Submit an Offer in Compromise

If you’ve been issued a tax levy and you cannot pay your tax debt, you can submit an IRS Form 656 to make an offer in compromise. This agreement allows you to settle your debt for less than the full amount owed. You can choose to pay 20% upfront and then pay the remaining balance in fewer than five installments, or you can opt to make periodic payments until the balance is fully paid.

Appeal Your Case

If you disagree with the IRS’ decision to issue a tax levy and believe you have a strong argument, you can file an appeal. Arrange a Collection Due Process (CDP) hearing upon receiving your tax levy notice to go through the tax resolution process. The Law Office of Jason Carr, PLLC can help guide you through this appeal process in Colorado.

Make a Case for Economic Hardship

If a tax levy has caused serious financial hardship for your family, you are entitled to petition to have the levy lifted. You can explain your situation to the IRS, and they may offer a payment plan or other alternatives. Our team can assist you in presenting a compelling case to the IRS, highlighting the economic difficulties caused by the levy.

Apply for Innocent Spouse Relief

If the tax levy is based on errors or income that was mistakenly excluded from your return due to your spouse’s actions, you may qualify for innocent spouse relief. This relief is applicable if your spouse omitted information without your knowledge, or if you were unaware of the tax issue. Our experienced attorneys can help you navigate this process and potentially lift the levy on your property in Colorado.

Lifting a tax levy is challenging, and the process can seem daunting due to the complexities involved. However, with the right legal assistance from The Law Office of Jason Carr, PLLC, and by thoroughly exploring your options, you may successfully resolve your tax issues. Contact us today for a professional consultation about your tax issues.

The post The 4 Best Ways to Get a Tax Levy Lifted appeared first on Colorado Tax Lawyer | Colorado Tax Audit Defense | Colorado Tax Credit Attorney.

While the coronavirus pandemic brought unprecedented changes, including extended tax filing deadlines, many Americans continue to face surprises from the IRS. It’s not uncommon for taxpayers to file their returns expecting a refund, only to receive a notice from the IRS withholding some or all of that anticipated amount.

This article explores why this happens and what you can do about it.

Possible Reasons for an IRS Notice

There are several reasons why the IRS may withhold or reduce your tax refund. Some issues are straightforward, while others may require more attention.

You or your spouse owe federal or state taxes.

Owing taxes is a primary reason the IRS might hold onto or reduce your refund. If you or your spouse owed taxes prior to marriage, your joint refund could legally be used to cover those past dues. If you owe the IRS or state taxes, consider:

• The exact amount you owe;
• Accuracy of the IRS or state’s tax calculation;
• Options to reduce your tax liability;
• Potential penalties and interest due.

If your refund was used to cover a spouse’s pre-marital tax debt, you might consider filing an injured spouse claim to recover your share of the tax refund.

You or your spouse owe other types of debt.

The IRS might also use your refund to pay off other government debts, such as overdue child support, unpaid student loans, or incorrectly paid unemployment compensation. If such a situation arises, contacting the respective agency directly is advisable. You can file an injured spouse claim to reclaim your portion of a joint refund if it was used to settle these types of debts belonging solely to your spouse.

The IRS identified errors on your return.

If there are discrepancies in your tax return, the IRS might modify your return and notify you. This could be due to simple errors like mismatched Social Security Numbers or more complex issues.

Your tax return is under review for credit or deduction eligibility.

The IRS may delay your refund while reviewing eligibility for credits or deductions claimed, such as the Earned Income Credit (EIC), especially if there is a dispute over dependency claims. Provide the IRS with necessary documentation promptly to resolve these delays.

You were a victim of tax identity theft.

If someone else has filed a tax return using your Social Security Number, the IRS will contact you to verify the legitimacy of the filing. If the return was not yours, you should confirm your identity with the IRS to ensure they process your legitimate return and issue the correct refund.

The IRS is investigating another one of your returns.

If the IRS is auditing a previous return or investigating a delinquent return, they may withhold your refund until the investigation is complete. Any refund may be applied towards taxes owed, or released if no taxes are due.

What to Do If You Receive a Notice from the IRS

The IRS sends millions of letters to taxpayers each year for various reasons. Here are some tips if you receive one:

Don’t ignore the notice.

IRS letters and notices are specific and include instructions on what to do. Open any IRS communication immediately and respond by the due date to achieve the best outcome.

Take timely action.

Responding promptly can help reduce additional interest and penalty charges.

Review the information in the notice.

If the letter pertains to a changed or corrected tax return, compare the information with your original return. If you agree with the corrections, update your personal copy for your records.

Don’t reply unless directed to do so.

Usually, there’s no need to reply to a notice unless it specifically asks you to. However, if you owe money, you should reply promptly with payment.

Takeaway

If you receive an IRS tax notice, don’t panic. IRS issues are common and often just require reading the letter carefully and taking appropriate action.

Contact an experienced tax attorney at The Law Office of Jason Carr, PLLC for help in resolving your tax issues in Colorado.

For more information on this and other tax matters, consult the IRS or a qualified tax professional.

The post Why Did The IRS Take My Refund? appeared first on Colorado Tax Lawyer | Colorado Tax Audit Defense | Colorado Tax Credit Attorney.

If you do, you’re not alone. The Internal Revenue Service (IRS) found that more than 14 million Americans owed over $131 billion in back taxes, penalties, and interest in 2018.[1] With the help of The Law Office of Jason Carr, PLLC in Colorado, you can leave that group and resolve your IRS tax debt now to get your finances and your life back on track.

Here are three reasons why you should do this now and not delay.

Eliminate stress and anxiety.

You’re not going to out wait the Internal Revenue Service. They’ve been at this since Lincoln established the agency in 1862.[2] They keep track of who owes what, and they want their due. This only means that the longer you delay, the greater the pressure and stress on your shoulders. Plus, if you fail to file by the deadline, you could be hit with a monthly penalty of 5% of unpaid taxes—up to a maximum of 25% of your balance—making your tax headache (and shoulder ache) all the worse. As such, owing back income taxes is one of the most stressful situations you can have. And it’s the first reason you should resolve your IRS debt now. The IRS can garnish wages, levy bank accounts, and seize assets in Colorado. Who needs this? Work with the experienced tax attorneys at The Law Office of Jason Carr, PLLC and address your tax issue straightaway. You’ll be so much happier with this off your plate and a fresh start.[3]

You can set up an installment plan.

While the IRS can be a pretty harsh agency, it does have some options for those that are trying to settle their debts in Colorado. Another reason to address your tax liability right away is the fact that the IRS will let you complete an installment agreement when you complete your tax returns with the use of Form 9465.[4] The IRS says that “in most circumstances,” it will approve your agreement request if you owe less than $10,000, and you’ve successfully filed your income tax returns in the last five years.[5]

Form 9465 is used to request a monthly installment agreement or payment plan if you’re unable to pay the full amount you owe shown on your tax return or on an IRS notice you receive. The IRS explains that most installment agreements meet its streamlined installment agreement criteria, for which the maximum term is 72 months.[6] In some situations, you can have more time to pay or you can establish an agreement for an amount that’s less than the amount of tax you owe (which is discussed below).[7] But before requesting a payment plan, the IRS says you should look at other alternatives, like getting a bank loan or using available credit, which may be less costly.[8]

If you owe $50,000 or less, you may be able to avoid filing Form 9465 and set up an installment agreement on the IRS website.[9]

You can pay less than what is owed.

One significant reason to address your IRS tax debt now is the fact that you may be able to settle with the government for less than you owe. This is done through what is called an offer in compromise.[10] This may be a good option if you can’t pay your full tax liability, or if doing so would mean a financial hardship in Colorado.

The IRS looks at your unique set of facts and circumstances, including your ability to pay, income, expenses, and asset equity.[11]

The IRS generally approves an offer in

compromise when the amount offered is what they think is the most it can expect to collect within a reasonable period of time. So, you need to show the IRS that this is the best they’re going to get. You and your attorney should explore all other payment options before submitting an offer in compromise because this program isn’t for everyone.[12]

Takeaway

We see all kinds of advertisements for debt relief, and unfortunately many of these are scams. Work with an experienced tax attorney at The Law Office of Jason Carr, PLLC in Colorado and resolve your tax issue now.

For more information on this and other tax matters, consult the IRS or a qualified tax professional.

Reference:

[1] IRS website, SOI Tax Stats – Delinquent Collection Activities – IRS Data Book Table 16 (Last reviewed March 19, 2020). Retrieved at https://www.irs.gov/statistics/soi-tax-stats-delinquent-collection-activities-irs-data-book-table-16.

[2] IRS website, Historical Highlights of the IRS (Last reviewed February 28, 2020). Retrieved at https://www.irs.gov/newsroom/historical-highlights-of-the-irs.

[3] See Sean Pyles, Tax Debt: 3 Steps to Resolve Your Debt With the IRS, NerdWallet (July 19, 2019). Retrieved at https://www.nerdwallet.com/blog/finance/tax-debt/.

[4] IRS website, About Form 9465, Installment Agreement Request (Update April 1, 2020). Retrieved at https://www.irs.gov/forms-pubs/about-form-9465.

[5] Id. To be eligible for the installment plan, you must be current in filing tax returns; your state income taxes and late fees must be mostly paid; and you’re able to make the monthly minimum payments that the IRS requires. How to Settle Your IRS Tax Debt. Debt.org (Last updated  April 16, 2019). Retrieved at https://www.debt.org/tax/debt/how-to-settle/.

[6] IRS website, Instructions for Form 9465 (Last reviewed January 9, 2020). Retrieved at https://www.irs.gov/instructions/i9465.

[7] Id.

[8] Id.

[9] Id. See Dori Zinn, Tax Debt Relief: How to Resolve Your Debt with the IRS, BankRate (February 6, 2020). Retrieved at https://www.bankrate.com/debt/debt-relief/tax-debt-relief/.

[10] IRS website, Offer in Compromise (Updated February 28, 2020). Retrieved at https://www.irs.gov/payments/offer-in-compromise.

[11] Id.

[12] Id.

The post 3 Reasons to Resolve Your IRS Tax Debt Now appeared first on Colorado Tax Lawyer | Colorado Tax Audit Defense | Colorado Tax Credit Attorney.