Joe Lentini

You Received an IRS Notice, Now What?

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After the pandemic shut down and collection freezes by the IRS it is now time for the IRS to push their collection process. IRS notices have been and will continue to be sent to collect back tax liabilities owed to the Federal Government.

So, what do you do if you receive a notice from the IRS? There are four choices that you have.

First is to pay the amount due without questioning it and be done with it. While this may bring you peace of mind did you know that 70% of all tax notices sent are incorrect? Just because the IRS claims you owe them money doesn’t mean they are correct. They only have one side to the story. There may be deductions or other issues that may cause that amount to be reduced. You should never accept the amount without fully understanding what they are proposing to you.

The second option is to set up a never-ending monthly payment plan. The plan that will continue to accrue interest and may result in paying for many years.

The Third option, which seems to be the most common, is to ignore the notice. This “friendly” notice will turn into more threating notices and eventually lead to a tax lien and possibly a levy on your wages and/or bank account. These actions are very serious and can be very damaging to you.

The final option is to try and reduce the debt. How can that be done? All depends on the circumstances. Filing missing returns, amending returns that may have been filed inaccurately, looking to reduce penalties, these are all possible ways to help reduce tax liabilities.

So, should I hire a professional to help me resolve my IRS problems?

Sometimes taxpayers with IRS tax problems decide to face the IRS on their own. Sometimes they hire a professional like a CPA, Attorney or EA, but not someone who specializes in tax resolution. The best thing to do when faced with an IRS Problem is to hire an expert in tax resolution so you can get the best result possible.

Even if you owe $10,000 or less, have all your income tax returns filed, and are able to pay the amount due over 36 months with a guaranteed a monthly Installment Agreement (payment plan), it’s good to pay a small fee to have a professional set it up for you.

Here are the top 4 reasons why hiring a CPA, Attorney or EA is the smart thing to do if you OWE money to the IRS

1. Contrary to popular belief, you DO have rights as a taxpayer you probably don’t even know exists. One of those rights is the right to representation. If an IRS revenue officer or revenue agent calls or “visits” you, did you know you are under no obligation to answer any of their (very intrusive and condescending) questions? You politely respond by asking for their contact information and telling them you are in the process of hiring a professional to represent you and that this person will contact them directly. A CPA or EA that deals with IRS problems for a living knows the “ins” and “outs” and how to deal with the IRS so that your rights are protected. A tax resolution specialist also knows how to get you the lowest possible settlement. Generally, our clients never meet or speak with the IRS once we’re on the scene!

2. If you owe between $10,000 and $200,000 plus, the IRS has many NEW flexible programs available to taxpayers such as Offer in Compromise, Partial Pay Installment Agreements, Payment Plans, Penalty Reduction, and Currently Not Collectible Status to name a few. Each carries with it its own unique process, procedures and qualifications. Having an experienced Tax Pro in your corner ensures you are taking advantage of the best options available to you.

3. Having unfiled returns (on average our clients have more than 3 years of unfiled returns) qualifies for getting professional help. Not filing legally required tax returns when due is considered a federal misdemeanor which carries with it a $10,000 fine and potential jail time. Generally, the IRS won’t throw you in jail unless the taxpayer is deemed to owe a lot of money and is uncooperative about getting the returns filed. Hiring a professional to represent you is the smartest move you can make here!

4. If you are being audited or about to be – The IRS will ask you about 50 very intrusive questions in the initial interview with them. How you answer these questions will dictate the fate of your case. Having a tax resolution specialist conduct these meetings WITHOUT you is the best course of action I can recommend. Half of the referrals to the IRS’s criminal investigation division (CID) come from that “nice” guy or gal you’re sitting across the table from at the audit.

One last thing….ask yourself this question: Would you go to court without a lawyer? If you answered “yes” hopefully you know the law inside and out concerning your case, but if representing yourself doesn’t seem like a good idea it’s best to hire somebody who is well versed in the subject matter. Well, it’s the same thing with the IRS. Having someone who knows how to negotiate and deal with the IRS may be the best money you’ve ever spent!

