Tax Attorney Long Island

Many income tax problems start with marriage, divorce and death. Many people who are single file their own return and then don’t worry about owing because they are simply filing a W-2. They either know that they owe or get a refund. A refund is the best thing to get in the mail because no one wants to owe money. But even if you owe money, at least as a single person you know where you stand with the IRS and avoid owing money. Getting married, getting divorced, or experiencing the death of a spouse can leave many people with owing money to the IRS. If your spouse doesn’t declare the right amount of income, divorces you, or even passes away, you may not be able to sort out owed money without the help of a qualified IRS attorney. An IRS Attorney may be the best way to sort out your IRS debt.

When a spouse isn’t honest with someone about their income, money may not be immediately available. A spouse can have unreported income and most people don’t understand that if they file a joint return, they may be responsible for their spouse’s income and have money owing. The money situations don’t stop there. If you let your spouse complete your tax return and don’t look at it, they may declare deductions that you are not aware of. This is okay if the deductions are valid and accompanied by receipts, but what if they aren’t? You may be liable for any deductions that a spouse declares that aren’t allowed by the IRS. Situations like these can last for years and may not go away unless you work with an IRS Attorney.

But it doesn’t stop here. Money issues get more complicated with divorce. When a couple gets divorced, it’s a whole different ballgame. If the fiscal year isn’t complete when the settlement is finalized, you still have to deal with filing. Some divorces are amicable, but many aren’t. April is the time when most estranged couples experience problems with the IRS. Don’t be one of them. If you get divorced, many ex-spouses try to get out of paying money they owe. They create many money issues because they expect an ex-spouse to absorb the cost of what may be owed, or simply don’t make records available for what may be crucial when an audit takes place.

A spouse’s death can be even worse. There may be items that you do not even know about because you may have left the tax preparation up to them. When a spouse dies, you may not be able to find receipts or even records of income and expenditures that may help you settle a claim without problems. An IRS attorney can step in and give you advice that will help you solve any issues that you may have.

Taking on IRS tax debt is a daunting task that presents many confusing issues. The majority of taxpayers are aware of the option to pay their IRS tax debt in full or pay the tax debt in monthly payments or installments. But there is another option, the IRS “Offer in Compromise.” Knowing the steps to success with an IRS Offer in Compromise, also commonly called IRS tax settlement is important, because if your offer is approved you can save thousands of dollars! It can play a critical role in the financial future of any delinquent taxpayer, impacting not only the taxpayer individually, but the financial health and welfare of their family’s future.

Settling Your IRS Tax Debt: In a nutshell, an “Offer in Compromise” is an IRS tax settlement. If you qualify for an offer, you can have your IRS tax debt greatly reduced. However, it’s not easy to qualify for an offer. The IRS will weigh your entire financial situation. If the IRS determines you don’t have enough income to satisfy your debt in full, your offer may be approved. It is your job to prove you can’t pay your IRS tax debt in full, so make sure you do your IRS research thoroughly.

Insider Tip: It’s notoriously hard to have your IRS tax settlement approved, regardless of “how simply or straight forward it may sound.” But there is a secret way to crack the IRS’s code. The IRS has three ways of determining if you qualify for an Offer in Compromise/IRS tax settlement.

The Factors: The IRS may accept the offer based on any of the following:

> Doubt as to Collectability: If you know you cannot pay your IRS tax debt in full, you may qualify. Remember, if you have assets that could be sold to satisfy your debt these must be considered when you make your offer to the IRS.
> Doubt as to Liability: If you think the debt liability does not fall to you, you’re a good candidate for an offer in compromise. But your reasons must be legitimate. Here are three legitimate reasons listed on the official IRS website:

(1) the examiner made a mistake interpreting the law
(2) the examiner failed to consider the taxpayer’s evidence or
(3) the taxpayer has new evidence.

IRS Tax Specialists: Expert IRS tax advisors may give you the edge you need to get your IRS tax settlement approved. Even with some insider knowledge, getting your Offer in Compromise approved by the IRS is difficult to achieve. That’s where IRS tax specialists come in. Tax specialists employ or include Tax Attorneys and Enrolled Agents. IRS tax specialists are experienced in all tax debt issues and know exactly what you qualify for, and how to help you get your Offer approved. They can make the difference in achieving an accepted offer.

