RECEIVED A NOTICE OF DEFICIENCY FROM THE IRS? DON’T PANIC: HERE’S WHAT YOU CAN DO

IRS tax notice Receiving mail from the Internal Revenue Service is enough to make anyone’s knees quiver. It almost always means you owe more money to Uncle Sam for one reason or another. In the case of a Notice of Deficiency, formally known as CP3219A, it means that the information you provided with a tax return does not match up with the information a third party sent, like a bank for an employer.

What is a Notice of Deficiency, and what should you do about it?

Defining the CP3219A Notice of Deficiency

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

If you receive a CP3219A Notice of Deficiency from the IRS, you are being notified that there is a discrepancy in your tax return. Something you reported does not jibe with something a third party reported under your name and social security number in support of your tax return.

Your employer or a financial institution has reported a different number for taxes, expenses, or income than what you put down on your tax forms. The IRS then changes the amount you owe in taxes according to the third party information. It’s automatic; they don’t wait to make sure that you agree.

Please note that the notice is not a bill but a “proposal,” according to the IRS website. It also provides you with various options for responding from 'Yes, you agree,” to “No, I don’t, and here’s why you’re wrong.” You also receive information about filing a petition with the U.S. Tax Court.

The notification also is not a formal audit notification. It is just the first step in reconciling the difference between your return and information from another party. Within the notice, you will receive Form 5564 and an envelope for you to fill out and return. You will probably need to provide the stamp.

This year, before receiving the CP3219A, you may have received IRS Notice CP2000, a “pre-notification” the IRS now sends when information from a third party doesn’t match the information you reported on your tax return. You should respond to it because if you don’t, you will then be sent a CP3219A with more details about why you owe more tax money (bad news) or why your taxes are decreasing (good news).

What to Do if You Agree with the Notice

If you receive CP2000 or CP3219A and realize, yes, you made a mistake, and you agree with the IRS that you owe more in taxes, and you have no further changes to make to your return, just sign Form 5564, Notice of Deficiency - Waiver and send it back to the agency. There is no need to amend your tax return unless you discover additional income, credits, or expenses. In that case, fill out Form 1040-X to amend your original return with the new information.

Don’t forget to pay any additional tax as reported in the Notice of Deficiency. By the way, because you are late paying, you will also owe interest and penalties on the unpaid tax debt.

If alternatively, you are notified of a tax decrease, you can consider yourself lucky. Just be sure to send back Form 5564 by the deadline.

“But I Don’t Agree!” 

In that case, prepare your supporting information and offer it to the IRS to see if they will accept it.

Phone the IRS, so they can answer any questions you have, clarify why you received the notice, and tell you what you need to do to resolve the issues. The agency also generally accepts information over the phone for incorrect reporting on your tax return.

However, if it isn’t enough, you will still need to respond by mail or fax your signed statement explaining your disagreement.

Mail or fax Form 5564 back to the address on the notice by the deadline along with the new information you feel disputes the notice.

Contact the third party that furnished the information that disagrees with your return and ask them to correct it.

File a petition with the U.S. Tax Court by the deadline, if warranted. Late petitions will not be considered.

Remember, just because you disagree with the notice doesn’t mean the IRS will agree with your opinion. The agency will take your information into consideration. In the meantime, you do not get an extension on the time you have to file a petition with the U.S. Tax Court.

If you’re wondering why it took the IRS so dad-gummed long to let you know about the problem, the agency states “… their computer systems match the information on your tax return with that reported by employers, banks, businesses, and others. The matching may take several months to complete.” 

However, you cannot get an extension to the time you are given to respond to the notification. Contact the IRS as soon as possible. If you need a copy of your return, you can request a return transcript, call the automated IRS phone application, or complete Form 4506-T - Request for Transcript of Tax Return.

If a transcript isn’t good enough, request a copy from your tax preparer or send Form 4506 - Request for Copy of Tax Return. There is a fee for tax return copies from the IRS.

IRS collections can be extremely stressful. 

A WORD ABOUT IDENTITY THEFT

What if the reason you received a CP2000 or CP5419A was that someone else reported incorrect information using your name and social security number?

