DO TAXPAYERS GO TO JAIL FOR NOT PAYING TAXES?

Back Taxes, Tax Returns, Offer In Compromise, Tax Relief, Tax Attorneys

You forgot to pay your taxes one year. Then one year turned into several years. You don’t have the money to pay what you owe, and now you’re wondering if you can go to jail for not paying taxes.

The short answer is maybe. You can go to jail for not filing your taxes. You can go to jail for lying on your return. But you can’t go to jail for not having enough money to pay your taxes. To better understand these distinctions, let’s take a closer look at when you risk jail time for failing to pay your taxes.

Criminal Vs. Civil Proceedings

Making an honest mistake on your tax return will not land you in prison. For that matter, most tax liability is civil not criminal. If you’re audited and it turns out you owe, a civil judgement is placed against you to collect the remaining money.

You can only go to jail if criminal charges are filed against you, and you are prosecuted and sentenced in a criminal proceeding. The most common tax crimes are tax fraud and tax evasion. Tax evasion occurs when you use illegal methods to avoid taxes. Claiming more children than you have is an example of a fraudulent action. Tax fraud involves intentionally trying to deceive the IRS. This is different than a taxpayer being confused by the tax form and placing numbers in the wrong line.

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Actions That Can Land You in Jail

The IRS is much more forgiving with people who can’t pay as opposed to non-filers who don’t pay. So late filing penalties are much higher than late payment penalties. The IRS will not put you in jail for not being able to pay your taxes if you file your return. The following actions will land you in jail for one to three years:

Tax Evasion: Any action taken to evade the assessment of a tax, such as filing a fraudulent return, can land you in prison for 5 years.

Failure to File a Return: Failing to file a return can land you in jail for one year, for each year you didn’t file.

Helping Someone Evade Taxes: Helping someone else get out of paying their taxes can carry a three to 5 year prison sentence depending on what action is alleged.
Statute of Limitations for Criminal Charges

If the government is going to file criminal charges against you for failing to pay your taxes, it needs to act fast. Depending on the exact nature of the alleged wrongdoing, criminal charges must be brought within three to six years of the violation.

Remember, the clock doesn’t start running until you file your return. For example, if you owe the IRS money on a 10-year past due return you never filed, you can still be criminally charged with tax evasion. However, if you filed a return 10-years ago but never paid the associated taxes, you cannot be criminally charged.

Can’t Pay? Consider a Payment Plan

If you owe more in taxes than you can afford to pay, you have better options than simply not paying.

Individual Installment Agreement: If you owe less than $50,000 in tax, interest and penalties combined, you can set up a plan that allows you to pay down over time, with regular monthly payments. If you owe more than $50,000, you can still arrange an installment agreement, there’s just more paperwork involved. You’ll need to provide the IRS with detailed information on your assets, such as real estate and investment accounts, as well as household expenses.

Offer In Compromise: This is an agreement between you and the IRS to settle your tax liability for less than the full amount owed. It’s generally not an option when the IRS thinks you are able to pay down your debt through a payment plan. This analysis is known as establishing your “reasonable collection potential.”

Get Legal Help with Tax Questions

Failing to comply with IRS or state taxation rules can result is serious civil and criminal penalties. And the longer your taxes go unpaid, the more serious the situation becomes. It's a good idea to contact an experienced tax lawyer who can advise you on how best to proceed in resolving your situation.

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.

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IRS BACK TAX NEGLIGENCE PENALTY AND WHAT YOU CAN DO

IRS BACK TAX NEGLIGENCE PENALTY AND WHAT YOU CAN DO

Tax Liens, Negligence Penalty, Tax Returns,

If you’re in an audit or got an IRS CP2000 notice, you may also get a penalty if the IRS changes your tax return and says that you owe more taxes. This penalty is called an accuracy penalty.

