Should your really believe those companies that advertise that they can settle your IRS debt for pennies on the dollar?

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Through my years in this profession, that is a commonly asked or thought-about question.

We call these companies “Offer Mills”.  These companies which have no track record or history come in and out rather quickly and are never associated with any individual willing to put his or her name to the company and what the company is supposed to be doing.  This is because these companies tend to make misleading statements and guarantees that they cannot meet.

Many times these companies will not even evaluate your full financial situation at all and tell you what you want to hear just so that can make a profit from you.  Also with these companies you do not know who you are dealing with or where they are at. Which is why after many consumers complain about a particular one of these companies (and post their complaints on the internet), that company will close down and open up another a new name just to make a fresh start but only to follow the same bad path.

The Law Offices Of Jeffrey B. Kahn, P.C. is a law firm specializing in resolving tax problems.  When we say that you are a great candidate for an Offer In Compromise, it is because we have done a thorough evaluation of your case first.  Call our office to make an appointment to meet with our principal tax attorney, Jeffrey B. Kahn, in any of our Los Angeles offices or elsewhere in California who is board certified in tax and fully evaluates your case to determine the best viable option to resolve your tax problems.

Description: The Law Offices Of Jeffrey B. Kahn, P.C. has helped many people avoid collection action by the IRS and State tax agencies. Working with a tax attorney in Los Angeles or elsewhere in California is the best bet for reducing or eliminating the amount you owe.

Taxpayer Scores $862,000 from IRS after Tripping over a Phone Cord

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A taxpayer who met with a Revenue Officer at an Internal Revenue Service office on Long Island successfully sued the IRS for $862,000 after he was injured by tripping over a phone cord.

William Berroyer claimed in his lawsuit that he could no longer play golf or have intimate relations with his wife more than once a month after he fell during a 2008 conference with a Revenue Officer at an IRS office in Hauppauge, NY, according to the New York Post. He had visited the IRS to work out a payment agreement for a $60,000 tax bill when he tripped on the phone cord and fell against a cabinet.
After leaving the IRS, he telephoned the IRS Revenue Officer from the parking lot to inform him that he had lost the sense of feeling in his leg and was suffering from shoulder pain. He then spent 17 days in hospitals and rehabilitation centers recovering from his injury.

In his lawsuit he claimed $10 million in damages.  Attorneys for the IRS claimed he was exaggerating his injury, but the judge ultimately awarded him $862,000 for pain and suffering. And the big prize is because this was for pain and suffering, he won’t have to pay taxes on the damages!

So now that the IRS has tucked away all their telephone cords, how can taxpayers who owe the IRS avoid collection action?

  1. Offer In Compromise. This is a formal application to the IRS requesting that it accept less than full payment for what you owe in taxes, interest, and penalties. An offer in compromise may allow you to settle back taxes or IRS liability at a substantial discount on the basis of doubt as to collectability, liability, or effective tax administration. In addition, while your offer is under consideration, the Internal Revenue Service is prohibited from instituting any levies of your assets and wages. Most people do not have the necessary skills or knowledge of the IRS collection process to make an offer in compromise that is in their best interest and can be processed by the IRS. Government figures show that 75% of offers are returned at the beginning due to forms being filled out incorrectly, and of the 25% that are processed, approximately 50% are rejected.
  1. Installment Agreement. Allows you to pay IRS debt in full in smaller, more manageable amounts, usually in equal monthly payments. The amount of your installment payment will be based on the amount you owe and your ability to pay that amount within the time available to the IRS to collect tax debt from you.  However, be aware that because you are financing your liability with IRS, interest and penalties will continue to accrue.  Most installment agreements are set up with level monthly payments but there are also different types and terms of installment agreements which if you qualify may be more suitable for you.  The variations are not publicly offered by IRS – only a seasoned tax attorney would know to ask for them.
  1. Uncollectible Status.  Occurs when the IRS has determined that they are presently unable to collect the taxes from the taxpayer by full payment, through an Installment Agreement or by way of an Offer in Compromise.  Once the account is placed on a Currently Uncollectible (“CNC”) status, the IRS does not pursue collection activity against the taxpayer and the statute of limitations on the tax liabilities will continue to run. Generally, unless the taxpayer’s financial situation changes, the account will remain on a CNC status until the tax liabilities expire. However, if the taxpayer’s financial situation improves the account will be taken off of CNC status so that the IRS can collect the taxes through full payment or an Installment Agreement. CNC although temporary could provide interim relief to taxpayers who all of a sudden run into financial hardship.

A consultation with the Law Offices Of Jeffrey B. Kahn, P.C. can help you determine what the best strategy is for you.

Description: The Law Offices Of Jeffrey B. Kahn, P.C. has helped many people avoid collection action by the IRS and State tax agencies. Working with a tax attorney in Los Angeles is the best bet for reducing or eliminating the amount you owe.

Eliminating Tax Penalties Due to Reasonable Cause

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If you have made a mistake on your tax return that is later discovered by the IRS, you will be charged interest on the amount you owe. In addition, the IRS has the discretion to assess penalties requiring you to pay extra. But this doesn’t mean that you will have to pay these penalties. Working with a tax lawyer in Los Angeles or elsewhere can help in getting the penalties reduced or even dropped.

