“Navigating the ‘waters’ of tax law and civil tax procedure can be very complicated”

Tax problems can be very overwhelming.  Navigating the “waters” of tax law and civil tax procedure can be very complicated.  Whether you received a notice from the Internal Revenue Service stating that you are being audited or your wages/bank account are being levied because you owe back taxes or if you have state tax problems and your business has sales tax problems, the attorneys at Carr Law will meet with you to discuss how to help you or your business with these tax problems and all your Federal and State Tax Problems.

The attorneys at the Carr Law have specific  tax law education, training and experience in representing clients with federal and state taxing authorities in all types of tax problems and issues.  Attorney Nathan E. Carr will apply relevant tax law and procedure to each client’s individual set of facts.  Attorney Nathan E. Carr understands that each client’s situation is unique and as such he gives particular attention to each client’s  issues  - each case is important.

Unfiled Tax Returns

There are hundreds of thousands of taxpayers with unfiled tax returns in the United States.  If you are one of these, we understand your fear and can assist. A lot of taxpayers feel that if they come forward they will get into more trouble, others may feel that they don’t have the money to pay any liabilities that will be owed when they file these back returns so they just don’t file to avoid payment, even others think that if they keep quiet the Internal Revenue Service or State Tax Authorities may just forget about them.

This is the wrong mentality, as I will tell you, the longer you wait the more problems are created, the penalties and interest increase, the potential for criminal sanctions can increase.  So not doing anything will make the problems snowball into greater problems.

Also, if you don’t file your tax returns, many times the Internal Revenue Service will take information they have received through information returns, 1099’s, W-2’s, etc. and file tax returns on your behalf, known as Substitute for Returns (SFR’s).  When these returns are prepared they don’t include any deductions or exemptions, as they don’t have this information, as you can imagine this generally creates a lot larger liability than should exist.  Additionally, once these Substitute for Returns are prepared and assessed by the Internal Revenue Service they can begin collection action, including placing liens and levies on your property and wages.

Generally, if most taxpayers come forward and get compliant there are no criminal penalties or jail time assessed.  The most important thing is to come forward and get these returns prepared and get compliant.

At the Carr Law, we have the experience and expertise to assist people, and have assisted many taxpayers, in getting their unfiled tax returns prepared and getting them compliant and thus avoiding increasing and mounting additional tax problems, tax debt and tax headaches.

Collection on Taxes Liabilities Owed

The Internal Revenue Service and other State and Local Taxing Authorities only have a certain amount of time to collect from you from the date of filing.  Yes, there are things that will toll the statute of limitations, i.e. bankruptcy filing, offer in compromise filings; however if no fraud is involved and the tax returns have been filed, either by you or the taxing authority, then generally the debt will not stay on your record forever.

Please note the fact that the tax debt may not remain forever is not meant to inform you to do nothing and and just wait out for 10 years or however long until the tax liability goes away – this is not the cure; the reason for mentioning the existence of a  statute of limitation on collection is actually meant to inform you that the Internal Revenue Service and/or State Taxing Authorities know this and when it comes closer to the running of the statute of limitations (the time allowed for them to collect is running up) these agencies through their agents and employees will want to collect before it gets to late to get anything. This may be as harsh as seizing assets, levying wages, levying bank accounts, placing liens on property, contacting you via telephone or in person to get the tax liability paid.  In fact, the Internal Revenue Service has a division specifically created to collect the tax liability owed and have revenue officers to collect as well.

There are ways to stop the Internal Revenue Service and State Taxing Authorities to not collect in this time frame, generally the taxpayer must be compliant in filing all his returns, second the taxpayer can either pay the tax in full, third if the taxpayer is unable to pay the tax in full then he can enter into an installment agreement (which can be negotiated), fourth if the taxpayer can’t afford to make payments and it creates a economic hardship the taxpayer may qualify for a hardship status whereby they are placed on currently not collectible status.

At the Carr Law we can help in collection defense and we can help resolve the problems of tax debt collection.  Contact us today to schedule a FREE CONSULTATION to see how.