It’s Just The Start of Your Road to Recovery: Getting your offer in compromise approved is only the beginning of your road to recovery. When your tax debt settlement is approved you are entering a 5 year contract with the IRS. This “contract” means you have to file your taxes on time for five consecutive years. If you default on a payment or fail to file properly and timely, the IRS can charge you the original tax debt amount plus penalties and interest.

The Tax Man Cometh

By Cheryl L. Ryan & Grey W. Jones

“I am single and I owe the IRS $80,000 in back taxes for tax years 2000 through 2003. I think I probably owe some money to the State of Ohio and I currently make $40,000 per year. I just received a Notice of Levy, which states that the IRS plans to garnish my wages. I know I will be fired, if my employer finds out. What can I do?”

The foregoing is a prime example of the types of tax problems Jones & Ryan encounters on a daily basis. People faced with tax problems and impending levies and/or garnishments are often emotionally distraught – believing that they will lose their homes, their jobs, their marriages. Many are concerned that they will even be sent to jail. Unfortunately, many of their concerns are valid. In this new age of aggressive tax enforcement, losing your home is a real possibility and being sent to jail is not entirely out of the question.

Fortunately, this tax problem does not have to ruin our client’s life. Those of us who turn on the television even just once a week for 15 minutes are aware of the Infamous Offer in Compromise program. This program solves your tax problems for “pennies on the dollar.” Unfortunately, despite what you hear on television, you really have to be in dire straits to qualify for this program. Our $40,000 per year single tax client might, but probably won’t, qualify. It he has any money left over from his paycheck, he can be sure the IRS wants it.

However, many tax clients do qualify for an Installment Agreement, either partial or full. A $40,000 per year single tax client cannot possibly payoff an $80,000 tax debt, especially when penalties and interest continue to accrue. Under these circumstances, a Partial Pay Installment Agreement is likely the best option. This plan allows our tax client to pay the IRS a reasonable sum every month. Many times, the IRS will agree to accept less than the total amount due and forego penalties and interest.

Of course, if our tax client’s income increases, the IRS will likely discover this new-found money and will seek to renegotiate the payment plan. The IRS does realize that everyone needs a place to sleep, as well as certain other basic necessities. In order to negotiate the best payment plan possible, our tax client will need to account for these necessities in agonizing detail. The more money he needs to pay his monthly mortgage, the less money he has in his pocket to pay the IRS. Keep in mind though, the IRS has established national averages for the basic necessities. With an income of $40,000 per year, our single tax client shouldn’t count on being able to remain in his $250,000 home.

The good news is that the IRS has a statute of limitations. The IRS cannot continue to collect from our tax client more than ten years after the tax was assessed without suing him for an extension, which is very rare. In the case of our $40,000 per year tax client, the taxes owing for 2000 were likely assessed sometime around 2002. The IRS has a “drop dead date” in 2012. If it hasn’t collected by that time, our tax client can likely rest easy that the tax debt for that year is gone.

As always, with the good news comes the bad. The State of Ohio does not have a statute of limitations. They can and will pursue our tax client forever. We recently had a client who owned a car dealership over 20 years ago. He failed to pay sales tax in 1982. More than 25 years later, the State of Ohio levied him for the unpaid sales tax. Of course, he no longer had any documentation to dispute the amount they claimed he owed. However, he did have photographs of the dealership, which were taken back in 1982. We were able to produce these photographs to the State of Ohio, in order to document the number of vehicles he really had in his inventory at the time. We were able to reduce his tax debt by over $100,000.

Similar to our car dealer, our tax client who makes $40,000 per year is not without hope. With quick involvement on our part and cooperation from our client, the wage garnishment can be stopped, before the employer has any knowledge of it. The key is immediate action. If the IRS knows that a tax professional will be submitting a proposed resolution to the problem, any impending levy and/or garnishment will likely be stayed until a mutually-agreeable resolution is put in place. It is imperative that tax problems be handled as quickly and efficiently as possible. Otherwise, our tax client may find himself unable to pay his mortgage or make his car payment, as the IRS has taken nearly all of his $770 per week paycheck.

The tax law firm of Jones & Ryan offers a free initial consultation. To begin the process of tax recovery simply visit the Jones and Ryan Tax Website and take our tax relief questionnaire. You may also enjoy our other tax articles as well as our extensive frequently asked tax questions page. On our website you may also learn more about our firm, our tax services, and how to contact us for tax help.