The primary focus of my firm is tax representation in Parkchester, NY. Resolving payroll tax debt involves repaying tax withholdings that was intended for the IRS. Employers have a fiduciary responsibility for collecting taxes from its employees and in turn paying those funds to the state and IRS. Those collected funds are held in a payroll tax trust fund. When employers (usually of small businesses) don’t pay, it becomes a major problem for the IRS. The employees’ withholdings are the taxes held in payroll tax trust fund and the same withholdings that employees would later file from their W-2s. When the IRS payout refunds through those same W-2s and not receive the payroll tax trust fund money from the employer, that’s when it becomes a problem for the small business employer. The IRS ... 04/02/2023

The primary focus of my firm is tax representation and post-tax filing compliance in Parkchester, New York. A taxpayer would receive a final notice after the IRS has exhausted all efforts in reaching the taxpayer to collect on a tax liability. Each notice after the initial notice for payment would urge or remind the taxpayer that the IRS has yet to receive a response on the tax due. The taxpayer still has time to address the tax liability for each letter received and could do so directly with the IRS, however oftentimes the warnings go unanswered which leads to the final notice to collect on the tax liability. The final notice is the IRS’ intention to levy the taxpayer. The final notice (also called the Letter 11) is when the IRS begins to aggressively take the funds needed to satisfy t... 03/08/2023

The primary focus of my firm is tax representation and post-tax filing compliance in Parkchester, New York. A Doubt As To Liability Offer in Compromise or DATL-OIC, is used when the taxpayer questions the existence or the amount of a tax liability. There may be a reason for a compromise if the taxpayer believes a debt doesn’t exist and has supporting documentation or evidence to challenge the tax liability. The IRS would then evaluate the claim and supporting evidence to make its determination as to whether a tax liability exists. The DATL-OIC is basically an audit examination and Offer in Compromise combined. The final determination by the IRS depends on whether the submitted evidence is accepted or rejected. In the meantime, the taxpayer must stay in compliance (keeping up with tax re... 03/03/2023

The primary focus of my firm is tax representation and post-tax filing compliance in Parkchester, New York. Non-filers who neglect to file a tax return in a given year, will basically have their tax return filed by a Revenue Officer who would obtain third-party tax documents to create a “tax return” on behalf of the non-filer. The Substitute for Return (SFR) is not considered a tax return unless the non-filer (taxpayer) signs the document. That document would then count as a tax return and could incur tax liabilities in which the Revenue Officer would seek to collect through tax notices, liens and in the worst-case levies. The downside of having an SFR created on behalf of the non-filer (taxpayer) is that the tax liability incurred as a result of the SFR would not be dischargeable in th... 02/26/2023

The primary focus of my firm is tax representation and post-tax filing compliance in Parkchester, New York. When a non-filer neglects to file their tax returns, the IRS will automatically file a tax return for the non-filer on their behalf. This is called a Substitute for Return (SFR). An SFR may not be a good option for the non-filer since the IRS wont’ take into account credits and deductions available to the non-filer. It is strictly filed for the sake of having the non-filer’s income on record. An SFR is not an actual tax return. There is little benefit to the non-filer having the IRS file the SFR. If it turns out that the non-filer would owe a tax debt as a result of the SFR, then the non-filer may want to file the tax return to replace the SFR.A non-filer may want to file a tax re... 02/24/2023

The primary focus of my firm is tax representation and post-tax filing compliance in Parkchester, New York. Taxpayers must be compliance with the IRS by filing their tax returns. Taxpayers who don’t file their tax returns are referred to as non-filers. After many years of neglecting to file their tax returns, non-filers may run into tax debt problems, but non-filers can only negotiate for a lower tax debt repayment after they first file their tax returns to become compliant with the IRS. The IRS would make no exceptions. Certain transcripts are needed to retrieve financial information to reconstruct tax documents that are no longer accessible. The Wage and Income Transcript includes the Form W-2 Wage and Tax Statement which details taxpayer and employer information, taxpayer’s earned wa... 02/18/2023

The primary focus of my firm is tax representation and post-tax filing compliance in Parkchester, New York. Tax compliance is what’s required in order to obtain Offer in Compromise, negotiate tax liens or have levies disrupted through the IRS. Tax compliance means the taxpayer must do their part in getting into and remaining in good standing with the IRS. This starts off with filing required past tax returns up to the most recent tax year. Tax compliance also includes any estimated tax payments required in the most recent tax year. Being in tax compliance shows the IRS that the taxpayer is serious about getting back on track to paying their taxes. Not being in tax compliance and not remaining in tax compliance has some serious consequences. The IRS won’t make any Offer in Compromise unl... 02/16/2023

