What Exactly Is A Levy?
A levy is when the IRS legally takes funds or assets or as it states on the internal revenue website: A levy is a legal seizure of your property to satisfy a tax debt. Now it’s important to note that the IRS will only use a levy as a last resort, they would prefer to work with a cooperative taxpayer to set up a payment settlement or installment agreement rather than forcibly seize your assets, bank funds or wages. The IRS will use the levy as a tool to get otherwise uncooperative or unresponsive taxpayers to pay their debt. This is important because it means the worst thing a taxpayer can do is choose to ignore the IRS notices and collections efforts. Upon receiving a notice from the IRS the first thing a taxpayer should do is contact an experienced tax lawyer to discuss their options.
Methods for Stopping A Levy
As there are many reasons a taxpayer can find themselves with a tax levy notice as such determining the best way to stop the bank levy will depend on the individual’s financial situation. For instance sometimes the IRS makes complete mistakes, in this case the taxpayer should appeal and dispute the assessment. Other times a taxpayer may have been unresponsive and uncooperative, this case may be more complicated to resolve.
The IRS is tasked with keeping the United States Federal Government funded so it can do all of the things a world superpower needs to have done. As such they have extraordinary power over any other “creditor” you will ever have to deal with and as such if you do not pay your taxes or settle your back tax debt the IRS can legally seize your assets.
However is like any other creditor in some ways; they would rather get some money than no money at all. Because of this they have different programs that allow taxpayers to settle their debts in monthly payments or even sometimes reduce the amount owed. These programs are among the different ways to stop a tax levy and they include the following.
The IRS Installment Agreement.
One of the most common ways to stop an IRS bank levy is to enter into an IRS installment agreement. An installment agreement with the IRS allows the taxpayer up to 3 years to pay the complete amount. The total debt spread over 36 months plus interest will determine the monthly payment. As long as you stay on time with your payments the IRS will regard you as being in good standing and penalties will stop. It is important to act fast, have less than 30 days from receiving the notice to enter the installment agreement wait too long and your bank account could be emptied by the IRS.
Negotiate an Offer In Compromise.
Nearly every tax law firm commercial every done mentions someone who had their tax debt reduced to pennies on the dollar. While this does sometimes happen the Offer In Compromise program has a set of strict guidelines that a taxpayer will either qualify for or not. An experienced tax attorney will be able to review your financial situation and determine if an Offer In Compromise is a possibility for your case. It should be noted that even if your initial attempt to get an OIC fails during the process of the negotiation the IRS will cease collection actions. This at the very least can buy some time to come up with a new strategy.
Innocent Spouse Relief is another way a taxpayer may be able to stop a tax levy. However as the name implies the Innocent Spouse Relief program was created to protect individuals in a marriage who’s partner solely created the tax liability, and thus is innocent of the tax owed. This is a very specific circumstance and very few people will qualify. This program is only available to couples who file jointly. Again a tax attorney should be consulted to review your options.
If you feel the IRS has made a big mistake and you really do not owe them the money, you should file an appeal. You have the right to appeal your levy and in the case the IRS has incorrectly assessed your account you may even be able to stop the levy by calling the IRS to fix the mistake. However be sure to file a formal appeal anyway – you can always cancel your hearing should it become unnecessary.
Of course the most direct way to stop the levy is to pay the IRS in full, obviously most taxpayers are not able to do this or chances are the Notice of Intent To Levy would have never been sent!
If you have received a Notice of Intent To Levy From The IRS don’t wait you only have 30 days from the notice to appeal, pay in full or contact the IRS for a negotiated settlement. It is important to remember tax laws are complex and you should not try to go it alone. Hire an experience tax levy attorney and they can help put the IRS levy behind you.
To The the chagrin of small business owners everywhere congress passed a law to “encourage” speedy tax payments of withheld income tax, social security and medicare. This law created the Trust Fund Recovery Penalty or TFRP.
The money withheld from employees wages for paying their federal tax obligations is held in an account or trust until the employer deposits the money at the IRS to pay the employees taxes. Because this money is really the employee’s money being held and not the employer’s it really is a trust and should not ever be considered as finds a business owner can use to get caught up on bills by “robbing Peter to pay Paul”. The government will know very quickly if the required deposits of employee tax withholdings have not been made and take quick action to collect the finds.