Installment Agreements

The Internal Revenue Service and State and Local Taxing Authorities have standards and forms whereby they can assess the ability to pay of the taxpayers.  These forms typically request to see what assets the taxpayers have, the taxpayer’s current monthly income, and the taxpayer’s current monthly expenses.  With this information the taxing agencies can determine the ability and the amount of the taxpayer to pay. 

The Internal Revenue Service and its agents and employees have to generally comply with the collection standards applicable in the Internal Revenue Manual.  The Internal Revenue Manual does allow for deviation, however only in certain cases and upon the discretion of the agent generally.  It is very fact based and oriented to each client’s situation however there are national and local standards that apply that must be taken into consideration as per each taxpayer’s current economic situation.  At the Carr Law we have the ability, knowledge and have been able to evaluate the taxpayer’s financial situation and the applicable guidelines and then make arguments for the taxpayer as to the appropriate acceptable amount that the taxpayer could afford and the taxing authority could accept in reasonable payments.

Currently Not Collectible Status / Hardship Status

Some taxpayers just don’t have any ability to pay their back taxes.  This status is not for all and the taxing authorities of course require proof to substantiate such hardship claims.  If after going through the taxpayer current monthly income and applying them to national standards and local standards and the taxpayers net monthly income is zero or negative then the taxpayer could qualify for currently not collectible status.  Under this status the taxing authority, i.e. the Internal Revenue Service cannot collect on the debt owed via levies, other than by taking any tax refunds owed the taxpayer.  The tax liability does remain and penalties and interest generally do continue to accrue.  Nonetheless, generally, if nothing else is occurring the statute of limitations on collection of the debt will continue to occur as such at the end of the period the debt will be wiped out.  The taxing authorities will look into the status to see if anything has changed at least yearly or bi-yearly.

Contact the Carr Law today to assist you with your tax liability including assistance with seeing if you qualify for hardship status and if so having you placed on hardship status.

Offers in Compromise

An agreement that resolves the taxpayer's tax debt is called an "offer in compromise."  This agreement is between a taxpayer and the IRS. By accepting less than full payment under certain circumstances, the IRS has the authority to settle, or "compromise," federal tax liabilities.

For the complete OIC policy statement, see IRS Policy Statement P-5-100.  The objective of the OIC program is to accept a compromise when it is in the best interests of both the taxpayer and the government. This helps promote voluntary compliance with all future payment and filing requirements.

Many taxpayers have come to Carr Law for relief from IRS problems.  Carr Law has the experience submitting Offers in Compromise that you should expect from tax lawyers. While all results are not typical, we have settled debts for much less than the amount our clients originally owed, saving them as much as 95% of their tax liability.  Our firm is standing by ready to help you to begin preparation to submit an Offer in Compromise

Levy Removal Assistance

When taxes don’t get paid then the Internal Revenue Service and State and Local Taxing Authorities have to utilize means, those authorized under the current prescribed laws and regulations, to collect the debt.  One of the most utilized forms of collection for the Internal Revenue Service and State Taxing Authorities is through the levy or garnishment process. 

The levy may be a continuous wage levy on a taxpayers current employment paychecks or it may be a one time levy on the taxpayer’s bank account for any funds in the account on the date of issuance.  Whatever it is, this levy can be very devastating on taxpayers, as most taxpayers live on a fixed budget and any monies taken away can throw off their entire financial balance. 

There are means whereby levies can immediately be removed. Sometimes the levy has created an economic hardship whereby the taxpayer will be evicted or lose a car as a result of the levy, if this is the case then sometimes the levy can be removed.  Also, generally after working with the either the Revenue Officer or Automated Collections Division of the Internal Revenue Service, or similar agencies of the State and Local Taxing authorities, the levy will be released and the taxpayer can be back to normal after working out a payment plan, being placed on hardship status, filing for collection due process hearing to discuss the liability or other collection defense techniques available under the current rules and regulations utilized by the Carr Law.  Contact the Carr Law today to let help you get out of the financial bind that a tax levy has placed on your current financial situation.

