20 Years

William, a 55 year old one-man-show plumber, has been working his tail off for decades but hasn't filed Federal Tax Returns in that time. He hasn't saved a lot - he's just making ends meet - has minimal assets and with retirement looming hasn't contributed to his Social Security as self-employed people are required to do. We determine that William will probably be able to settle his IRS tax debt for a low amount regardless of what he owes. The huge bonus of doing this for him? He restores his social security credits by settling his debt with the IRS! That's a huge victory securing some retirement funds for himself while getting clear with the IRS.

Every case is different. We will come up with a tax compliance plan that is unique to your situation. Haven't filed taxes? Owe the IRS? Please call us at 1-888-282-4697 or EMAIL us a description of your tax issue HERE and we'll contact you. Staff of Washington Tax Services

Thursday, September 15, 2016

Most Popular Question of Clients: How do I Get Tax Lien Removed?

In our 27 year-plus history representing people with tax problems: the most frequent question we get from clients is: how do I get the tax lien removed? Tax liens - or judgements -- are filed by the IRS when someone has been assessed a tax liability that they haven't paid. Tax liens usually are filed when the balance due is north of $20,000.00. These liens usually migrate to your county courthouse and are recorded against any real estate that you might have. Tax liens do complicate - a. real estate transactions and b. in this day and age - employment. They're meant to be a headache - otherwise - why would the IRS file them?

So...how do tax liens get removed?  

Here are a few ways:

1. The tax liens expire -- If you can run out the clock, taxes generally will expire 10 years after they are assessed. There are a number of ways -- that the clock can extend past 10 years -- a. you file bankruptcy during the 10 years b. you file an Offer in Compromise (and it is rejected). c. the IRS has you sign a waiver extending the statute of limitations (not very common anymore).

2. An Offer in Compromise is reached and the debt is settled.  (Everything you might want to know about Offers is here: Offer - Rule Changes - 2016.

3. The tax debt is brought below $25,000.00. If you can pay your debt down under $25,000 - the IRS will remove the lien.

4. The tax debt is paid in full.  Why of course :)

It's worth noting that a tax lien is usually filed --  a. when the Offer in Compromise process begins - and removed later AND also when b. you are placed into currently-not-collectible.

5. You get the debt below $50,000 and enter an installment agreement.  This streamline agreement is for people who have NOT had a tax lien filed against them YET...(If you already have a lien against you -- you won't have it removed).

Tax lien on your record? Want an honest opinion on your options? Call us at 1-888-282-4697 or EMAIL us a description of your tax issue HERE and we'll discuss strategies to get it resolved via email/phone.  The Staff of Washington Tax Services

Friday, September 9, 2016

IRS Offer in Compromise Rule Changes Revisited for 2016: Part One of A Three Part Series

In the 27 year operation of Washington Tax Services, we've seen a lot of rule changes with the IRS in the Offer in Compromise (OIC) program, BUT never a development as generous as the most recent one. These new rules, originally created in the Spring of 2012, are truly a game changer and should have you strongly consider doing an OIC on your back tax debt!

First, what is an Offer in Compromise (OIC)?
  
The Offer in Compromise (OIC) is a procedure used to settle tax debts with the IRS. If the IRS determines you meet certain criteria, they might agree to settle your debt for $500, for example, on the $50,000 or whatever amount you owe. 

Second, what's the biggest change to the OIC rules?

Previously, IRS settlements were calculated by multiplying 48 months of one's "allowable" disposable income.

Old rules: 48 months

So - if your disposable income was $500 - multiplied by 48 months = your settlement with the IRS would be $24,000.00*  (*with many other factors to consider - of course - like assets, "allowable" expenses and statute of limitations).

New rules: 12 months

With the new rules?  Only 12 months of disposable income is required or using the previous data set -- $500 multiplied by 12 months -- your settlement would be only $6,000.00!*

Bottom line: You pay 75% LESS than Before! 

  
Watch this video to see Jay Freeborne, E.A., speak on the OIC rule changes

READ PART 2: "Can You Pay Off Tax Debt Before it Expires?" in our Offer in Compromise series HERE

Please call us at 1-888-282-4697 to discuss how this program might benefit you or EMAIL us your tax situation HERE and we'll contact you!

 Washington Tax Services - since 1989. 

Thursday, September 1, 2016

Handling IRS Bank Levies and Wage Garnishments: Timing is Everything

The clients of Washington Tax Services always expect us to get their wage garnishments and bank levies released from the IRS and State - and we are honored to take on the task. However - even when we do get the IRS to agree to a levy release - there's still important followup and timing needed to get the release to the proper party -- an employer, the bank or the contractor who is holding your funds. This blog post isn't about "HOW' we get levies released - you can read more about that HERE, but rather how the importance of what-to-do with a "Levy release" when it is in hand.