The primary focus of my firm is tax representation in Parkchester, NY. It’s important for taxpayers to know exactly what is on their tax account transcripts. The tax account transcript is a history of the taxpayer’s filings, non-filings, refunds, any debts owed, penalties and basically anything tax related that could ever appear since the start of earning income. The tax account transcript data can go back as far as 20 years, though the data needed for tax debt resolution may not have to go that far back. When it’s discovered that taxpayers aren’t in tax compliance (they’re not current with tax filings), it’s important for a tax professional to bring the taxpayer current. This is especially the case if they are seeking a reduction of tax debt in a negotiation with the IRS. The tax accou... 02/11/2023

The primary focus of my firm is tax representation and post-tax filing compliance in Parkchester, New York. Post-tax filing compliance is complying with the IRS after initially filing a tax return in which the return is later assessed by the IRS and the IRS discovers there is a tax debt due. This tax liability would generate a silent lien if payment isn’t made upon demand per IRS written notice.  A taxpayer could incur a tax liability for many reasons, but if it’s not paid promptly, the taxpayer will likely have to pay in addition to the debt interest and penalties.The silent lien is the IRS’ way of alerting the public through a notice filing that it seeks seniority amongst other possible creditors of the taxpayer. The public filing is called a Notice of Federal Tax Lien (NFTL). The IRS... 02/08/2023

The primary focus of my firm is tax representation and post-tax filing compliance in Parkchester, New York. When a taxpayer has a tax lien from the IRS, it could make it difficult to secure any financing from a lender because that lender would be subordinate to the IRS. However, the IRS would allow becoming subordinate in a case when doing so means the taxpayer could free up cash on a new loan to pay down the debt owed to the IRS. Generally speaking, the IRS won’t get in the way of opportunities of getting a debt paid down whether lump sum or in installment payments thus allowing itself to be subordinate. The key to getting the IRS to subordinate a tax lien is to convince them that the new loan is for the purposes of paying down the outstanding debt owed to the IRS. If the money is bein... 02/04/2023

The primary focus of my firm is tax representation and post-tax filing compliance in Parkchester, New York. When taxpayers owe a large debt to the IRS and can’t pay the tax debt, the IRS will seek to collect on the debt through the taxpayer’s assets. If the taxpayer has an asset in which the IRS had placed a tax lien, the taxpayer may think the asset can’t be discharged or sold from under the lien and that somehow the lien prevents the sale of the asset. This simply isn’t true. The asset could in fact be sold from under the lien. The IRS wants nothing more than to collect on the debt and the lien helps to secure that debt. The IRS would rather have the money than property so if the taxpayer could sell it to satisfy the debt, then the IRS would not let the lien interfere with the sale. H... 01/31/2023

The primary focus of my firm is tax representation in Parkchester, NY. In order for the IRS to consider a taxpayer’s Offer-In-Compromise (OIC) request, a Reasonable Collection Potential or RCP must be completed and submitted along with supporting documentation as part of the package. The objective is a reduced tax liability that could be significantly less than an installment agreement but with a shorter time period of maybe 12 months or 24 months depending on the future income of the taxpayer. Without the RCP, then the Offer is likely to be rejected and the process would have to start over. The RCP Formula does allow for options that could increase the taxpayer’s expenses that could either lower the overall tax liability or perhaps put the taxpayer in a Currently Not Collectable status... 02/16/2021

The primary focus of my firm is tax representation in Parkchester, NY. A responsible person could be any employee who was in the position of making decisions involving the withholding and subsequent disbursement of the payroll tax trust fund to the IRS. A bookkeeper, sole proprietor, partner, and accounting firm are a few examples of the employees that could be made responsible simply because they have access to the payroll withholdings and the ability to effect or prevent its release.  The IRS can be very aggressive in obtaining these funds because they know taxpayers not only have payroll taxes withheld, but they’ve likely already reported them via the W-2 when filing their tax returns and received income tax refunds as a result. The IRS will aggressively go after anyone deemed respon... 02/06/2021