The IRS recognizes this may be an issue and has prepared, what else, a form for you to fill out. If you believe your information has been altered in this manner, send Form 14039, Identity Theft Affidavit to the agency. In addition, you can go to the IRS identity theft information web page to learn what more you can do.

IF YOU CANNOT PAY IN FULL 

If the resulting tax bill is more than you can pay in one go, contact the IRS to set up a tax debt payment plan. You have several plans at your disposal, depending on what you can pay and how long you need to pay the entire amount.

Remember, you will accrue interest on any unpaid amount until you pay in full. Still, it’s better than having a lien placed on your property and other penalties the IRS can use. Payment plans are available in different lengths of time. At the most extreme, if there is absolutely no way you can ever pay the amount (and you can prove it), you may be eligible for an Offer in Compromise, and decrease your tax bill.

Receiving an IRS Notice of Deficiency isn’t the end of the world. It’s certainly better than an audit notice. Just be sure to respond immediately, whether you agree or not. You are on the clock with no hope of an extension.

Call the IRS if you require clarification or have information acceptable to the agency. Otherwise, file Form 5564 along with supporting documentation if you don’t agree or a note that you will pay the debt if you do.

Just be sure to follow all instructions to the letter and, next year, wait until you get all your income statements before filing your return, and verify all your documentation.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax return and past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtProblems #FilingBackTaxes #TaxReliefPrograms #IRSDebtForgivenes #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp #TaxRELIEF #TaxAttorneys #AuditHelp #BackTaxes

#OfferInCompromise #WageGarnishmentHelp #AuditReliefHelp #SmallBusinessTAXES

GETTING THE IRS TO RELEASE YOUR WAGE GARNISHMENT WHEN YOU HAVE UNFILED BACK TAXES

Automated Collection Service, Economic hardship and the IRS, IRS Appeals, IRS Financial Statements, Tax Court, Unfiled returns, Back Taxes, Wage Garnishment

When the IRS levies your wages or accounts, it is usually to get your attention.

There is something the IRS wants that you have not provided – it could be a financial statement, estimated tax payments, or getting in compliance on unfiled tax returns.

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ RATED
CALL (713)300-3965

And to get the levy released, the IRS is usually going to condition it on, say, getting your unfiled tax returns in first.  The IRS tells you that they operate on a “compliance first, levy release second” basis.

But what if you cannot get the tax returns prepared quickly enough to get the levy released when you need it, which is now?

The levy is causing an economic hardship to you – preventing you from paying your bills – while you work to get the tax returns prepared.

But the IRS does not care – the are standing pat – all returns filed, no exceptions, no levy release.

There is help out of this bind.

The U.S. Tax Court, in the case of Vinatieri v. Commissioner, 133 T. C. 892 (2009), held that the IRS is required to release levies even if tax returns are not filed, provided it can be proven to the IRS that the levy is causing an economic hardship to you.

In the Vinatieri case, the IRS sent Kathleen Vinatieri a Final Notice of Intent to Levy, putting her on notice that they wanted to levy her assets.  Ms. Vinatieri responded by telling the IRS that any levy would prevent her from paying her bills. She requested a hearing with an IRS appeals officer, known as a Collection Due Process Appeal.

At the hearing, the Ms. Vinatieri provided financial information to the IRS verifying that if her income was levied, she would be in economic distress.  The IRS appeals officer agreed that Ms. Vinatieri could not afford a levy, or to make any payments to the IRS on her debt, and that a levy would create an economic hardship to her.  This qualified Ms. Vinatieri’s account to be placed in currently uncollectible status, with the IRS leaving her alone and not levying.

But IRS appeals officer sustained the levy – even though it was undisputed that it would cause an economic hardship – as Ms. Vinatieri had unfiled delinquent back tax returns.

Ms. Vinatieri headed to Tax Court, and the court agreed with Ms. Vinatieri, ruling that the IRS must release a levy even if there are unfiled tax returns if the levy is causing an economic hardship and the account qualifies for currently uncollectible status.

