Compliance | Return Filing
In order to resolve your liability with the IRS you must be current and compliant. That means:
1. Your current pay roll or estimated taxes must be up to date for the period.
2. And you must also have your tax returns filed.
If you need help filing your missing tax returns let us know.
Installment Agreements or payment plans are payment arrangements the IRS allows taxpayers to pay liabilities over time. If you cannot pay your total liability by the end of the collection statute expiration date but may be able to pay a portion of the tax, you may be able to enter in to a partial payment installment agreement. Impact Tax Resolution will negotiate the lowest possible payment plan for your circumstances.
Understand that while the installment agreement is in place penalty and interest continue to accrue.
What can an installment agreement do for you?
- No collection activity can be taken while you have a pending installment agreement.
- Levies may be released while an installment agreement is pending.
- In general Levies must be released when an installment agreement is approved.
- You are protected from collection activities 30 days after a rejection for approval.
- If you default or the installment agreement is terminated you have another 30 days to appeal.
- You can appeal a terminated, defaulted, or rejection of an installment agreement. No collection activity can be taken while in appeal.
- Installment agreements may allow you to affordably pay down your liability with out putting you in economic hardship.
Call Impact Tax Resolution Immediately if you are facing a Bank Levy, Wage Levy, or Accounts Receivable Levy!
First things First
The IRS must follow the required procedures before they can levy your assets. They send the following notices prior to enforcing a levy.
- Notice and demand
- Notice of intent to levy
- Notice of a right to a Collection Due Process hearing
If you have received an IRS notice of demand, intent to lien or intent levy it is time to contact us today.
Contact Impact Tax Resolution immediately to keep the Federal Notice of Tax Lien off your public records!
If you are in business there may be other solutions than paying of your federal tax lien. Ask about the Impact Small Business Fresh Start.
A lien can be defined as a charge or encumbrance that a person has on the property of another as security for a debt or obligation. A federal or state tax lien may arise when a taxpayer is liable to pay any federal or state tax after a demand has been made for payment.
Before a Federal Lien can be filed the IRS must first:
Make an assessment
Send you notice of Demand
The IRS is required is to send you a notice of your appeal rights for collection due process procedure 5 days after they have filed a Notice of Federal Tax Lien.
An audit done by the Treasure Inspector General for Tax Administration has found that the IRS does not always follow the law.
If it can be determined that IRS procedure was not followed ITR may be able to get the IRS to issue new notices.
It is very important to move quickly if you have received a Notice of Federal Tax Lien. There is a possibility to have the lien withdrawn if the result will put the IRS in a better position to settle your tax liability.
- If you pay your liability the Lien will be released.
- If the statue of limitation has expired on the amount assessed the lien must be released.
- At the discretion of the IRS, if a bond is furnished in the amount to secure your liability, the IRS may release the lien.
In general The IRS still has a right to Federal Tax Lien while there is an outstanding balance on your account even when you enter in to an offer in compromise, or installment agreement.
Offer in Compromise
An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles a taxpayer’s tax liabilities for less than the full amount owed.
In most cases, the IRS won’t accept an OIC unless the amount offered by a taxpayer is equal to or greater than the reasonable collection potential (RCP). The RCP is how the IRS measures the taxpayer’s ability to pay. The RCP includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property. In addition to property, the RCP also includes anticipated future income less certain amounts allowed for basic living expenses.
Reasons for the Offer
The IRS may accept an OIC based on one of the following reasons:
- First, the IRS can accept a compromise if there is doubt as to liability. A compromise meets this criteria only when there’s a genuine dispute as to the existence or amount of the correct tax debt under the law.
- Second, the IRS can accept a compromise if there is doubt that the amount owed is fully collectible. Doubt as to collectibility exists in any case where the taxpayer’s assets and income are less than the full amount of the tax liability.
- Third, the IRS can accept a compromise based on effective tax administration. An offer may be accepted based on effective tax administration when there is no doubt that the tax is legally owed and that the full amount owed can be collected, but requiring payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.
Small Business Fresh Start
In reality a significant number of businesses fall behind on federal tax deposits and almost exponentially increase their liability of taxes, penalties and interest. Liabilities are sometimes found to be in the $Millions of Dollars$!!! Impact Tax Resolution is here to help alleviate the stress, pressure and anxiety that type of tax liability can cause.
If your corporate tax liability has gotten out of control and you are worried about protecting your assets but would like a new beginning, Impact Small Business Fresh Start may be an appropriate strategy for you. Impact Tax Resolution understands that sometimes during the course of business your business may fall behind on your required deposits.
Sometimes it may be best salvage the best things about the old business and form a new entity. Goodwill, great service and products can be rolled in to a new corporation for a completely fresh start.
Understanding Small Business Fresh Start and the Payroll Tax
Understanding your payroll tax liability will give you a good base to understanding the benefits of using a small business fresh start strategy. In general your payroll tax liability is broken down in two categories. Non-trust fund components and trust fund components; basically employer and employee contributions, as the employer you are responsible to withhold and send the IRS both contributions.
The Non-trust fund components are the corporation’s matching contributions to Medicare and Social Security; In other words the employer’s share of FICA taxes.
The Trust Fund component consists of the portion of the employee’s paycheck that the employer is to hold “in trust” and give to the government on a regular basis. Simply the employee’s share of FICA taxes, along with income taxes that are to be withheld.
Suppose an assessment of the tax liability is done and the Non-Trust fund portion including penalties and interest is more than half of the outstanding liability of the existing corporation. What would happen if the company was to be shut down?
When a corporation is brought in to existence the entity is issued an EIN, known as an employer identification number. If the EIN with the substantial tax liability were to issue a final return and close the doors, 100% of the Employer’s Non-Trust fund tax liability along with 100% of the penalties and interest associated with that liability would be gone with the corporation.
Meaning the only portion the IRS may try to attach to a prior responsible person would be the Trust Fund Recovery Penalty. The end result may be a substantial tax saving. Great care must be taken when implementing this strategy to be sure the IRS does not pursue a new entity for the old corporation’s liabilities or the taxpayer is not found to be defrauding the IRS. It is always good to get IRS approval before moving forward.