IRS Will Wipe Away $1.2 Billion in Late Fees from Pandemic

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The IRS announced on Wednesday that it will provide broad-based penalty relief for certain 2019 and 2020 returns due to the pandemic. The IRS issued Notice 2022-36, which will wipe out a variety of late fees for individuals and businesses impacted by the pandemic.

The IRS estimates that the worth of the penalty relief will total more than $1.2 billion for 1.6 million taxpayers. In addition to helping taxpayers, the step is designed to allow the IRS to focus its resources on processing backlogged tax returns and taxpayer correspondence to help return to normal operations for the 2023 filing season. While tax returns for 2019 and 2020 will be eligible for relief, taxpayers must file any late returns by September 30, 2022, for the fees to be forgiven. The IRS is also taking steps to help taxpayers who have already paid the penalties.

The relief is automatic so eligible taxpayers will not need to apply for it. Most eligible taxpayers will receive their refunds by the end of September. The relief applies to the failure to file penalty for both the Form 1040 and 1120 series, as well as others listed in the notice. Penalties for failing to file a tax return can be as much as 25% of the unpaid levies. The IRS will not forgive penalties for failing to pay or in situations where fraudulent returns were filed.

The IRS is also providing penalty relief to banks, employers, and other businesses required to file various information returns, such as those in the 1099 series. Eligible returns must have been filed by previous dates listed in the notice. More guidance is expected in the coming months.

IRS Statement on Balance Due Notices (CP-14)

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The Internal Revenue Service on July 27,2022, issued the following statement on CP-14 balance due notices:

The IRS is aware that some payments made for 2021 tax returns have not been correctly applied to joint taxpayer accounts, and these taxpayers are receiving erroneous balance due notices (CP-14 notices) or notices showing the incorrect amount.

Who is affected: Generally, these are payments made by the spouse (second taxpayer listed) on a married filed joint return submitted through their Online Account. Some other taxpayers may also be affected outside of this group.

No immediate action or phone call needed: Taxpayers who receive a notice but paid the tax they owed in full and on time, electronically or by check, should not respond to the notice at this time. The IRS is researching the matter and will provide an update as soon as possible. Taxpayers who paid only part of the tax reported due on their 2021 joint return, should pay the remaining balance or follow instructions on the notice to enter into an installment agreement or request additional collection alternatives. Taxpayers can ensure that their payment is on their account by checking Online Account under the SSN that made the payment. Note that any assessed penalties and interest will be automatically adjusted when the payment(s) are applied correctly.

Additional information for tax professionals:

In general, when certain payments are processed, programming does not move the payment to the married filing jointly account when the payment is:

  • not electronic and is made by the secondary spouse.
  • electronic, is made by the secondary spouse, and posts before the joint return indictor is present to identify the primary taxpayer.
  • made by the secondary spouse using the Online Account (OLA) Make a Payment functionality.

If you have received any notices from the IRS please contact us at 516-821-8193

IRS Balance Due Notices

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The IRS will issue a CP14 Notice whenever there is a balance due of $5 or more on a taxpayer’s account. The notice requests payment be made within 21 days. If a payment has not been made within 60 days, the IRS can move forward with collection activities. With the recent backlog of mail, some of these notices were sent in error. If a client is issued a CP14 Notice that does not adjust their return, there are ways you can help them:
• Wait for the client’s payment to process. If the client made the payment, the delay between processing the payment and the return likely caused the IRS system to issue the notice.
• Reply to the notice. Include proof of the cleared payment and request the penalties and interest be removed.
Either option will require time and patience until the matter is resolved

Small Business Owner: Owe Payroll Taxes? Here’s What to Do.

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Unpaid payroll taxes are a serious matter to the IRS and are some of the worst kind of back taxes you can owe. If you’re a small business owner with a payroll tax problem, read on to learn what you can do to avoid the IRS crippling your business or worse, shut your business down completely.