About one-third of all IRS penalties are abated and your odds of having your penalties dropped are much higher if you work with a tax attorney on your case. In order to convince the IRS to remove the penalties they have imposed, you need to convince them of special circumstances that lead to “reasonable cause” for you to not have made a correct filing initially.

This goes beyond just admitting that you made an honest mistake. Here are a few of the scenarios that the Law Offices Of Jeffrey B. Kahn, P.C.  know that the IRS will consider to be reasonable cause for an erroneous tax filing:

  • A death or serious illness in the family.
  • Incorrect advice given by an IRS agent in person or over the phone.
  • The loss of records because of a fire or natural disaster.
  • An error made by your tax preparer.

If you feel that you are being unfairly punished for a problem with a tax filing that was beyond your control, your best bet is to contact an IRS attorney from our firm who can review the facts in your case.

An experienced attorney with the Law Offices Of Jeffrey B. Kahn, P.C. may be able to help you get your tax penalties reduced or eliminated. Learn about the circumstances a tax attorney can use to plead your case with the IRS.

The Importance of Avoiding Tax Liens

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If you have recently received notice that there is a tax lien against your home, you need to quickly contact a tax lawyer for IRS tax help. Receiving official notice from the IRS about a tax lien against your home means that the government has placed a legal claim against your home as a form of leverage to attempt to secure its interest in your assets to satisfy past tax debts. While this doesn’t mean that the IRS is going to take over your home and evict you, it does have some potentially negative consequences.

With the current housing market, tax attorneys in California often have to deal with helping homeowners get a tax lien removed so they can sell or refinance their home. The easiest resolution of this problem is where the proceeds of the sale or refinancing can fully satisfy the lien at closing.  If this isn’t possible for financial reasons, an experienced tax attorney at the Law Offices Of Jeffrey B. Kahn, P.C. can request the IRS to release or subordinate the lien to allow the transaction to proceed if it can be shown that the IRS would be in no worse position by allowing the sale or refinancing to go through.

Once a tax lien is filed, it will stay on your credit history for seven years.  However, the Law Offices Of Jeffrey B. Kahn, P.C. can help you negotiate a resolution through the IRS Fresh Start Program which offers a one-time way to get this mark removed from your credit.

If you are in danger of having a tax lien placed against your property, it’s urgent that you speak with an income tax attorney. The experienced tax attorneys in the Law Offices Of Jeffrey B. Kahn, P.C. know how to keep this from happening.

Time Limits on IRS Collection Efforts

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Once you have an assessment our outstanding balance with IRS, the IRS is notorious for aggressively pursuing collection action by issuing levies on your bank accounts and sources of income.  Their efforts though cannot last forever. It’s a little-known fact that the IRS has a Statute Of Limitations on collecting amounts owed to IRS. If you have owed money to the IRS for some time, you might be able to work with a tax attorney to get at least some of your IRS debt erased where the Statute Of Limitations is soon to expire.

Generally, the IRS has 10 years from the date the taxes were assessed to collect any past taxes. If you don’t file a return, the IRS will make a deficiency assessment based on a substitute return they file for you, so don’t expect that not filing a tax return will prevent the 10-year period to start.

Beware that States will have their own Statute Of Limitations for the collection of State taxes.  In California the Statute Of Limitations is 20 years.  If you owe IRS and the State, you can work with tax lawyer in Los Angeles  and use the different Statute Of Limitations to your advantage. A consultation with the Law Offices Of Jeffrey B. Kahn, P.C. can help you determine what the best strategy is for you.

The Law Offices Of Jeffrey B. Kahn, P.C. has helped many people avoid collection action by the IRS and State tax agencies. Working with a tax attorney is the best bet for reducing or eliminating the amount you owe.

Warding Off a Tax Levy with a Payment Plan

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If you owe more in taxes than you can afford, you have several options to avoid going into default and incurring a tax lien or levy. One way to avoid protracted tax levy and lien issues with an IRS lawyer is to enter into a payment plan. Working with the Law Offices Of Jeffrey B. Kahn, P.C. is one of the most effective ways to negotiate a payment plan with the IRS that is right for you.

Depending on how much you owe will drive how much verification information/documents that IRS requires to consider a payment plan.  If you owe more than $50,000 in taxes, the IRS will require full verification of your financial information.  Likewise, if you are self-employed, you can expect the IRS to look at your financial information. No matter how much you owe, the IRS will be looking to set up a payment plan that will erase your debt within 60 or 72 months. If you owe more than you can pay within that timeframe, you’ll want to hire in tax lawyer in Fairfield or elsewhere to work on an Offer of Compromise to potentially reduce your debt.

You have a strong chance of having your payment plan accepted if you owe less than $10,000 and meet certain requirements including:

  • Having filed taxes on time for the previous five years while paying in full and not having requested an installation agreement.
  • Showing the IRS that you are unable to pay your tax bill in full.
  • Agreeing to pay your debt within three years.

