WHAT DO YOU NEED TO KNOW ABOUT IRS PENALTIES AND RELIEF OPTIONS?

Penalty rates vary based on the type of penalty assessed.   For the most common penalties, here are the rates:

Failure to pay:  0,5% per month, up to a maximum of 25%.   this penalty will increase to 1% if the IRS has to enforce collection of the balance owed.

Failure to file:  5% per month, up to 25%.  fraudulent failure to file increases the penalty to 15% per month, up to a maximum of 75%.

Estimated tax:  equivalent to the amount of interest lost to the IRS by not making timely payments throughout the year.

Accuracy:  20% of the understatement of tax.  Fraud increases the penalty to 75%.

The most common abatable penalties are failure to file and pay penalties:  taxpayers have several options to request abatement (relief after the penalty is assessed) for the failure to file and pay penalties, including first-time abatement and reasonable cause arguments.

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Disaster penalty relief is usually applied automatically by the IRS:  taxpayers who live in Presidentially declared disaster areas (identified by zip code) will automatically receive the stated late filing and payment relief.  If this relief is not provided automatically, the taxpayer can contact the IRS to request relief.

Most penalty abatement requests are for first-time abatement:  taxpayers with a clean compliance history (no penalties in prior three years (except for estimated tax penalty), all required returns filed, compliant with any payment agreement related to any debt owed) can use first time abatement to remove the failure to file or pay penalty. First time abatement does not apply to accuracy penalties.

There are do’s and don’ts when requesting relief due to reasonable cause:   there are certain arguments that are a non-starter for reasonable cause abatement.   For example, using “reliance on my tax preparer” is never a good excuse for late filing.  The IRS will always deny it.  However, an unforeseen illness, lack of records, and other reasonable cause arguments can be successful. Taxpayers using any reasonable cause argument should always show how they made a reasonable attempt to comply but could not because of circumstances that were outside of their control.

Many penalty abatement requests are denied – requiring the taxpayer to appeal the adverse decision:  the IRS uses an automated decision-making tool to make penalty relief determinations.  This tool is flawed and often produces incorrect adverse penalty determinations.  Taxpayers often receive adverse penalty abatement determinations that appear not to consider all of the facts and circumstances.   Taxpayers should appeal their decision to the IRS in order to have the entirety of their circumstances considered.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or 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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THE IRS IS COMING TO YOUR HOME OR OFFICE TO DISCUSS PAYING YOUR DELINQUENT TAXES!

IRS To Begin Unannounced Visits to Delinquent Taxpayers!

Where we discussed that the IRS has announced, in Fact Sheet 2019-15, that it will begin visiting taxpayers who have ongoing tax compliance issues.

The IRS will focus its efforts in areas where there have been a limited number of revenue officers available due to declining IRS resources.

THE FIRST FACE-TO-FACE CONTACT FROM AN IRS REVENUE OFFICER MAY BE ALMOST ALWAYS UNANNOUNCED

During the visit, the revenue officer will interview the taxpayer to gather financial information and tell the taxpayer what he or she needs to do to become and remain compliant with the tax laws.

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

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Now in Information Release 2020-34 and Fact Sheet 2020-2, IRS has announced that it is increasing the use of data analytics, research and new compliance strategies, including personal visits, to reach taxpayers and tax return preparers who have not filed federal tax returns.

Following the recent and ongoing hiring of additional enforcement personnel, IRS revenue officers (ROs) across the country will increase face-to-face visits with high-income taxpayers who haven't filed tax returns in 2018 or previous years.

These visits are primarily aimed at informing these taxpayers of their tax filing and paying obligations and bringing these taxpayers into compliance.

IRS advises taxpayers that have delinquent filing or payment obligations that they should consult a competent tax advisor before waiting to be contacted by an RO.

IRS notes that high-income taxpayers who will receive these visits have typically received numerous letters from IRS over an extended period of time, so they generally realize they have a tax issue.