The Tax Court’s decision was based on Internal Revenue Code 6343(1), which requires the IRS to release a levy if it will cause an economic hardship. The court found that there was no wording in the Internal Revenue Code conditioning the release on the filing of past due tax returns.  The Tax Court found the wording of the law to be clear – if a levy causes economic hardship, the IRS must release it, and cannot condition the levy release on getting in compliance with unfiled tax returns.

After the Vinatieri case was decided, two things happened at the IRS:

The IRS Taxpayer Advocate announced that they would be assisting taxpayers who were being levied, had unfiled tax returns, and could demonstrate that the levy would cause them economic hardship.

The IRS Office of Chief Counsel issued Notice CC 2011-005 to make sure that appeals officers followed Vinatieri when presented with cases where there was demonstrated economic hardship and unfiled returns.
What this means to you:

First, even though Vinatieri is law, do not expect all IRS agents to know and follow it.  That is not intentional – it is probably more because every IRS Revenue Officer or Automated Collection Service employee does not know about Vinatieri, or if they do know, they lose sight of it in their daily work flow.

In other words, change can be slow, and tax return filing as a condition to levy release – even if the account should otherwise be currently uncollectible – has long been an ingrained part of IRS culture.

That means you need to know the law and your rights under it, and be prepared to respectfully point it out to the IRS when necessary.

Second, it is important to understand that “economic hardship” is defined as qualifying for IRS currently uncollectible status.  This means that to be able to use Vinatieri we need to prove to the IRS that your income is enough to only pay your living expenses.  Bear in mind, though, that the IRS does have living expenses caps – meaning your hardship and living expenses has to match the IRS’s definition and guidelines.

Vinatieri means that Internal Revenue Code 6343(a) (1) gives you relief from a levy while we complete your unfiled returns if you are in economic hardship and qualify for IRS currently uncollectible status.  In that situation, the IRS cannot hold the returns over your head and condition levy release on the returns being filed.  But to finalize the uncollectible determination, the IRS will still need your tax returns – Vinatieri forces them to release the levy in the meantime.  It gives you relief while you prepare what is missing, and evens the playing field.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax return and past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtProblems #FilingBackTaxes #TaxReliefPrograms #IRSDebtForgivenes #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp #TaxRELIEF #TaxAttorneys #AuditHelp #BackTaxes
#OfferInCompromise #WageGarnishmentHelp #AuditReliefHelp #SmallBusinessTAXES

IRS SENT ME A FINAL NOTICE OF INTENT TO LEVY - WHAT SHOULD I DO?

IRS Appeals, IRS collection notices, IRS levies and property seizures

You were brave enough to pick-up and open your certified mail, and there it was – an IRS Final Notice of Intent to Levy.

The law is intended to avoid surprises from the IRS and protect you, and the Final Notice of Intent to Levy does just that, giving you notice in advance that they are considering sending a levy to your employer or bank or even taking your personal property or real estate.

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

Now that you are on notice that the IRS wants to gear up its collection activities, what are your next steps?

You do have rights.

First, it is important to make sure you have received an actual Final Notice of Intent to Levy from the IRS. The IRS sends out many, many different collection letters, and they all tend to look like, but they are not all are equal.

To determine if you have received an actual Final Notice of Intent to Levy, look in the upper right hand corner of your letter.  You are looking for IRS identifiers LT11 or LT 1058 – if your notice doesn’t have either of those, it is likely not a Final Notice of Intent to Levy giving the IRS the right to take your property.

If your letter is either an LT11 or LT 1058, then you now have important rights to stop the IRS from levying you.

The IRS not only has to give you notice before they levy, but also the right to prevent a levy by the filing of an appeal to negotiate alternatives to seizure.

Tax laws give you 30 days after the date of your LT11 or LT 1058 notice to file an appeal.  Filing your appeal is extremely important as it stops the IRS from levying you while it is pending. This enables you to continue to protect your wages and accounts from the IRS while you work out a solution with them.

If more than 30 days have passed since the IRS sent you the final notice, that’s okay, too. The IRS is actually somewhat flexible in giving you the ability to appeal their final notices of intent to levy, extending the tax law requirement of appealing with 30 days and giving you up to a year if you missed the deadline.