This is where the Trust Find Recovery Penalty comes in. In the case that the IRS has notified the business that they must make the delinquent payments but the business is unable to make the full payment, the IRS may assess a trust fund recovery penalty on those members of the business they have shown to willfully violated the employee payroll trust fund. Note not only the business owner can be held liable but anyone the IRS says willfully fails to collect or pay the taxes. Willfully meaning knowingly or aware of or intentionally. As such the TFRP can be assessed to company officers, staff, or any member of the company responsible for the employee trust fund payments, at any step of the way including including the one who actually makes the deposits. A business does not have to have stopped running for the IRS to pursue individuals for the trust fund penalty. Among those who the IRS can go after with a Trust Fund Recovery Penalty include, officers of the corporation, partners, shareholders, a member of the board of trustees of nonprofit organizations, another member of the company with the authority and control over funds or even another corporation. To be exact for the willfulness to be pinned on an individual the IRS defines as someone who: must have been, or should have been, aware of the outstanding taxes and either intentionally disregarded the law or was plainly indifferent to its requirements (no evil intent or bad motive is required). – So using the payroll trust fund money to pay bills or creditors will under the IRS’s definition be considered willful. They do not care if it meant the business would be forced to shut down or layoff employees they simply want the money.
Once the IRS has begun an investigation to determined who is liable company employees will likely be interviewed by IRS agents. The IRS will try to determine the responsibility of each person involved to be able to prove who is liable for the TFRP. This is key as some members of the business may simply be told what bills to pay and how much while others are responsible for determining which bills get paid. Obviously the employee responsible for deciding which bills to pay bears the burden of the TFRP over an employe who just “follows orders”.
If your business is or may be in payroll tax trouble or already under investigation by the IRS for the purpose of assessing Trust Fund Recovery Penalties, contact an experienced payroll tax attorney right away. An experienced payroll tax lawyer will have the knowledge to protect your interests and rights.
Wage Garnishment – How To Stop The IRS
IRS wage garnishment can be stopped in essentially two ways; Either solve your tax problem or to cancel or delay the effects of the wage levy. Obviously it’s better to resolve the IRS problem than to delay it however often an individuals situation may require some actions to delay or negate the wage garnishment, giving the troubled taxpayer time to resolve the tax issues.
Stop the Wage Garnishment – Resolve Your Tax Problems
By getting back into good standing with the IRS you will be able to stop a wage garnishment. You do not necessarily have to have paid the IRS in full to but enter into a negotiated settlement. Various programs are available to help taxpayers get back into good standing, an experienced tax attorney will be able to guide troubled taxpayer to the program that will work best for their specific situation. Below are some of the methods available to get back into “good standing” and halt wage garnishment.
Get an Installment Agreement – The IRS will stop a wage levy once you have entered into an installment agreement with them. An installment agreement works like other loans or credit cards: you must make your agreed upon monthly payments including interest until the amount owed is paid off. To stay in the installment agreement, the monthly payments must be paid on time. The amount paid each month must allow for the entire amount owed to be paid in full within 3 years.
Submit an Offer an Compromise – Many people may have seen tv commercials from tax forms advertising settlements for pennies on the dollar. What they are referring to is the Offer In Compromise Program. The Offer In Compromise Program or (OIC) allows a taxpayer to settle the tax liability for less than the amount owed. However there are specific guidelines that an individual must qualify for before the IRS will accept the OIC. While not everyone will qualify it should be noted that once you have submitted a proposal for an Offer in Compromise the IRS will halt wage garnishments during the negotiation process. This may a way to buy time to pursue another program should your offer be rejected.
Hire an Experienced Tax Lawyer – IRS problems are both complex and the laws governing federal tax regulations are complex. As such it is advised to hire an experienced tax law attorney. A tax attorney will have the knowledge to make the right moves to end your wage garnishment quickly. In addition a tax lawyer may be able to reduce the amount owed to the IRS. It is also a clear advantage that the attorney will be representing you and the harassment from the IRS collection efforts will stop.