Here's what to look for when a legitimate IRS RO makes a face-to-face visit:

While most RO visits to a taxpayer are unannounced, ROs will always provide two forms of official credentials, both include a serial number and photo of the IRS employee. Taxpayers have the right to see each of these credentials.

A legitimate RO will explain the liability to the taxpayer, along with the consequences of failing to comply with the law. The IRS employee will not make threats or demand an unusual form of payment for a nonexistent liability.

Visits by ROs generally occur after numerous contacts by mail about an existing tax issue; taxpayers should be aware they have a tax issue when these visits occur.

The RO will request payment and will provide a range of payment options, including paying by check made payable to the U.S. Treasury.

IRS also announced that it is using the following new ways to leverage existing processes and systems:
Increasing the identification and case creation for individual and business non-filers. New cases will be assigned to IRS employees for appropriate resolution.

Automated Substitute for Return program (ASFR). This affects individual taxpayers who have not filed tax returns, but whose available income information shared with IRS indicates a significant income tax liability. As part of the ASFR program, IRS sends notices to these taxpayers alerting them to the potential liability.

Automated 6020(b) process. Promotes employment tax filing compliance by identifying business taxpayers with employment tax requirements who have not filed for a specific period.

Delinquent Return Refund Hold program (DRRH). Systemically holds an individual taxpayer's income tax refund when their account has at least one unfiled tax return within the five years surrounding that return.

IRS Reminds Taxpayers That It Has A Number Of Options Available Under The Law When A Taxpayer Refuses To Pay, Ranging From A Series of "Civil Enforcement"
Actions And, When Appropriate,
Pursuing Criminal Cases Against Taxpayers.

GET TAX RELIEF HELP TODAY
If you think that you may need help filing your 2018/2019 tax return or 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. 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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PAYROLL BACK TAX HELP - FORM 941

Employers are required to withhold payroll taxes from the wages earned by their employees and are required to forward these withholdings to the IRS. Under the Internal Revenue Code, an employer is required to collect, account for, and pay taxes that have been withheld from employees’ wages.

An employer is required to withhold Federal Income tax, Social Security tax and contribute a portion of Social Security tax as well. These withholdings must then be deposited at a bank for transfer to the IRS. Additionally, if the business has employees with an active payroll, the business is required to file quarterly a Form 941, Employer’s Quarterly Federal Tax Return, and annually a Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.

Failing to properly file and pay payroll taxes is a serious matter. If the employer fails to timely file and pay payroll taxes, the IRS is authorized to collect these taxes from the business or even a person or persons who are responsible for withholding and paying these payroll taxes to the IRS. The IRS typically employees Revenue Officers to work on collecting payroll taxes and to investigate the financial health of the business. Failure to correct a delinquent payroll tax matter could result in the closure of the business and liquidation of the business assets.

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

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
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CALL (713)300-3965

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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THINGS TO KNOW ABOUT IRS WAGE GARNISHMENT AND HOW TO GET A RELEASE..

When taxpayers owe the IRS and are not in an arrangement to pay (extension to pay, payment plan, currently not collectible status, or an offer in compromise), they can be subject to a levy of their income and assets.  One of the most common forms of levy  is the “wage garnishment.”  Since July 2018, the IRS has started to increase the number of wage garnishments to taxpayers who do not make arrangements with the IRS.

IRS started issuing more wage garnishments on July 17, 2018

Some insights and tips on garnishments

With more garnishments in place, here are insights and tips taxpayers need to know about IRS wage garnishments and how to get them released:

The IRS knows where you work.   The IRS knows a taxpayer’s income sources and most financial account information.  The IRS collects all income sources from employers from prior year’s wage and income information returns (i.e. Forms W-2 and 1099).  The 

IRS issues wage garnishments using this information on file from the most previous tax year. 