After the appeal is filed, procedurally, it will take the IRS about 3-5 months to process it. In most situations, during that entire time, the IRS continues to be barred from taking collection enforcement against you.

The IRS will then forward your appeal to a settlement officer.  IRS settlement officers are not collection employees and are trained to settle unpaid tax cases.  They cannot levy you. They are there to resolve your case.

If you have been frustrated by dealing with the IRS Automated Collection Service or a local IRS Revenue Officer, your collection due process appeal changes that and put you in front of a different IRS employee – a settlement officer – who likely has a different perspective.  After you have reached resolution with the settlement officer (without the threat of levy), the IRS has to abide by it.

The IRS Final Notice of Intent to Levy is probably the most important letter the IRS will send you.  After all, without it, the IRS cannot levy your wages, bank accounts and property.

With the final notice, you have rights to stop the levy before it happens, and meet with an IRS settlement officer to negotiate a solution that is better than levy.  Solutions that the IRS settlement officer can consider include an offer in compromise, a monthly payment plan, currently uncollectible and even penalty abatement. If you owe back taxes to the IRS, properly responding to the final notice can be an important element of getting the best result.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax return and past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtProblems #FilingBackTaxes #TaxReliefPrograms #IRSDebtForgivenes #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp #TaxRELIEF #TaxAttorneys #AuditHelp #BackTaxes

#OfferInCompromise #WageGarnishmentHelp #AuditReliefHelp #SmallBusinessTAXES

WHAT REALLY HAPPENS WHEN YOU FILE BACK TAXES

Back Taxes, Tax Attorney, Tax Relief

what happens when you don't file taxes

If you somehow missed all the clues that Tax Day was April 15 (every year), or all the specials from tax preparers running up to this year’s Tax Day, you may be wondering what to do now.

Should you just ignore it and swear to do better next year? (Answer: No)

Should you panic? (Answer: No)

The world won’t end if you don’t file on time, but there can be financial consequences involved, depending on your circumstances. Read on to find out what REALLY happens if you don’t file your taxes.

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

To Open with Good News…

There is one situation where not filing on time isn’t completely bad news. If you owe $0 (that’s zero dollars) in taxes or if you are owed a refund, you are not required to file your taxes. If you do file late, there is no penalty.

Isn’t that great? Except, if you are owed a refund and don’t file within three years of the associated tax date, the IRS gets to keep it. So you don’t have to rush, but if you want your refund, you might as well do it. At least you have three years, but you won’t get paid any interest.

Important Distinction

There is a difference between failure-to-file and failure-to-pay. And, oddly enough, it will cost you more in penalties for failure to file.

Still, it’s important to understand that filing on time is the most important thing you can do. You either need to file your income tax forms on Tax Day before midnight or you need to file for an extension.

However, if you file for an extension, that’s only for filing your tax forms. You’re still expected to pay on time. Sorry, no extensions for that.

FAILURE TO FILE

If you fail to file your tax return on time, the IRS can and will penalize you a late filing fee. This year the fee is 5% of the taxes you owe for each month past tax day that you fail to file. The penalty maxes out at 25% of the taxes you owe.

However, if you don’t file within 60 days of the April due date, the minimum penalty is $210 or 100% of your unpaid tax, whichever is less. Therefore, if you owed $210 in taxes and you waited 60 days to file, you wind up paying $420 total.

There are extenuating circumstances under which the IRS will waive late filing penalties. Some disaster victims, military service members and eligible support personnel in combat zones, and U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico, have more time to file and pay.

FAILURE TO PAY

Penalties for failing to pay your taxes on time are actually lower than for filing late. For each month past the payment date you will be assessed 0.5% of your total tax bill as a penalty. This fee also maxes out at 25% of your tax bill. However, interest still accrues on the unpaid taxes over and above the penalty for failing to pay on time.

Interest begins to accrue on unpaid taxes one day after the bill was due. Interest compounds daily until the bill is paid in full. The rate charged is the Federal short-term interest rate plus 3%. Be aware the Federal short-term rate is set every three months; currently the interest rate is 5% (short-term rates are 2% plus the mandatory 3%). If the short-term rate goes up before you pay in full, your interest rate goes up, too.