There are two types of accuracy penalties that many people see in audits and CP2000 notices:

Negligence penalty
Substantial understatement penalty
The negligence penalty is 20% of the amount you underpaid
This is a steep penalty, and the IRS usually charges it (or, “assesses” it) when taxpayers overstate their deductions or don’t report all their income. Negligence is defined under the law as any failure to make a reasonable attempt to comply with the tax laws. The IRS may impose the negligence penalty if it decides that a taxpayer’s negligence or disregard of the rules or regulations caused an underpayment of taxes.


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The IRS charges this penalty on a case-by-case basis, depending on the specific changes the IRS is making to your return.

The IRS is likely to assess a negligence penalty if:

Your tax return didn’t include income from an information statement, like Form 1099-MISC.
You didn’t make a reasonable attempt to confirm whether you were entitled to claim a deduction, credit, or exclusion on your return – one that a reasonable person would think was “too good to be true” under the circumstances.
You’re under audit and you don’t have records to support your tax return items.
It’s best to contest the penalty before the IRS officially assesses it
It’s a good idea to argue against a negligence penalty after the IRS proposes the penalty, but before the IRS assesses it. If you wait for the IRS to officially assess the penalty and send you a Statutory Notice of Deficiency (usually a Letter 3219), your only option is to take your case to U.S. Tax Court.

To request “penalty non assertion,” you’ll need to respond to the IRS and make your case.

With CP2000 notices, contest the penalty in your first response to the CP2000.
In an audit, protest the penalty while dealing with the IRS auditor. You can also appeal IRS penalties proposed in an audit with the IRS Office of Appeals. But you’ll still have to do that before the IRS officially assesses the penalty.
Show that you tried to comply
With negligence penalties, you can’t ask for first-time penalty abatement. The decision on whether a negligence penalty applies lies in your honest and reasonable attempt to comply and file an accurate return.

You’ll have to show that you made a reasonable attempt to comply with the law, but because of unforeseen circumstances, you couldn’t comply.

Some factors in your defense might be:

You relied on an incorrect information statement, such as Form W-2, 1099, K-1, etc.
You relied on incorrect information in good faith (for example, an incorrect adjusted basis of stock shown on a brokerage statement).
You reasonably relied on a competent tax professional or other third-party advice.
You relied on advice from the IRS.
You have legal authority that supports the tax treatment (and the tax position is adequately disclosed, if applicable).
You were ignorant of or honestly misunderstood the law or a fact.
You made an isolated computational or transcriptional error.
When you argue the penalty, include as many details as possible and provide all the factors that apply to your situation. Learn more about how to handle IRS penalties.

How to get help
An experienced tax professional can also provide a lot of value in this process, especially when it comes to referencing the applicable tax law and/or court cases in support of your argument. Your tax pro can also request non assertion of the negligence penalty from the IRS for you.

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.

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TAX LIENS ON MY IRS BECAUSE I OWE BACK TAXES

Tax liens, Back Taxes, Tax Attorneys

Here is a situation from a reader showing why location counts when it comes to Federal tax lien filings:

The IRS has filed a tax lien against me where I live in Hamilton County, Ohio.  But I own real estate in North Carolina, and there are no tax liens filed against me there.  Does the IRS have to file a lien in the county where I live or where I own property for it be effective?

A federal tax lien is only effective against your property if it is filed in the proper place.

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If you own real estate, the IRS must file their Federal tax lien in the county where the real estate is located.  If the IRS files a lien in the correct county – where the rental property is located – that lien encumbers the property in a manner similar to your mortgage.

Your place of residence is irrelevant to the effectiveness of a tax lien against real estate.

In your situation, the IRS filed their lien where you live, not where the real estate is located.  This means that if you have $50,000 of equity in the property, you can sell or refinance it without the direct interference of the lien.  The IRS is not secured on the property as the lien is filed in the wrong county.

The IRS may not know you have the property.  Depending on where you are in the collection process, it is possible they only know where you live.  That likely explains why the lien is filed in the wrong place.