Penalty Abatement

Some times taxpayers have reasonable cause as to why the tax returns were not timely filed.  This reasonable cause may be because the taxpayer was suffering from significant medical problems, the taxpayers had a death in the family, a natural disaster, fire or storm destroyed their documents or other plausible reasons they may have made it difficult for the taxpayer to get the returns timely filed.  At the Carr Law we have experience in reviewing client’s facts and then making a case for abatement of penalties caused by late filing of the tax returns due to reasonable cause.  Contact us today to see if we can help you eliminate the tax debt and penalties.

Tax Motivated Bankruptcies

Tax debt can be discharged in bankruptcy.  It is a myth that taxes cannot be discharged in bankruptcy. Yes, generally some taxes cannot be discharged as they are more recent tax debts, they are related trust fund taxes, they were from unfiled tax returns, i.e. Substitute for Tax Returns; however a lot of tax liability could be discharged in a bankruptcy.  Contact the Carr Law to discuss your bankruptcy options as it relates to tax debt and see if bankruptcy may be right for you to resolve your tax problems.

Audit Representation

Receiving that letter stating that you have been chosen for an audit can be a very anxious and nervous moment, no matter your preparation, financial/tax experience and tax planning.  You may have many worries that you don’t know the answers to or may want some explanation and assistance during this process.    Typically there are three types of audits:

1. Correspondence Audit – you receive a letter from the IRS stating that either you failed to report income that was reported to the IRS, i.e. a Form W-2, or 1099, or you claimed a deduction and they want proof, this is the most typical and can generally be resolved by either filing an amended return or proving the documentation with appropriate substantiation;  
   
   
2. Office Audit – you receive a letter from the IRS to schedule a meeting with you at a local IRS Office, they will request that you bring a list of documents to support items on tax returns, generally the letter will be specific of what to bring;
   
   
3. Field Audit – you receive a letter from the IRS whereby the IRS agent will want to meet with you at your place of business, generally these audits are performed on businesses, however if you have reported self employment income on a Schedule C then you may a Field Audit of your home, especially if you have claimed the home office deduction, they will want you to prove this.

The essential thing is to be prepared.  Attorney Nathan E. Carr has represented clients in all of the above mentioned audits.  Having a qualified tax professional to represent you in an audit could save you a lot of stress.  Qualified tax professionals understand the tax law and procedures and will make sure the client’s best interests are protected and that the client’s rights are protected. 

Appeals

When an IRS audit ends up in an audit recommendation you do not agree with, Carr Law can represent you before the Appeals Office. Appeals Officers are often more experienced than the Revenue Agents who handle audits. The vast majority of disputed audits are settled during the appeals process. It is important to have someone who understands the procedure and has been there before. The IRS handles many appeals every year; you are only involved in one.

An aggressive and knowledgeable tax lawyer can make a huge difference in the settlement you will be offered during the appeals process. Like the taxpayers themselves, the IRS does not want to litigate these issues because of the time, expense, and risk of an unfavorable outcome. When the IRS loses a case, it sets a precedent that could cost them for years. A powerful tax disputes attorney on your side gives the IRS the maximum opportunity to lose. To avoid such a loss, the Appeals Officers look to settle these matters and avoid the courtroom altogether.

If the matter cannot be settled at appeals, the Appeals Officer will issue a Notice of Deficiency or “90 Day Letter.” This “90 Day Letter” is your ticket to the U.S. Tax Court. You can proceed to the U.S. Tax Court without paying the alleged tax owed if you file your petition in the Tax Court within 90 days of the issuance of the Notice of Deficiency. If you do not file a petition in Tax Court within 90 days, the proposed tax changes, interest, and penalties become assessed and owed.