You can reduce the penalty and interest by paying as much as possible on time. The less you owe, the less you will have to pay extra.

If you fail to file as well as fail to pay on time, the failure-to-pay penalty is waived and you only pay for failing to file.

FIRST TIME PENALTY ABATEMENT

If you meet the eligibility requirements, you may be able to have your first penalty waived.

If you were not required to file a return before you did not receive a penalty for the previous 3 years, and

You filed any required returns or filed an extension for all previous years, and

You paid or set up a payment plan for any tax due. Also, if you have a payment plan, you must be current.

If you do not qualify for the abatement, you will get lower penalties for late payment than for late filing. But don’t forget that interest begins to accrue the day after the due date and compounds daily, so it may not be worth it to follow that path.

THE 90% RULE

Most years, if you have paid 90% of your balance due on Tax Day, the IRS will not penalize you for failing to pay proper estimated taxes. (The rule doesn’t apply to tax withholding by your employer.) However, for this year, if you paid at least 80% of your tax liability through paycheck withholdings, quarterly estimated tax payments, or a combination of the two, you will not face any IRS penalties.

The reason for the change is because 2018 was the first year many of the new provisions of the Tax Cuts and Jobs Act of 2017 became effective. Taxpayers may not have had the correct amount of taxes taken out of their wages or made the correct estimated payments.

The new federal tax withholding tables weren’t issued until early last year, so employers didn’t have a chance to calculate the correct amount of withholding from the beginning of 2018. Also, the new tables didn’t completely factor in other changes, including the suspension of dependency exemptions and reduced itemized deductions that were part of the tax law change.

WHAT’S THE WORST THAT CAN HAPPEN?

If you don’t file your taxes or file for an extension, you will accrue penalties that can be up to 25% of the taxes you owe. If you owe $5,000, your penalty will be $1,250.

If you don’t file for more than 60 days, the penalty could be double your tax bill. The penalty compounds monthly until you file. If you completely neglect to pay your taxes and ignore the IRS, the government can start garnishing your wages, placing liens on your property, and start talking about jail time.

And that is what REALLY happens if you don’t file your taxes.

The best thing you can do is to file and pay as soon as possible to avoid building up penalties and interest. Then plan better for next Tax Day by putting a process in place right now to keep up with all your documentation. Check to make sure your withholdings are correct and that you are paying the appropriate amount of estimated taxes.

And, next year, keep an eye on the calendar.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax return and past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtProblems #FilingBackTaxes #TaxReliefPrograms #IRSDebtForgivenes #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp #TaxRELIEF #TaxAttorneys #AuditHelp #BackTaxes

#OfferInCompromise #WageGarnishmentHelp #AuditReliefHelp #SmallBusinessTAXES

HOW OWING THE IRS BACK TAXES CAN DERAIL YOUR TRAVEL PLANS

CP508 PASSPORT DENIED IRS

Are you planning to travel out of the country this summer? We hope you are not in tax debt because that could put a damper on things. Did you know that starting in February 2018, the IRS directed the State Department to deny or revoke passports of those owing $51,000 or more in back taxes?

Well, it did. The official rule is called IRC Section 7345F and lays out all the details.

Losing your passport, not being allowed to renew it, or having your first passport denied for owing taxes can keep you from the beaches at Cancun to the beaches in the French Riviera.

Owing back taxes is already threatens your financial picture. Add in the stress of knowing you owe Uncle Sam money won’t make your vacation any happier. But having no passport is the worst.

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965

IRC Section 7345F - An Overview

In a nutshell, here is what the new rule says.

If you owe legally-enforceable, unpaid back taxes to the tune of $51,000 plus interest and penalties, and

A notice of federal tax lien has been filed, and

All administrative remedies have been exhausted or lapsed

The IRS will certify that debt to the State Department. The State Department will not issue you a passport after that, with some exceptions. By the way, the amount listed above is indexed to inflation, meaning it can change every year.

Also, the IRS can take a different step, issue a levy, and notify the State Department with the same result for you.