1. Getting the right fax # - your consultant here at Washington Tax Services has probably schooled you in the necessity of getting a fax # for your employer or bank so we know how to get the levy release to.  Make sure it is the right one!

2. Following up on receipt of a levy release -- We will illustrate a mishap recently to show the importance of followup. On a Friday - we got the IRS to release a levy to a client's insurance agency thereby releasing $20,000 of funds to our client. We faxed the levy release to the # given to us and then scanned the same form to our client who also faxed it to the same number.  He did NOT followup with the agency holding the funds. The next Wednesday - the company sent the $20,000 to the IRS and not to the client.  Apparently they NEVER got either of our faxes. You've got to followup with a phone call - is the lesson here, of course.

3. Bank levies: getting the 21 day clock right -- When the IRS freezes your bank account - your bank will hold your funds for 21 days. After that you are dust - the money is sent to the IRS. Recently we released $70,000 to a client. But , whoops  - the client was off by two days in their measure of the 21 day period - they were also delayed at getting us info to prepare their returns - pushing us right up to the deadline. The funds were NOT released.

Wage garnishment releases and bank levy releases are our forte. But we are not miracle workers - followup is key. Getting hammered by the IRS or State? Call us at 1-888-282-4697 or EMAIL us a description of your tax issue HERE and we'll contact you. Staff of Washington Tax Services

Saturday, August 20, 2016

Haven't Filed Tax Returns in Three Years? Seven Years? Forever?

You might identify with a few of the non-filer cases we see at Washington Tax Services:

"Five years have passed and you haven't filed tax returns. You wonder: "will the IRS ever find me?" In the middle of many a night, it crosses your mind. The next week you open a letter from the IRS with palms sweating..."

Or 

"You might be the guy who hasn't filed in 30 years: you are strictly a cash-based sub-contractor and not filing forever has you scared. Retirement looms and you have never contributed to Social Security..." What do you do?

You might find answers to this question in our index of articles below: 

Monday, August 15, 2016

Owe the IRS? When Should Your Really be Scared of IRS and When NOT?

Fear of the unknown is a big motivator for someone who owes the IRS or State back taxes. Folks in our trusted position, i.e., licensed tax professionals, will almost always be honest about whether a fear of your tax problem is valid or not. However there are always going to be people - usually "tax relief" sales people or consultants who will overblow fears to take advantage of tax problem clients. Today we are creating a Fear Meter to assist you at determining how serious your tax problem is and how urgently you should handle it.

FEAR METER

Code 5 -  Jail - or Possible Jail Time and/or Judgement
If you got a Letter or Business Card Drop-Off from an IRS "Special Agent" (not a "Revenue Officer"), this means that you are possibly under investigation for Tax Evasion or Perhaps "Willful Failure to File." You might be subject to a grand jury investigation, jail time and a judgement for unpaid taxes (that really has no expiration date).

Code 4 -  Levy/Seizure in Place. Bank Accounts Hit, Wages Hit, and/or House Seizure
If you received a Notice of Levy on wages, you should expect a sizable bite out of your next paycheck unless you act quickly (with help of a tax professional like watax.com). Bank accounts can be frozen - albeit with a 21 day hold which gives you and your tax professional the opportunity to un-freeze the levy. A seizure of property posted on your home or piece of real estate is serious business. They will almost definitely take your property (auction) if you don't act quickly.

Code 3 - Serious Threat of Levy/Seizure. Time is Running out.
If you received a Final Notice of Intent to Levy, the clock is ticking fast. You will probably be levied in 45 days (at least) if you don't do something.

Code 2 - IRS Collection Process is Starting - Time to get in Gear.
The CP504 letter or LT 11, LT16 letters look super scary, but in reality they put you about 90 days away from levy. Time to hire a professional like watax.com or be prepared to call them yourself.

Code 1 - Haven't filed Tax Returns in a Long time. What do I do?
Scary situation yes, but you have time to digest your options for re-entering the system. Read our "Haven't Filed in a Long Time" blog post or our Self-Employed and Unfiled? site.

Washington Tax Services has been assisting Tax Problem Clients for almost 30 years. Here are some recent reviews about us from some Real Live clients: WATAX reviews.  If you want a free analysis of your tax issue, call us at 1-888-282-4697 or EMAIL us your tax problem HERE and we'll call you.