Already in payroll tax trouble? Contact us to schedule a free, no-obligation consultation and let’s get your payroll tax issue resolved. https://www.jjtaxgroup.com/contact.htm.

Why Small Business Owners Get into Payroll Tax Trouble In The First Place
It’s hard being a small business owner today, trying to pay your employees their paychecks every week, and pay the IRS all those payroll taxes!

A lot of times when money is short, you pay the employees first. It’s a natural thing to do—you need to take care of your employees, even if you have to skip paying yourself! Besides, if you don’t pay them, they’ll quit and you will have to hire new people all the time.

It can seem easy to “just pay the 941 taxes next pay period” and give yourself a little cash flow cushion, but skipping paying your employees payroll tax deposits is never a good idea.

What happens too often is 1 pay period turns into 2, and 3, and 4, and eventually you’re so deep in payroll tax debt that the only thing you want to do is completely ignore your problem.

Except the IRS doesn’t care about your financial problems. They just want you to pay your payroll taxes!

The IRS doesn’t care if you can’t pay your employees. They don’t care if they put your employees out on the street. They don’t care if you can’t collect your receivables. They don’t care if one of your largest and best customers just went “belly-up”. All they care about is you have money that belongs to them and they will do whatever they have to, even put you out of business, to collect it. They don’t care who you are, or even what business you are in.

Penalties are The Kiss of Death When It Comes To Back Payroll Taxes

Penalties for failing to file and pay your payroll taxes are the “kiss of death” for any small business owner. They tack on penalties totaling 33% in just the first 16 days! And it doesn’t stop there. The IRS adds interest on top of the penalties too. It is not uncommon that a payroll tax liability doubles in short order. And if you don’t pay them or work something out, they will shut you down! It’s much less work for the Revenue Officer, as most are lazy, to simply close you down than work out an arrangement with you.

They IRS Will Collect Or They Will Shut You Down

It’s as simple as that. The IRS is the most brutal collection agency on the planet. They have more authority than the President of the United States! And they have all the ways and means to do whatever it takes to collect what’s owed to them. You didn’t wake up in the morning, go to work, and say to yourself, I’m not paying my payroll taxes because you didn’t want to. The money simply wasn’t there. It’s not your fault. One week you’re short of cash. It was a slow week, a customer’s check bounced, or any number of legitimate reasons that just prevent you from paying the IRS. You’re a good person. You figure you will make it up the next week. But then next week comes and goes, and you realize you still don’t have enough money to make that payroll tax deposit. And then the entire situation starts “snow-balling” into an avalanche.

Should You Call The IRS To Get Your Payroll Issue Fixed?

If you were to call the IRS and were able to get through after waiting on “hold” for an hour or two, and try to explain your situation—you might as well have a conversation with the wall—because they don’t care. The IRS representative that you’re talking to probably makes less than $20 an hour, and is poorly trained. Do you think they ever had to make a payroll in their life? Do you think they know what it’s like running a small business? Do you really think they will have any sympathy for you?

Not only is the answer “NO” but they can also dictate the fate of your case. What they will try to get, while you’re on the phone, is all your personal and financial information. They want to know where you bank; they’ll want to know all about your customers who owe you money, they’ll want to know about the value of all your assets, like your home, cars, motorcycles, etc. Why? Because now they have all the information, they need to levy your bank accounts, take your receivables and seize your property.

Now that you know you shouldn’t be talking to the IRS because they are not going to help you, you might be wondering what you should do? Where should you turn for help? They smartest thing you can do to protect your business and family is to have someone represent you—someone who deals with the IRS for a living. You need to get help—but not just from anyone—you need help from someone who is an experienced competent professional, and deals with the IRS every day, helping small business owners keep their businesses and settle IRS payroll tax problems.

If you were charged with a serious misdemeanor or felony, would you go to court without a lawyer? You don’t want to represent yourself before the IRS either. You need professional, expert representation.

Reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem https://www.jjtaxgroup.com/contact.htm Your expert tax resolution professionals know how to navigate the IRS maze.