The primary focus of my firm is tax representation in Parkchester, NY. When taxpayers are seeking a tax debt resolution, they often think of asking for an Offer-in-Compromise or OIC. An OIC is one form of debt repayment that appears to be the most popular. Whether the taxpayer is eligible for an OIC depends largely on their ability to repay the tax debt. The IRS relies on the Reasonable Collection Process (RCP) to determine a taxpayer’s ability to repay tax debt because it involves the taxpayer’s gross income less qualified household expenses and the net equity in assets. The RCP formula has to be correct otherwise the taxpayer would have the offer rejected which could be costly.The IRS takes into account local and national standards when determining household expenses that taxpayers co... 01/29/2021

The primary focus of my firm is tax representation in Parkchester, NY. The taxpayer who has a lien on property, such as a house, could have the house discharged from under the tax lien. The tax lien is basically a claim made by the IRS for the property in an effort to collect on tax debt. Since the taxpayer has an asset (house), the IRS may have first claim on the asset above all other creditors. Discharging the asset can be accomplished through the sale of the house to satisfy the tax debt. The tax lien would not be discharged since it’s the claim on assets especially if by selling the house it would fall short of satisfying the tax debt. However, if the tax debt is satisfied through the sale of the house, then the lien would be released.Taxpayers can use the equity to fully pay the ta... 01/22/2021

The primary focus of my firm is tax representation in Parkchester, NY. Taxpayers who may be seeking an Offer-In-Compromise (OIC) as a tax debt repayment solution may consider either a lump sum option or a short-term deferred option. The lump sum option would require the taxpayer to submit 20% of the amount offered to the IRS which is a calculation of the Reasonable Collection Potential (RCP). The RCP calculation would take into account the taxpayer’s net equity in assets and 12 months of future income. Once the RCP, application with fee along with the 20% upfront required payment, the IRS will determine whether the Offer will be accepted. Assuming the Offer is accepted, then the taxpayer would have 5 months to pay the remainder of the Offer that had been accepted. If the Offer is not ac... 01/16/2021

The primary focus of my firm is tax representation in Parkchester, NY. Taxpayers who may be seeking an installment agreement such as an Offer-In-Compromise (OIC) but are having a tough time getting into compliance and can’t pay taxes owed right away may need to file for uncollectible status. Ordinarily the IRS won’t make any deals with taxpayers unless they’ve filed all back tax returns (up to the past 6 tax periods), but if the taxpayer files for uncollectible status via a Form 433-F to submit financial data, it could buy the taxpayer some time and hold off any potential levy. The IRS can review the taxpayer’s financial information to see if he/she qualifies for uncollectible status. The taxpayer could work on becoming compliant in the interim by filing necessary unfiled tax returns. T... 01/14/2021

The primary focus of my firm is tax representation in Parkchester, NY. Many taxpayers may believe that an Offer-In-Compromise (OIC) is needed in order to resolve their back-tax debts. There are plenty of commercials that would make one believe that their back-tax debt could be reduced to pennies on the dollar. However, not everyone will need or even qualify for an OIC. The ability to obtain an OIC is really based on how much back-tax debt the taxpayer has as well as the ability to repay the debt. If the IRS determines that the taxpayer can pay all of the back-tax debt, then there would be no compromise and the taxpayer would be expected to make some other repayment arrangements on the full amount owed. The OIC could be the right solution for a taxpayer, but the Reasonable Collection Pot... 01/08/2021

The primary focus of my firm is tax representation in Parkchester, NY. Streamlined Installment Agreement is an agreement that allows a taxpayer who owes less than $50,000 in back-tax debt to pay the IRS on a monthly basis. The reason why it’s called a streamlined agreement is because it’s relatively simple to set-up with the IRS. The taxpayer can simply make the arrangements over the phone with the IRS or apply directly for the installment agreement online at the IRS website. The taxpayer would not have to provide information about his/her assets or income to qualify which is likely the attraction to this type of agreement. In addition to having under $50,000 in back-tax debt, the taxpayer must not have had a back-tax debt or an installment agreement in the last 5 years. The taxpayer mu... 01/06/2021

The primary focus of my firm is tax representation in Parkchester, NY. A third-party could be held liable for paying the payroll tax fund which are tax withholdings held on behalf of the IRS. If the third-party is an individual, the person could be financially impacted. A parent could unknowingly become a third-party for an adult son or daughter in an effort to cover the business’ payroll. If the business owner in this case is short on money and the parent covers that responsibility by depositing the funds to cover payroll, then the IRS would seek the unpaid withholdings from the parent who made deposits for payroll. This would fall under “The Trust Fund Recovery Penalty” (IRC 3505).Under “The Trust Fund Recovery Penalty” (IRC 3505), the lender who provided funds to the business to cove... 12/31/2020