While every taxpayer has the right to appeal their audit findings, be advised that the IRS Appeals Officer will be far more experienced and far more knowledgeable than the initial IRS audit Revenue Agent. It is imperative for any taxpayer with an IRS tax dispute heading towards appeals to immediately retain a skilled tax attorney to plan an effective overall appeal strategy. There are some taxpayers who will actually benefit more by not having an IRS Appeals conference. Also, detailed tax research will likely be needed to strengthen a taxpayer's settlement position. If you need to appeal IRS audit findings, THE TAX ATTORNEYS AT Proactive Tax Services, LLC can help you.

Tax Court Petitions

After an audit or determination of the Internal Revenue Service it may be that the taxpayer does not agree with the determination.  The taxpayer does have an opportunity to file a petition in tax court after receiving the Notice of Deficiency (“Ticket to Tax Court”).  Once received and all the proper information is submitted, the case is generally submitted to an Appeals Officer to evaluate the case and determine if the matter can be settled.  If the case cannot be settled through Appeals, the case is generally docketed (it may be even docketed before Appeals) and a date for tax court set whereby you the taxpayer can argue their case.

It generally is not as easy as it sounds above as their has to be an argument made, either based on previous case law or based on reasonable application of the Internal Revenue Code.  This requires legal research, analytical reasoning, and examination of the facts.  At the Carr Law we can assist in evaluating your case and filing a Tax Court Petition and making legal arguments on your behalf to either eliminate your tax liability or lessen the tax liability.  Contact the Attorneys at the Carr Law today to discuss your options.

Audit Reconsideration

If a taxpayer never disputed a tax assessment, the taxpayer may have an opportunity to still dispute the determination.  Generally, if the Internal Revenue Service files a tax return on the taxpayers behalf (known as a Substitute for Return “SFR”), the Internal Revenue Service will only use the information it has available via the tax reported information, i.e. W-2’s, 1099’s, 1098’s, etc., as such, as you can imagine the tax liability prepared by the Internal Revenue Service may be a lot higher than it would be if the taxpayer prepared their own return, as the taxpayer could have dependants, itemized deductions, credits, that the Internal Revenue Service does not know about.  As such the taxpayer has an opportunity to have the tax return prepared by the Internal Revenue Service reconsidered.  The audit reconsideration may be applicable to other areas as well, not just to SFR’s prepared by the Internal Revenue Service.  Please contact the Carr Law to see if audit reconsideration may be a good avenue to resolve your tax problems.

Business Tax Representation

Businesses, just like individuals can run into tax problems as well.  Much time it is for failure to file employee’s payroll tax returns, 941 returns, or even more likely, not remit over the withholding tax as they just don’t have the means to make a payment.  As many business taxpayers know this however can snowball out of control to where the business does not know how to pay these or get current.

The Internal Revenue Service and State Taxing Authorities do have the ability do have the ability to shut down ongoing business and they even have the ability to personally assess the “trust fund portion” (the employees portion that is required to be withheld from the employee’s pay).  What is unique about the Trust Fund Penalty Assessment is that unlike most business debts incurred by shareholders of a corporation or members of an LLC, is that the corporate shield or limited liability protection does not apply to the Trust Fund Penalty and any party who is responsible and willfully fails to remit these taxes over to the Internal Revenue Service can be liable.  This can be those who have check signing authority, control over which creditors get paid, control over the money, control over management of the company, corporate officers, managers, etc.

At the Carr Law we have experience working with businesses and business owners in helping them find solutions to their business tax problems and implanting these solutions to work on resolution of these problems at whatever stage of tax debt or problem they come to us. 

Trust Fund Recovery Assessment

The Trust Fund Penalty Assessment is asserted to those individuals who in generality are held to be responsible in non-payment of the payroll taxes, particularly the employee’s portion, and the non-payment was willful.  At the Law Offices of Nathan E. Carr we can help in the defense of this assessment.  The Trust Fund Penalty Assessment is a distinct tax liability as generally it cannot be discharged in bankruptcy.

Contact the Attorneys at the Carr Law today to discuss how we can help with resolution of this assessment or argue that you are not liable for the assessment.