I do recommend caution in how you use the property and any equity.

The IRS may consider accessing and spending the equity to sources other than the government to be a case of dissipating assets.  A dissipated asset is one that has been sold, transferred or spent in a way that is detrimental to paying the IRS. It depends on the facts and circumstances – for example, using the equity to pay reasonable living expenses is different than giving it to a friend to hold.  In an offer in compromise, the IRS can include dissipated equity – money you no longer have – in the settlement.

The filing of a tax lien in the wrong county can be to your benefit.  But it is important to handle the situation properly so as not to give the IRS a claim of dissipating assets.

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.

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HOW YOU CAN FILE YOUR BACK TAX RETURNS

Tax Preparation, Tax Relief Help, Tax Attorneys 

Step 1: Gather your tax documents

To file your back tax returns, you will need the W-2s or 1099 forms you received for those tax years to report your income. If you are eligible for deductions and credits, you must also gather any receipts or other supporting records that prove your eligibility to claim them.

Step 2: Request missing documentation

If you are missing any of your tax documents from the last 10 years, you can request a copy from the IRS by filing Form 4506-T, Request for Transcript of Tax Return.

Use this form only to request W-2s, 1099s and even 1098s that may provide support for some of your deductions.

Though you will not receive a duplicate of the original form, the IRS will provide you with a transcript of all relevant information, which is sufficient for filing your back tax returns.

It can take the IRS up to 45 days to process your request.

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

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Step 3: Download prior year IRS tax forms

You must always file your back tax returns on the original forms for each tax year you are filing. You can always search through the IRS website for the forms, but for quicker access, you should use sophisticated tax preparation software. 

Step 4: Prepare your back tax returns

You cannot complete prior year tax forms using instructions from the current tax year.

The tax law changes every year, and using the wrong instructions may require you to prepare the return over again.

Double check to make sure that the instructions you are using are for the same tax year as the tax return you are preparing.

Step 5: Submit your forms

Submit the forms to the IRS at the address listed in the Form 1040 instructions.

If you owe additional income tax for any of the prior years, remember to include as large of a payment as you can to reduce your interest charges.

Unlike tax penalties which stop accruing when the maximum is reached, monthly interest still accrues indefinitely until the tax is paid.

Once the IRS receives your tax returns, you should expect to receive notice of the exact penalty and interest charges you are responsible for.

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.

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IRS FRESH START PROGRAM FOR BACK TAX DEBTS - WHAT IS THAT?

When you owe the IRS a substantial amount of money, you might wonder how you can get it paid in full without incurring costly interest and penalties. Rather than going deeply into debt, you could pay off what you owe affordably by making use of the IRS Fresh Start Program. You can decide if this program is right for your tax debt situation by learning what it is and how to apply for it today.

What is the IRS Fresh Start Program?

The IRS Fresh Start Program is a program that is designed to allow taxpayers to pay off substantial tax debts affordably over the course of six years. Each month, taxpayers make payments that are based on their current income and the value of their liquid assets. By the end of six years, their tax debts should be paid off in full.

This program simplifies the process of paying back hefty tax debts. It also helps people avoid many of the burdens of owing a tax debt to the IRS including:

Interest
Penalties
Tax liens
Seizure of assets
Wage garnishments

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

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People who owe a tax debt of $50,000 or less to the IRS are qualified to initiate the Fresh Start repayment process at any time. When they apply for this program, they can choose one of three repayment options that are available to them.

The IRS initiated its Fresh Start Program in 2008 and expanded it in 2012 to ease the financial burdens of taxpayers who owe up to $50,000 in taxes. It is available to both business owners and individual taxpayers.

Moreover, the premise of its design took into consideration the hardships faced by people who experience circumstances like unemployment. Taxpayers who are unemployed for longer than 30 days may be eligible to have their IRS penalties waived. They also could have requested a six month extension to file and pay their taxes without fear of costly IRS penalties.