Once you decide to retain us, we step into your shoes and protect you from the IRS’s abusive tactics. We take over all communications from the IRS on your behalf. You don’t have to speak with the IRS anymore. We do. Not only that—they are not allowed to talk to you once you’ve signed our Power of Attorney! Once they realize you have someone on your side protecting you, who knows their tricks as well as they do, they have to step back and follow the law. Not only can we protect you from the IRS harassing you, calling you, and showing up at your front door, we can get those penalties reduced and, in some cases, completely removed!

Contact us now and let’s get your payroll tax issue resolved! https://www.jjtaxgroup.com/contact.htm

Do You Owe Back Taxes? Why You Should Stop Panicking & Start Planning

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If you owe back taxes to the IRS, some amount of panic is understandable. After all, the Internal Revenue Service has the power of the federal government in its corner, something no other debt collector can claim. They are considered the most brutal collection agency on the planet.

It is easy to freeze up and just do nothing when you owe back taxes to the IRS, but hiding from, or doing nothing about your tax debt will not make it go away. In fact, ignoring the taxes you owe will only make the situation worse, since interest and penalties can really add up. You also risk having your paycheck garnished (the IRS does not need a court order to do this) or your bank account levied. The IRS can also file a Notice of Federal Tax Lien making it all but impossible to obtain financing for a car or home.

So instead of panicking about your tax debt and hoping the problem will go away, you need to take some proactive steps. Now is not the time to panic and hide – now is the time to start taking action.

Some of these steps you can do on your own if you’d like, while others will likely require the intervention of an experienced tax resolution expert. Here are some proactive steps you can take to get a handle on your tax debt. If you need help resolving your IRS tax problem, contact us here https://www.jjtaxgroup.com/contact.htm. We help people with IRS problems every day.

Confirm the Amount Owed

When you owe back taxes, one of the first things you should do is make sure you really owe the money. The IRS has been known to make mistakes, a lot of mistakes, and the agency is far from foolproof. Contact the IRS or have us do an IRS transcript analysis to determine the amount the IRS claims you owe.

Seek Out Deductions You May Have Missed

At the very least, you may not owe as much as you think you do, and every dollar you can remove from the bill is one more dollar in your favor. Now is the time to scour your past and current tax returns, looking for deductions and tax credits you might have missed.

Unless you are a seasoned tax expert, you will probably need some professional assistance to make this happen. If you are already working with a CPA or tax expert, you can ask them to look at your past tax returns but only a tax resolution expert, who helps people like you for a living, can protect your income and assets as you go through the process.

If you missed a few deductions and tax credits along the way, your tax professional can file amended returns on your behalf, lowering the amount of tax debt you owe – and possibly eliminating it altogether. However, you usually can’t go back more than 3 years to amend returns.

Look for Special Programs You May Qualify For

The bad news is the IRS wants its money and has the power to collect it.

The good news is the tax agency also offers several programs tax filers can use to make the repayment process easier. In some cases, the IRS may even be willing to settle for less, possibly much less, than the total amount of back taxes you owe.

These programs are not available to everyone, and if you have the resources needed to pay your back taxes, the IRS is unlikely to give you much of a break. But if your resources are limited, the tax agency may decide that a small amount of tax repayment is better than none at all.

The first step in the process is finding the programs for which you might qualify, and that will probably require the help of an experienced tax resolution expert. Most CPAs do not have this experience. Negotiating with the IRS is not an easy thing to do, and you may need help to drive the best bargain and reduce your back taxes. In the end, it may be well worth paying a tax relief expert to negotiate on your behalf, especially if you end up with a much lower tax bill.

It is easy to panic when you owe back taxes, but you should not let fear get in your way. The longer you ignore the problem, the worse it is likely to get, and the sooner you act, the better off you, and your finances, will be. There is a solution to every IRS problem. Let us see what IRS tax debt settlement programs you qualify for today. https://www.jjtaxgroup.com/contact.htm