Be declared Uncollectable or Hardship Status – it may be possible to show that paying the IRS will place a family under undo financial hardship. Hardship status is temporary but can last for months or even years if economic conditions o not improve. An attorney can file to have hardship status placed on a case and this will end the wage garnishment as well as allow time to fins a more permanent tax debt solution.
Other methods to temporarily stop wage garnishment
While not recommended there are other ways to temporarily stop wage garnishment including what some might consider a “cat and mouse game”. These methods are drastic and will only by time not resolve the IRS problem, and ma in fact only make it worse, however for those with no recourse a few options are available including: Change jobs; by changing jobs you may temporarily out pace the IRS’s ability to get the legal approval to levy your bank account. File for bankruptcy – wage garnishment will stop when when you file for bankruptcy, however depending on your individual circumstances it may only be a temporary reprieve. An experienced bankruptcy attorney should consulted when deciding whether or not to go in this direction and only after discussing your issues with a qualified tax attorney. If you feel the levy is incorrect you may also file an appeal.
Wage garnishment is a serious problem and should you find yourself in this situation the best possible thing you can do is consult a tax attorney. An experienced tax lawyer will have the best options available to stop wage garnishment and begin to put your IRS problems behind you.
Below are answers to common questions troubled taxpayers ask when deciding on whether or not to retain the services of a tax attorney.
Is It True You May Be Able To Settle My Tax Problem for Pennies on the Dollar?
While it is true taxpayers that qualify for the Offer In Compromise program may qualify to settle their tax debt, every situation is different and will have different outcomes. An attorney would need to know all of the details of your individual tax debt problem to decide if your case would qualify for the offer in compromise program. Even if your particular case does not meet the criteria required by the IRS to enter the OIC program, there are many other tax settlement programs available that your attorney can use to bring your tax problem down to a manageable size.
The Internal Revenue Service is Very Powerful. How Can A Tax Attorney Fight Them For My Case?
Yes it is true that the IRS is one of the most powerful government agencies, however even so, they must operate within the laws. An experienced tax attorney will know how to use the laws and tax settlement programs to negotiate on your behalf. It is also important to note that without legal council a troubled taxpayer can quickly be overrun by the IRS and end up in serious and lasting trouble. When taking on the IRS is is essential to have retained an experienced tax attorney.
Is it tool late once the IRS has started to garnish my wages or bank accounts?
While it is certainly best to act before that happens, an experienced tax lawyer can in most cases quickly stop wage garnishment and bank levies. Under many of the tax settlement negotiation programs the IRS must stop all collection efforts during the negotiation process. An attorney will know this and be able to quickly get tax settlement negotiations under way, stopping the wage garnishments and releasing bank levies.
Can my CPA fix my tax problems rather than an attorney?
It’s crucial you know your CPA or tax preparer can be forced to testify against you in a criminal court. Only your attorney can be exempt from having to testify against you under the Attorney client privilege. It should also be noted, a tax lawyer will have years of experience in dealing with IRS cases and have a full understanding of how to move forward to settle your case.
If I Have Not Filed My Returns In Years Should I file Them Now?
It’s important to note, while you cannot be jailed for owning back taxes, you can be imprisoned for not filing! Even if you have not filed your tax returns for many years and feel like you may have “gotten away with it” you should contact a qualified tax lawyer and file as soon as possible. The IRS will eventually discover the issue and pursue the issue aggressively. Parties that can show they have acted in good faith will fair better and an attorney will know how to proceed for your best interests.
Will My Attorney Explain All Of My Options?
An experienced tax attorney will meet with you and review your case in detail. After learning the details of your particular tax problem they will explain the rang of options available for your defense. There are many tax settlement programs available and each will have it’s own set of requirements and consequences. Your attorney will be able to explain everything and work with your to decide the best course of action to get your tax settlement in progress and put the IRS behind you.
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Dedicated Sarasota Tax attorney Mary King has been helping clients get tax debt relief by negotiating currently non-collectible status, offers in compromise, installment agreements, and other tax settlements. IRS Tax Lawyer Mary King has years of experience obtaining favorable tax settlement agreements with the IRS for her clients
You may have seen TV commercials from large tax relief firms but beware many of these firms cannot match the level of expertise and attention you would receive from a local tax law specialist attorney.
A large tax firm will put an emphasis on high volume not high quality and, frequently have non-attorneys doing most of the work on each case under the name of the principle owners. These firms are usually not local and will never meet face to face to discuss the details of your tax problem, and many times either claim or infer promises that they cannot keep – promises designed to get you in the door and get your money.
Many firms use the tax debt settlement program Offer In Compromise to mislead the general public into believing it is easy an routine to get a many thousands of dollars in tax debt reduced to a few hundred dollars, but the truth is few people will actually see that result. A low-experience paralegal cannot provide the level of expertise required to resolve a complex IRS tax problem to it’s most successful outcome. Even worse they may lead you down the wrong direction causing more financial problems and making a successful tax settlement offer even less likely.
For the best chances of a successful tax debt settlement choose local IRS tax lawyers with years of experience personally handling tax debt cases. An experienced attorney directly handling your case will know which debt settlement program to use and how to navigate the bumps in the road the IRS will create during the negotiation process.
Each tax debt case is unique and to get an accurate and effective case put together your attorney will need very detailed information about your situation past and present. A face to face meeting with the attorney representing your interests is the most effective way to accomplish getting the details communicated effectively to your tax lawyer.
Also a local Sarasota tax attorney will be more responsive to any questions or concerns, after all, they live and work in the same area as you and have to maintain their reputation, to a large tax firm your case will be just another number. Your tax problems cause stress and worry , do not trust resolving your tax problems and getting your financial future secured to a under experienced paralegal, do adequate research, find an experienced tax law specialist. Be sure the have an excellent BBB rating and have a presence in your community.
While there may be no magic bullet to solve all IRS tax problems, a local tax attorney will produce the best results for a successful tax debt settlement.
If your Florida business has been drawing from the payroll trust fund to keep your lights on you will need help from a local payroll tax lawyer.
Few tax problems get the IRS’s attention like payroll tax issues. The IRS will pursue any laps in the payroll trust fund payments aggressively and the consequences of failing to either satisfy the amount owed or respond with legal representation will be severe.
If you are using the payroll trust fund money from your employee’s paychecks, it may seem to you a convenient way to get by in a tight spot, but the IRS will look at this as stealing from both your employees and the Internal Revenue Service at the same time!
Further more the collections efforts the IRS will employ to settle the tax debt are ruthless. They simply do not care if your Florida business survives or not – they want their money at all costs and will put a padlock on the doors and auction off all of the businesses assets to get it.
There is hope however! If you act before it’s too late a skilled Florida payroll tax attorney can put the collections efforts on hold while your tax settlement case is negotiated for your behalf. It’s important to get qualified legal help from a local Sarasota Tax Attorney and not from a large tax service. Only a local tax attorney will have the knowledge, skills and commitment to successfully represent a Florida business owner during a payroll trust fund case.
While there are many reasons to hire a local Sarasota tax attorney for tax problem resolution there are two major reasons above all others
Reason One – Confidentiality.
If you are in trouble with the IRS only an attorney can give you the attorney-client privilege. Why is the attorney-client privilege important for tax law cases? Easy – your attorney is exempt from testifying against you. That’s right, should your tax liability case go to trial, and you have chosen to work with a CPA or tax preparer for help, your CPA could actually be made to testify against you!
The very people most familiar with your tax and financial situation would be forced to spill the beans on any damaging information they may have during your trial. Don’t take this risk, only work with a certified tax attorney if the IRS is taking actions against you.
Reason Two – Expertise To Make the Right Decisions
Only a Tax lawyer will have the experience in achieving tax settlements. While a CPA may be familiar with some tax settlement programs, they will not have a full understanding of the and ins and outs of the various programs. Tax laws and codes are complex and many times change yearly. In addition there are many programs available a troubled taxpayer can use to settle or reduce the amount of tax liability owed but only an experienced tax attorney will know how to qualify you and to determine both the best program to use. In addition many of the programs that can help have a down side, an attorney can inform you of any negative consequences resulting from any debt settlement program.
Furthermore only an attorney will be experienced in working on cases with the IRS. Many times the IRS will not accept the initial offers and the process can go on for along time. An experienced tax lawyer will not panic and know how to adjust your settlement offer or appeals to gain a successful tax debt resolution.
Being under collections process from the IRS is a dangerous time and the wrong advise can be very costly. Do not take any chances with your financial future, hire a tax attorney and get your tax settlement case resolved.
Payroll Taxes and Trust Fund Recovery
Many business owners who employee help will be familiar with both the 1099 and W2 forms. A smaller business may be more likely to be using the 1099 than the W2. The difference between to two forms is as follows: with the W2, the employer is responsible for withholding the employees tax money – as in the case of a full-time employee.
The 1099 however is used for businesses who work with independent contractors, and it is the contractors responsibility to pay the IRS not the employers.
It is of course a more complicated matter to have employees and the require W2 tax withholdings and also adds a large degree of responsibility to the business owner to make sure they have both withheld the correct amount and made the payments to the IRS.
The employer also must be careful to follow the guidelines from the IRS on determining which classification their employee falls under. To help along those lines the IRS has posted resources for employers to determine the correct classification and their responsibilities and payment schedules. Those resources include: Publication 15, Employer’s Tax Guide and Publication 15-A, the Employer’s Supplemental Tax Guide.
Payroll taxes are only a concern for employees that are required to use the W2. The employer has several responsibilities including filing 941 tax returns quarterly and 940 tax returns yearly. Those quarterly and annual tax returns show the IRS the employer-paid taxes and the taxes withheld from the employee. These forms must be filed and the payments must be made to the IRS.
The IRS has made some changes, taking advantage of new payment technologies that remove any wiggle-room for employers to make the payroll tax payments. As of January 1, 2011 Employers are required to make their federal tax payments through the electronic federal tax payments system. This system is free but employers must register to get started. To make things more complex the employer must make separate payments for each different tax return type including tax forms 940, 941 and 945 and the payments must be made monthly or bi-weekly.
My Business Is Just Getting By. Why Should I Make The Payroll Tax Deposits And Not Use The Money Temporarily To Pay Bills?
Simple answer – the IRS will aggressively pursue collections against any business not in compliance with the payroll trust fund payments. In fact few tax problems will get the IRS going like payroll tax issues.
The Internal revenue services takes this very seriously and they have many draconian methods of collecting the money – none of them take into account keeping your business alive. The IRS can and will use the following means to collect back payroll taxes:
Send an IRS officer to your business
A bank levy on the business bank accounts to take the funds directly.
The company officers in some cases can be held personally liable for the tax debt
The IRS can even put a lock on your business and sell all of the assets at auction!
While it may be true that a business owner can reason out “I’ll use the payroll tax just this once to pay some bills and catch up later…” the IRS views this as stealing.
Not just stealing from the internal revenue service but also from your employees. In effect the business owner is simply spending their employees tax money. The employer is in a formal agreement to pay the employee’s taxes. This is where the term “Trust” comes in. If the money or even a portion of it is not paid to the IRS they will catch on fast. One way to remove the temptation of using or even making an honest mistake is to hire a payroll service. The payroll service will manage the businesses payroll and lift the burden and potential tax problems off of the business owner.
For the above reasons any business owner should always find another solution to financial troubles than using the payroll trust fund money.
If the IRS catches on and levies your bank accounts you will have created bigger problems for your business – possibly bouncing paychecks, vendor payments etc… So by solving one problem you create a far worse one.
If the business is simply financially unable to get back into compliance for the payroll trust fund they should immediately hire a qualified payroll tax attorney.
Trust Fund Recovery Penalty – What Is It Exactly?
Essentially the trust fund recovery penalty can used to collect from employees or officers that the IRS has determined knew of the tax liabilities, were in charge of financial decisions or in charge of making federal tax deposits. Yes you read that right. Officers of the company can be held personally liable for the unpaid taxes – an if so, the IRS will assess the Trust Fund Recovery Penalty onto the employee and pursue aggressive collection efforts against them until all of the money has been collected.
An officer or owner of a business may personally become liable for the Trust Fund portion of Business Payroll Taxes.
If you have or suspect you will be assessed a trust fund recovery penalty contact a qualified payroll trust fund lawyer immediately. Experienced tax lawyers in Utah will know the avenues available to negotiate with the IRS to settle the debt in more agreeable way.
An IRS Tax Attorney can help settle your affairs with the IRS and get you back on track if you find yourself on the opposite end of an IRS tax inquiry into your personal financial affairs or whether you have failed to settle your IRS debt. If you do find yourself in this predicament then there is an excellent chance that you will need some IRS tax debt settlement help.
The sanctions that the IRS can use against you in the event that they believe you have an outstanding obligation that you have failed to pay, despite their warnings are quite severe. Initially the IRS will attempt to recover any amounts due from you directly. If you do not respond to their correspondence and continue to decline or avoid paying then they will likely move to the next step in their enforcement process.
The best advice, should you find yourself in this situation, at this point would be to seek help from a suitably qualified and licensed IRS tax attorney. They will be able to provide you with the most qualified advice on how to deal with the IRS in your situation.
If you do however continue to do nothing the next step for the IRS would be to move to wage garnishment. This is a process by which they require your employer to pay over a significant part of your wages at the point of payment to you. If unexpected this can severely compound your financial difficulties and you would definitely need to seek IRS debt settlement help at this point. It is critical that one does not receive wage garnishment.
If you do not have an employer, and are self-employed the IRS will move straight to an IRS bank levy whereby they will require your bank to cancel your accounts and pay over a proportion to them to settle off your tax debt.
This type of action will potentially leave you without any control over your finances and this could lead to further very damaging losses. In order to avoid this you need to utilize the services of an IRS tax attorney and get some sensible IRS tax debt settlement help.
In difficult economic times just maintaining enough sales to keep your doors open and business operation can be a real challenge. So it’s easy to see why many businesses under financial pressure to either buy the supplies they need to continue fulfilling orders, pay their employes or other essential operating bills or skip make sure they are able to pay the payroll taxes. No to some it may seem a harmless thing to “borrow” from the payroll to pay operating bills, however the IRS will see this action as nothing short of stealing our employees tax obligations.
Faced with a tough choice of rob Peter to pay Paul now or deal with IRS payroll problems later many will make the choice to soldier on and worry about uncle Sam later. However do a little research and you will discover that back payroll taxes are all together a much more serious matter than back personal taxes. The basis of the payroll tax began with the Internal revenue code requiring every employer to withhold tax money for their employee’s social security, medicare and income tax from wages. Now many employers may get the wrong idea and feel that because this money is withheld from the check they can get creative with it and catch up later. The reality is, if you are spending money withheld for paying your employee’s federal income social security and income tax, then you are essentially stealing from both the federal government and your employees. After all this money simply does not belong to the employer even though they have possession of it.
As you can see this an entirely different matter than owning on your own income tax, now the business owner has interfered with tax collection from many people. The IRS will respond accordingly and harshly to any employer caught willfully failing to pay the Trust Fund or Payroll taxes from their company. The name “Trust Fund Tax” is actual ore accurate than “Payroll Tax” as the money should be handled as a trust by the employer.
As willfully not paying the payroll tax is breaking the Internal Revenue code the IRS has the authority to forcibly collect the tax money owed in addition to any interest and penalties tacked onto the original amount for being late. The IRS even has specially trained collection agents that will aggressively pursue collection efforts against the business including the individual offices. If the IRS is unable to get the business to pay the tax liability then they will take further action including padlocking the business and selling all of the assets at quick sale auctions. Worse still anyone shown to willfully with full knowledge of their responsibilities to pay the trust fund taxes can be help personally liable for the amount and may even face criminal charges.
If hard economic time have force your business to make risky bets against the IRS the legal services of an experience IRS tax lawyer should retained as soon as possible. A skilled tax attorney will have the knowledge to assess the situation and take the proper course of action to defense the interest of your business. However with IRS problems – particularly Trust Fund Tax Problems – the longer you wait to get help the worse it will be.