Repayment Options under the IRS Fresh Start Program

The IRS Fresh Start Program offers three repayment options to taxpayers. All three options allow people to pay off their tax debts legally and satisfactorily. They also allow people to avoid further penalties and interest that could cause undue financial hardships.

The first option available to people is called an extended installment agreement. An extended installment agreement is designed for people who owe $50,000 or less to the IRS. It grants taxpayers up to six years to pay off what they owe without incurring additional penalties and interest. It also stops IRS collection activities like wage garnishments, tax liens, and seizure of assets.

This option is one of the most commonly utilized under the IRS Fresh Start program. The payments that taxpayers make each month will be based on how much money they currently make along with the value of the assets they have at their disposal. The payments are designed to be affordable so taxpayers can make them on time and without financial difficulties each month.

The second option is called an Offer in Compromise or OIC. An OIC is a rare but entirely possible choice for taxpayers to pay off what they owe to the IRS.

With an OIC, a taxpayer essential makes an offer to settle the tax debt for less than what he or she owes. Sometimes this offer is substantially lower than the actual value of the tax debt.


If you want to make an OIC to the IRS to pay off your debt, it is important that you make a reasonable offer, one that accurately reflects your current financial situation. Because the IRS accepts OICs on an infrequent basis, you may fare better to have a tax professional prepare and submit your offer to the IRS on your behalf. A tax professional can file the appropriate IRS forms and accurately report your financial situation so the OIC will be given its due credence and potentially accepted faster.

The last option is called a tax lien withdrawal. This repayment choice is available for taxpayers who agree to pay off their entire tax debt through a direct debit repayment option.

Once they are set up on the direct debit repayment plan, taxpayers can formally request in writing to have the tax lien withdrawn from their accounts. People who receive the withdrawal may have avoid having it reported to the three credit reporting agencies.

If you are unsure of what repayment option to request under the IRS Fresh Start Program, you may want to hire a tax professional to advise you. Your tax professional can also file the needed IRS forms and assist you in applying for and getting set up on the repayment option that best suits your current finances.

Applying for the IRS Fresh Start Program

To apply for the IRS Fresh Start Program, you are required to follow the guidelines established by the IRS. You first must file all of your back and current tax returns.

You cannot request any of the repayment options if you have outstanding tax returns that you have yet to file. You also must resolve to file all of your future returns on time while you are enrolled in the Fresh Start Program.

Once you file all of your tax returns, you can then go to IRS.gov to enroll in the program using the Online Payment Agreement tool. This tool allows you to select the repayment option in which you are interested. If you prefer not to enroll online, you can request to be part of the IRS Fresh Start Program by filling out and submitting IRS Form 9465, which can be found on IRS.gov.

Enrolling in the program can be a complex undertaking that you might not understand or be prepared to see through to the end. To ensure you are enrolled successfully in the repayment plan of your choice, you may want to hire a tax professional to assist you.

A tax professional can assist you in disclosing all of the requested information like how much you earn and the value of your assets. A tax professional can also help you avoid disclosing information that could be used against you in a criminal investigation or audit. He or she can advise you on the best repayment option to pursue and guide you in applying for and being accepted for it.

Paying a substantial tax debt can put undue hardship on your finances. You can avoid going into debt and settle your debt more affordably when you take part in the IRS Fresh Start Program. A qualified tax professional can assist you in choosing the best repayment option for your finances today.IRS

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.

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TIPS TO GET BACK ON TRACK WHEN YOU HAVEN’T FILED BACK TAX RETURNS

Tax Preparation, Small Business Back Tax Debts, Tax Relief, Tax Attorney

Sometimes, people don’t file tax returns because they can’t pay. Other times, life happens, and they can’t get everything together in time to file. Regardless of the reason, not filing a required return is serious business for the IRS.

But there’s a way to get back in good standing: Gather all your information, research your IRS account, and file the returns. A tax pro can help you investigate which returns you need to file and how to submit them to the IRS.