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

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The IRS usually provides 5 notices, over several months, before issuing a garnishment.  These notices, called the IRS collection notice stream, provide the taxpayer several attempts to pay or get into a collection alternative with the IRS.  Once a garnishment is issued, the IRS is usually inflexible about releasing it because the taxpayer has been given numerous changes to pay or enter into an agreement to avoid the garnishment. 

Surprise!  Your employer will notify you of the garnishment.  The IRS does not provide the taxpayer notification that a garnishment has been issued.  The IRS issues it directly to the employer who notifies the taxpayer of the garnishment.

There are 3 ways to release a garnishment.  There are three reasons that the IRS removes a wage garnishment:  pay the balance in full, enter into a collection agreement, or prove to the IRS that the garnishment is causing a hardship.  Most enter into a collection agreement.

Filing compliance is required.   This means, you better have all of your required tax returns filed.  Unless the taxpayer is in hardship, the IRS is reluctant to release a garnishment if the taxpayer has not filed all past, required returns (usually the current and past 6 years).  Sometimes, the IRS will allow the taxpayer to use an extension to pay to release the levy if the taxpayer can show that the prior years will be refunds and they promise to file immediately,

Insider tip:  You can use an extension to pay (ETP) to remove a wage garnishment.   If the taxpayer has not used a prior extension to pay agreement, the IRS will usually allow the taxpayer to use the ETP agreement to release the levy.  However, if the taxpayer has not followed through on past agreements, the IRS is less likely to allow the ETP for a garnishment release.

The garnishment stays in place until released.  Good news – the IRS will not take 100% of the wages. The bad news: the wage garnishment will continue until all balances are paid or the taxpayer gets into an agreement with the IRS and the IRS sends a garnishment release to the employer.

Need to work with IRS Collection because you are under IRS enforcement.   The IRS is enforcing collection of back taxes.    A  Wage garnishment is a serious matter.  The garnished taxpayer is assigned to IRS collection for enforcement of unpaid taxes. 

Taxpayers will need to work with the IRS Collection function for a release.   Also, further enforced collection can occur- likely in the form of a Notice of Federal Tax Lien.  It is unlikely that the IRS will also issue additional levies – such as a bank account levy – unless the taxpayer is assigned to an IRS revenue officer for local field collection.

 Can’t put food on the table?  The taxpayer can request expedited release of a garnishment due to economic hardship.  Taxpayers who cannot meet their basic living expenses and can provide the IRS evidence of hardship can ask for a hardship release without getting a collection agreement.  However, in practice, this process can take some time, especially if the initial IRS reaction is “we need more information about your hardship before we can release the garnishment.”   Most times, it is best for the financially stressed taxpayer to request currently not collectible status or even request 

an offer in compromise – both will release the garnishment.   

Use the fax for an expedite garnishment release.   Once the taxpayer qualifies for a release, the fastest way to get the release to the employer is to ask the IRS to fax it to the employer while on the call.  (Note: a garnishment release by mail can take 7-10 days). The taxpayer should be prepared to provide the IRS their employer’s phone, fax, and payroll contact information for the IRS to release the garnishment while on the call.  Taxpayers should always follow up with the employer to make sure the release is received. 

The IRS has a Christmas spirit.   Traditionally, the IRS does not issue wage garnishments during the last three weeks of December.   Clearly, the IRS has a heart here – but there are other motives.  The IRS does not have a lot of resources available to arrange for a collection agreement and garnishment release during Christmas time.  There are usually many IRS employees on vacation during the latter part of December.  One word of warning:  the wage levy holiday moratorium does not include bank levies.  Taxpayers are still subject to a bank levy.

The Taxpayer Advocate (TAS) can help, a little.  TAS can help if the taxpayer is suffering a financial hardship. But ultimately, a wage garnishment is under the jurisdiction of IRS Collection.  TAS can make recommendations and expedite hardship requests, but IRS Collection makes the final decision on releasing the garnishment.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or 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.

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief