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

Tuesday, October 18, 2016

After Three Years, the IRS Scam Based in India is Closed!?

As you can see above - the visits to our "IRS Scam" page have diminished to nearly nothing thanks to the efforts of the Indian government who shut down the scam finally: Indian Call Centers Shut Down. We had been tracking this scam since it's inception in 2013. In three years, the scam managed to con several millions of dollars from duped US citizens. Glad to see that it's gone!

If you were as disgusted by this scam as we were, you might feel better after reading an entertaining piece at written by Alvin Chang who "trolled" the IRS scam for months before they closed down.

We are proud to have helped thousands avoid this scam: Beware of IRS Scam (our comment's section had 413 posts!). We promise to be there to report on the next shady stuff in the tax world that we see come down the pike.

Do you have a tax problem that you would like us to analyze? Call us at 1-888-282-4697 or send us a description of your tax issue HERE and we'll contact you. Staff of Washington Tax Services.

Wednesday, October 12, 2016

Setting up a Payment Plan with the IRS: Is It Forever? What Strategies Are Helpful?

Naturally the staff of Washington Tax likes to achieve the absolute best outcome for our customers that we possibly can. We always want to score a touchdown like an Offer in Compromise for $1,000 against $100,000.00. However, we are obviously limited by what the IRS will accept for our clients. In some instances, an installment agreement to pay back the liability is the best thing we can do initially.

How do we make a payment plan palatable for our clients who want the greatest bang for their buck?

1. Monitoring your tax case --  We manage all of the contact with the IRS -- handling all deadlines - keeping the IRS from levying you until an agreement is reached.

2. Timing -- the average person might go too fast in setting up an agreement with the IRS. Particularly, when some IRS liabilities are going to expire -- your tax professional should be careful at entering into an agreement too fast. Furthermore, your tax professional should also be able to gauge where you stand in the collection process so your first move is a good one without haste.

3. The amount of the agreement -- A hastily arranged payment plan might be more than you can handle - monthly. Your tax professional should be able to make the agreement manageable and doable for you - utilizing the 12 month adjustable tactic, streamline agreements and other tricks of his/her trade.

4. Planning ahead for a default -- With your tax debt possibly expiring in a few years - you obviously want to pay the IRS as little as you have to. For this reason, you and your tax professional might team up to see if "defaulting" your agreement - which buys you about four months of no payments -- can help you pay less - and then planning for these defaults in advance of tax debts expiring.

5. Penalty abatement -- If the payment plan was the only avenue for getting yourself out of the collection process, your tax professional should ask for a penalty abatement once the agreement has been honored EVEN if you don't have strong case for it (but filing and paying your taxes going forward certainly helps this cause).

While we hope to NOT to set you up in a payment plan on your back taxes, if we have to -- we'll try to give your tax case as much value as we can - with the goal of you paying the absolute least towards your tax debt.  Please call us at 1-888-282-4697 to discuss your tax issue or send us a description by EMAILING us HERE.  Staff of Washington Tax.

Tuesday, October 4, 2016

IRS Hires Private Collection Agencies To Collect: A Nothing Burger?

In the spring of 2017, the IRS will be contracting with four private agencies to attempt to collect IRS tax debt outside of what the agency is actively chasing. Sounds daunting. But a closer look shows that these folks might be on a bit of a "lost mission." As per the IRS, these outfits will be collecting older tax debts exclusively - 2012 and older years (by our estimate). These accounts will also have to have been dormant for at least one year, i.e., not pursued by an IRS employee in that time frame. Debts that are already in payment plan, Offer in Compromise (OIC) status or "Currently Not Collectible (CNC)" won't be handled by these groups.

The agencies won't be able to levy or enforce the collection debts and probably will just focus on setting up payment agreements for folks. People with tax debts that insist on pursuing OIC or CNC will probably have to request that their case go back to the IRS. Well...shouldn't that be your default response if faced by these collectors?! We think so. It also seems to be implied that payment agreements also might need to go thru IRS as well? This latter aspect - payment plans - wasn't clear, but it would seem to make sense for the private agencies to negotiate installment agreements in some way.

Previous attempts to outsource IRS collections to private agencies has failed. But the GOP led Ways and Means Committee thought to give it another try.

Who should be concerned about Private Tax Collectors?

If You Live in a State were IRS enforcement has dropped due to budget cuts.

With the IRS's ten year slide in enforcement due to budget cuts, some particular areas of the country have seen less IRS collections and a backlog of large debts. If you live in one of these areas - Texas is definitely one of them - the private tax collectors might be bringing your back tax debt in the light. Time to take action before they come calling.

Big debtors in Any State who cases are dormant NOT in OIC, CNC or payment plan status.

Pretty simply if you live anywhere in the US and owe a lot of back taxes to the IRS, you should be on your toes.

First consideration for an older back tax debt is it's Collection Statute Expiration Date (CSED). If you owe back taxes and want to see where you stand before the private agencies contact you, call us at 1-888-282-4697. We'll research your IRS record without stirring the bee's nest, find out your CSEDS and tell you what your options are. You can also EMAIL us a description of your tax issue HERE and we'll contact you. Staff of Washington Tax Services

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'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? 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.