“How many years back should I file?”
This is the most common question people with back tax returns ask. The answer lies in a little-known IRS policy statement.

IRS Policy Statement 5-133, Delinquent Returns – Enforcement of Filing Requirements, provides a general rule that taxpayers must file six years of back tax returns to be in good standing with the IRS. The policy also states that IRS management would have to approve any deviation from that rule.

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Sometimes, IRS managers will require tax returns from even further back than six years, depending on the situation. These are the most common reasons the IRS requires returns from more than six years back:

There’s a large potential tax bill on the older returns. The most common red flags are Forms 1099-MISC, property sales, and large wages with no withholding.

There are business returns involved. The IRS will closely scrutinize business returns because the IRS knows that businesses have the largest potential for noncompliance.

A revenue officer is on the case. Delinquent-return investigations can involve local field collection personnel (called revenue officers), who perform in-depth investigations on nonfiling and collection.

Remember these tips when you’re filing back tax returns.

1. Confirm that the IRS is looking for only six years of returns.
Call the IRS, or your tax pro can use a dedicated hotline to confirm the unfiled years.

2. The IRS doesn’t pay old refunds.
You can only claim refunds for returns filed within three years of the due date of the return. Everything before that is lost.

3. Transcripts help.
It’s important to prepare an accurate return that matches IRS records. Trace your income history and request your wage and income transcripts from the IRS. Make sure your return reports all items on the transcript. Without this match, the IRS can question the accuracy of your return. If you made estimated tax payments that you can credit to any tax balances you owe, request your account transcripts to verify the amounts you paid.

4. There can be hefty penalties.
Years with tax balances due will have penalties, such as the failure to file and failure to pay penalties. These penalties combined can accumulate, over time, up to 47.5% of the tax bill.

5. Request penalty abatement, if applicable.
Good news: With most back tax returns, you can ask the IRS not to charge you failure to file or pay penalties on balance-due returns. Use first-time abatement for the first year if you qualify. Otherwise, consider reasonable cause arguments for late filing and payment to get some relief from penalties.

6. The IRS may have filed a return for you.
The IRS usually starts this process, called a substitute for return (SFR), about three years after the due date of the return. When you file a return to replace an SFR, the IRS will closely scrutinize the replacement return and compare it to information statements on file. Because of that scrutiny, the IRS will take more time than usual to process the replacement return – more than four months in some cases.

7. Delinquent returns may need special processing.
If you have gotten a delinquent-return notice or an SFR in the past, you’ll need to file the return with specific IRS units for special processing.

8. If you owe and can’t pay, set up a payment agreement with the IRS.
Remember to get into an agreement if you can’t pay. There are several types of agreements, depending on what you need. If you don’t establish some type of payment plan with the IRS, a second wave of IRS enforcement – collection – will follow.

9. Authorize your tax pro to help.
You can sign an authorization to allow your tax pro to call the IRS to get information and transcripts for you – or you can sign an authorization to allow your tax pro to handle the entire issue with the IRS for you. Also, you or your tax pro can request a stay on enforcement activity, and follow up to ensure the IRS accepts the return.

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.

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief
 #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp #TaxRELIEF #TaxAttorneys #AuditHelp #BackTaxes #OfferInCompromise #WageGarnishmentHelp #AuditReliefHelp #SmallBusinessTAXES

WHEN YOU RECEIVE A FINAL NOTICE OF INTENT TO LEVY: PREPARE FOR IRS ENFORCED ACTIONS

Final Notice Of Intent To Levy, Back Tax Help, Wage Garnishment, Bank Levy, Asset Seizures, Tax Attorney Help, IRS LT11 NOTICE

Before the Internal Revenue Service (IRS) can take any 'enforced collection action' - what most people refer to as garnishments or levies of wages and bank accounts - the IRS must first mail out a letter to a taxpayer called a Final Notice of Intent to Levy (Notice CP 90).