Working with a tax attorney lawyer is the best way to assure that you get a payment plan that works for your situation and prevents IRS collection action to be taken against you.

The Pros and Cons of an Installment Agreement

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Owing back taxes doesn’t mean that you have to live in fear of penalties, the garnishment of wages or even criminal prosecution. If you live in the Bay Area and owe back taxes, it makes sense to work with a tax attorney in San Francisco to find a way to settle your debts. The IRS has several options available for taxpayers who owe back taxes and one of the easiest to enter into an installment agreement with the IRS. Before you reach out to a tax settlement attorney, learn a bit more about this option.

With an installment agreement, you pay off your tax debt in monthly installments. It eases the burden on you and allows you to pay off the debt in a comfortable manner. If you fail to make a payment, you do run the risk of going into default; setting up an automatic payment method such as direct withdrawal can help you to avoid this. Most installment agreements are set up with level monthly payments but there are also different types and terms of installment agreements which if you qualify may be more suitable for you.  Before you set up an installment agreement, you’ll want to contact an IRS audit attorney to determine what type of installment agreement would be best.

An installment agreement isn’t always the perfect option. For example, if you owe a large amount of money and can only afford to make minimum payments each month, you might find yourself paying for years without making a major dent into the principal amount that you owe. In this case, an option like an Offer in Compromise might be the better choice for you. Contacting the Law Offices Of Jeffrey B. Kahn, P.C. can help you in evaluating your options.

Using an Offer in Compromise to Avoid a Tax Lien

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Working with a tax lawyer in Los Angeles to reach an Offer in Compromise with the IRS is an effective tool for reducing the amount you owe in federal taxes. It can save you from dire consequences such as a lien against your property or having your wages garnished. If you are seeking an Offer in Compromise to reduce your debt and avoid a tax lien, the Law Offices Of Jeffrey B. Kahn, P.C. wants to let you know some variables that the IRS will consider when evaluating your case:

Health: If you have recurring health issues that are keeping you from earning a steady paycheck. The IRS might consider this as a factor in reducing or even eliminating the amount you owe in taxes. This may also happen if you are caring for a seriously ill dependent.

Age: People who are nearing or past retirement age will have less prospects for earning money in the future; this will mean that a tax relief attorney can sometimes successfully argue for the IRS to collect a smaller amount upfront to settle the debt since there is no guarantee of long-term future payments.

Amount of Offer: Working with a tax attorney can help you to greatly reduce the amount of your tax debt whereby you can settle for “pennies on the dollar”.  Because every potential Offer In Compromise is different, an offer amount that would be suitable for one taxpayer may not be high enough for another taxpayer.  That is where professional guidance from the tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. comes in handy as we can set the balance between paying the lowest amount possible to the IRS with providing an Offer that the IRS would be interested in accepting — even though it’s for a small percentage of the total amount owed.

IRS Increases User Fee For Establishment Of Payment Plan

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Effective January 1, 2014, the user fee charged by IRS to establish a payment plan has been increased from $105.00 to $120.00.

If you cannot pay all that you owe now and do not qualify for an offer in compromise, an IRS installment agreement may be your next best option. Payment Agreements allow you to pay IRS debt in full in smaller, more manageable amounts, usually in equal monthly payments. The amount of your installment payment will be based on the amount you owe and your ability to pay that amount within the time available to the IRS to collect tax debt from you.  However, be aware that because you are financing your liability with IRS, interest and penalties will continue to accrue.

The IRS has different types of plan available and some even allow the IRS to refrain from filing a Federal Tax Lien which if filed would adversely effect your credit.  Additionally, the IRS cannot levy against your property (1) while your request for a Payment Agreement is under consideration, (2) while your agreement is in effect, (3) for 30 days after your request for an agreement has been rejected, or (4) for any period while an appeal of the rejection is being evaluated by the IRS.

Most people do not have the necessary skills or knowledge of the IRS collection process to propose a payment plan that can meet IRS standards and be within a person’s budget.

The tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. have extensive experience with getting reasonable payment plans processed by the IRS for the lowest possible monthly payment and secure a final acceptance with IRS.

IRS Increases Application Fee For Offer In Compromise

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Effective April 27, 2020, the application fee charged by IRS to apply for an Offer In Compromise has been increased from $186.00 to $205.00.

Established by the Internal Revenue Service, the Offer in Compromise Program is a formal application to the IRS requesting that it accept less than full payment for what you owe in taxes, interest, and penalties.

An offer in compromise may allow you to settle back taxes or IRS liability at a substantial discount on the basis of doubt as to collectability, liability, or effective tax administration. In addition, while your offer is under consideration, the Internal Revenue Service is prohibited from instituting any levies of your assets and wages.

Most people do not have the necessary skills or knowledge of the IRS collection process to make an offer in compromise that is in their best interest and can be processed by the IRS. Government figures show that 75% of offers are returned at the beginning due to forms being filled out incorrectly, and of the 25% that are processed, approximately 50% are rejected.

The tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. have extensive experience with getting Offers processed by the IRS for the lowest possible amount and secure a final acceptance with IRS.