On a good note (relatively speaking), the delinquent tax is limited to Title 26 liabilities under the U.S. Tax Code. Any debt collected by the IRS like the FBAR Penalty and Child Support debt is not included in this rule.

Here are a couple of documents you need to know about.

Taxpayer Notification - Notice CP 508C is the written notification the IRS is required to send when it certifies a seriously delinquent tax debt to the State Department. It is posted by regular mail to your last known address. However, it is not sent to your Power of Attorney, so if all your affairs are being handled by a POA, that entity will not learn about this.

Reversal of Certification - Notice CP 508R is the written notification you receive, through regular mail to your last known address, that tells you the IRS is reversing the certification shown in 508C. It means the debt is fully satisfied or cannot be legally enforced, it is no longer seriously delinquent, or the certification was in error.

Understand that this can take time, so even if the certification is in error, it will still take the IRS around 30 days to make the reversal and provide notification to the State Department “as soon as practicable.”

HOW THE RULE IMPACTS YOU

First of all, you lose your passport, and it will take a while to get it back, no matter what. The new tax law passed in 2015 included language about passports. It requires the State Department to deny passports to anyone who owes the IRS a significant amount of money.

No new passport application will be processed.

An expired passport will not be renewed.

A current passport may be revoked or limited.

If you attempt to travel out of the country, you will not be allowed out of the country until you fix the problems with your back taxes. You may lose the money you paid for the vacation, too. If you have any idea that you have tax problems of this magnitude, check with the travel agencies and ticket offices about the chances for a refund or trip insurance.

WHAT CAN YOU DO IF YOU LOSE YOUR PASSPORT FOR BACK TAXES?

On another relatively good note, you aren't expected or required to pay the entire tax debt to get your passport back. You have quite a few options, in fact. Most of these will keep the IRS from sending the notification to the State Department in the first place if you take action as soon as you know of the tax debt.

You can pay the taxes in full, and be done with it.

You can set up an installment plan with the IRS to pay your debt over time. Just be sure to keep up timely payments.

You can go for an Offer-in-Compromise, which is a method of cutting your tax bill. However, there are restrictions to who can receive an Offer-in-Compromise, so see someone like us, Advance Tax Relief

You can show the Notice CP 508C is erroneous (issued in error).

As long as you are seen to be taking care of the problem, you can get your certification reversed and be on your way, if not very quickly. The State Department only places a hold on your application, giving you 90 days to make things right.

A couple of other ways you can resolve the issue include a requested or pending collection due process appeal with a levy or having collection suspended because you have or have requested innocent spouse relief.

If you take no action within 90 days, however, your passport application will be denied.

THE RULE DOESN’T APPLY TO EVERYONE

There are circumstances under which the IRS will not issue a certification to hold up your passport. They include those who…

Are in bankruptcy

The victims of identity theft

Serving in a combat zone

Living in a federally declared disaster area

Have been determined by the IRS to be in hardship and so your account is currently not collectible

With pending offers in compromise or pending requests for installment agreements

Are deceased. Even the IRS admits it can’t collect from someone who is no longer living.

In most of these scenarios, you might question a decision to make summer travel plans of any sort, but we won’t judge. Sometimes travel is necessary. It isn’t always a vacation. Also, the State Department can issue a passport for emergencies or for humanitarian reasons so a U.S. citizen can return from overseas.

Many people don’t realize that this new rule is in place. They find out about it when they receive the notification from the IRS, or when their passports are denied or revoked.

It’s unlikely the federal government will change its mind about this rule. So far, it’s netted them $11.5 million from people settling their debt to receive a passport. Another 114,000 people have signed installment agreements. Passports have proven to be a powerful incentive for people to pay their taxes.

You can avoid the issue entirely by paying your taxes on time or setting up an agreement when you know you can’t pay in full. Don’t wait until the State Department denies your passport to take care of your debt to Uncle Sam.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax return and past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtProblems #FilingBackTaxes #TaxReliefPrograms #IRSDebtForgivenes #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp #TaxRELIEF #TaxAttorneys #AuditHelp #BackTaxes #OfferInCompromise #WageGarnishmentHelp #AuditReliefHelp #SmallBusinessTAXES