To whom does it apply?

If you owe the IRS back taxes, there is a series of letters that IRS sends out.

First, a CP501, which is as friendly as IRS notices get.
If the bill remains unpaid, then a CP503 warning that collection action could take place.
If the bill is still unpaid or no arrangements have been made to settle the tax debt, then IRS will send a CP504, which is a "Notice of Intent To Levy."


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The CP504 compared to a Final Notice of Intent to Levy

Confusing matters is that the CP504 is not a Final Notice of Intent to Levy. While the IRS can intercept state refunds at this point, they can not take any other actions. So often, a CP504 will lull a taxpayer into a false feeling of safety. After all, they think, a levy notice was issued and the IRS must not been ale to find anything to levy.


NOTE: If you dispute your tax bill, you may be able to get the IRS agree to lower it, using something called Audit Reconsideration.

How is a Final Notice of Intent to levy sent?
A Final Notice of Intent to Levy is sent certified mail. Because many taxpayers aren't home at the time the mail carrier arrives, they have to go to the post office to claim it. Of course, many do not. After all, who is terribly enthused about receiving certified mail from the IRS?

Regardless, even if the letter is never claimed, it is still valid. Taxpayers mistakenly assume that there must be a court hearing before the IRS can being levying and garnishing. This is not true. The Final Notice of Intent to Levy is the final notice a taxpayer receives before their world will likely turn upside down.



What does a Final Notice of Intent to Levy Do?

A Final Notice of Intent to Levy is the notice a taxpayer is given that they have 30 days to a right to claim something known as a Collection Due Process hearing. At this hearing, a taxpayer should present something called a "proposed collection alternative," or raise issues why they don't owe the tax, that is, claim innocent spouse relief, or an audit reconsideration. To put it more clearly, a taxpayer can dispute the ability to pay the debt, and/or dispute the validity of the debt.

IRS appeals officers tend to be the best and brightest of the IRS and very grounded in reality and very aware of the incredibly detailed Internal Revenue Manual. They are experts at tax research and usually work methodically. Because of their high level of competence, taxpayers have the right to have a tax attorney or other tax professional represent them at the hearing.


It is important that the collection due process hearing be treated as a legal proceeding. The reason is that if a taxpayer can not find a reasonable solution at the hearing, the taxpayer has a right to take the case to tax court. Most cases fail in tax court because the taxpayer failed to create a record or actually show up at the hearing. They wind up being dismissed because taxpayers did not know how to follow the rules.

What if you missed the 30 day deadline?

If you miss the 30-day deadline to file a Collection Due Process hearing, you have a year from the date of the Final Notice of Intent to Levy to file something called an "Equivalency Hearing." An Equivalency Hearing is just like a Collection Due Process hearing, with one major difference. There is no right to tax court. If an Equivalency Hearing is requested, typically the IRS will not levy or garnish, but are allowed to do so.

What if you miss the 1-year deadline to file an Equivalence hearing?

You may still request a levy to be released provided it is creating a hardship or by submitting a collection alternative such as an Offer in Compromise, an Installment Agreement or Request for hardship status.  You may also be able to file bankruptcy to wipe out old tax debts, despite what some tax resolution companies claim.

Conclusion: Do NOT be afraid

A Final Notice of Intent to Levy should not be treated as something to be afraid of, but rather, an opportunity. It triggers valuable appeal rights that can result in an optimum tax resolution without any levies or garnishments. The key is to pick it up and respond quickly.  Because of the complexities of various programs, it is best to be represented by a tax professional who specializes in tax resolution who can properly present the most favorable aspects of your particular situation.

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.

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

IRS Collections, Back Taxes, Tax Attorneys, Tax Debt Help

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

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.

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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.

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.

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief
 #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp #TaxRELIEF #TaxAttorneys #AuditHelp #BackTaxes #OfferInCompromise #WageGarnishmentHelp #AuditReliefHelp #SmallBusinessTAXES