Until recently, you may never have heard of a Federal Tax Lien. But once you began receiving harassing phone calls and letters from the Internal Revenue Service trying to collect your Federal Tax Debt, you probably hear about Federal Tax Liens much more than you care to. On a positive note, you are not alone. In this weakened economy, more and more Bostonians are having trouble keeping up with their Federal Tax Debt. On a negative note, though, this Federal Tax Lien can make your life very difficult. Consider getting help from a Boston area attorney licensed in Tax Law right away.

You might think you do not need help from an attorney with your Federal Tax Lien. You may have fought off aggressive creditors before or have experience with a prior lawsuit. No matter what financial or legal difficulties you have survived thus far, know that fighting the Internal Revenue Service and a Federal Tax Lien are unlike anything you have ever done before. You are not battling a bank or someone in a courtroom. When you fight the Internal Revenue Service, you are fighting the United States Federal Government. This is serious, perhaps more serious than you may realize.

How Does a Federal Tax Lien Work?

In layman’s terms, a Federal Tax Lien gives the Internal Revenue Service the legal right to receive money from the sale of your home before you do. And the Lien does not expire, so it stays in effect until you sell your home, whether that happens in one year or forty years. As soon as you sell your home, the Internal Revenue Service will step in and collect the full amount of your Federal Tax Lien from your home sale proceeds before you ever receive a dime.

Once the Internal Revenue Service levies a Federal Tax Lien against your property, you will receive written confirmation of:

• The property address against which the Federal Tax Lien is filed;
• The Federal Tax Lien amount;
• The county in which the lien is recorded; and
• Contact information for the Internal Revenue Service.

The Internal Revenue Service uses Federal Tax Liens because they are incredibly effective. They know that if you cannot pay your Federal Tax Debt, more often than not you cannot pay other debts, too. Perhaps you need to adjust your standard of living by moving into a more affordable home. You may plan to sell your current home, using some of the profit to make multiple payments on several debts as well as making a down payment on a more affordable home. Your Federal Tax Lien will prohibit you from doing so; that home sale profit you are counting on to pay down debts and make a down payment on a more affordable home will now go to Internal Revenue Service. You have very little power on your own to stop them.

You may not yet have realized other ways that your Federal Tax Lien can change your financial plans:

• Paying-Off Your Federal Tax Debt: Most Bostonians would be shocked to learn that your Federal Tax Lien can actually make it harder for you to pay-off your Federal Tax Debt. In the best situation, you would find a higher paying job that would allow you to quickly pay-off your Federal Tax Debt. But if that dream job is a distance away, you may need to sell your current home and relocate, using some of your home sale profits as a down payment on a new home near this dream job. Everything changes with your Federal Tax Lien. Your home sale profits go to the Internal Revenue Service until your Federal Tax Lien is satisfied. You may not have enough money leftover for a down payment on that home near your dream job. In this scenario, you may be unable to take the very job that would allow you to pay-off your Federal Tax Lien, all because of your Federal Tax Lien.

• Your Credit Score: The Federal Tax Lien could damage your credit score with Equifax, Experian, and TransUnion, the major credit-reporting agencies. Unfortunately this could cost you more in higher interest rates on future credit, as well as prevent you from getting future credit at all or even cause you to lose out on insurance or employment opportunities.

• Retirement or Other Large Financial Decisions: If you have planned your whole life to sell your home at some point and use your equity to fund retirement or college, your plan may need revisiting. Your Federal Tax Lien keeps you from using your equity the way you desire, since the Internal Revenue Service will be first in line to use it against your Federal Tax Lien.

Are you beginning to see that Federal Tax Liens can damage your family’s future?

But it can get even worse. Should you decide you have had enough hassles with the Internal Revenue Service and you just want to sell your home to get rid of the Federal Tax Lien, you still may not be rid of the Internal Revenue Service. Particularly in areas of Boston where housing prices artificially low, your home sale profit may not cover what you owe the Internal Revenue Service. Should that happen, the Internal Revenue Service will still be after you, and you will be without a home or a down payment to get another one.

Even worse than that, after the Internal Revenue service takes what they can as payment against your Lien, you might not have enough left to pay-off your mortgage. So you could be without a home, unable to make a down payment on another home, possibly still in debt to the Internal Revenue Service AND still owing on your former home that someone else now owns.

So How Can I Hope to Survive This?

Before doing anything else, contact a Boston area attorney licensed in Tax Law. Stop thinking that you can fight the Internal Revenue Service and win on your own. Were you able to resolve the problem before they started threatening you with a Federal Tax Lien? Remember, the Internal Revenue Service is not your average adversary. They have the full authority and resources of the United States Federal Government behind them, and they are good at getting money out of people who really do not want to pay.

Here is one last point to consider. Frequently the Internal Revenue Service will accept a small percentage of what you owe as payment in full of your Federal Tax Debt. You have probably yet to hear them offer you that option. But reaching a deal on a lower payment takes prior experience, expertise, and knowledge that most people simply do not have. In all likelihood, all of your conversations and correspondence with the Internal Revenue Service thus far probably have not improved your situation at all. Stop wasting your time and risking your family’s security. Make a smart decision. Find an advocate in the Boston area who can help you with your tax problems today.

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Excerpts from a news article posted by Robert Snell of the Detroit News on Monday, May 20, 2010 at 12:32 pm, read: “Golf star John Daly may have slimmed down, but he’s got a big, fat tax debt. The chain-smoking, beer-swilling Hooters patron and reality-show star owes more than $1 million in delinquent federal income taxes, according to public records. Daly, 44, won the 1991 PGA Championship and 1995 British Open but his career has been plagued by personal problems.

Though Daly has earned more than $9 million during his career, he made only $248,501 on tour in 2007 and $56,017 in 2008. The IRS filed a $1,050,733 lien against Daly on Monday with the Shelby County (Tenn.) Register of Deeds. According to they lien, he owes income taxes from 2007 and 2008. The address on the lien is his home in Memphis, Tenn. It is for sale for $698,000. A Daly spokesman could not be reached immediately for comment.”

Many of you who live in or around Memphis, Tennessee, may have recognized this article, but even famous sports stars like John Daly can have trouble with their taxes. Taxation within the United States is a complex system and includes a wide array of taxation entities. There are a variety of governments that can tax you. They include: taxation from local governments possibly including one or more of municipal, township, district, and county entities; regional entities such as school, utility, and transit districts; state governments; and the federal government. Each of these government entities have their sets of complex laws, so, it is very hard for the average citizen to go through life without having some type of taxation problem. Being famous may even make you a tax target.

To complicate matters even further, within each government entity, there can be a variety of different sources used to tax you. You can pay tariffs, sales tax, income tax, recessive taxes, social security taxes, property taxes, progressive taxes, unemployment insurance taxes, corporate taxes, excise taxes, estate taxes, transfer taxes, gift taxes, and this list is not conclusive . Is there any wonder that a legion of bookkeepers are hired by the private and public sectors just to keep up with the various taxes in order to help alleviate the problems? Also, with so many different sources of taxation and entities you must annually satisfy, is there any wonder that mistakes are made? Are these complications made by our lawmakers for a reason?

For the most part, most of these government entities will try to help you alleviate the mistakes by providing you with educational material through free publications, websites, and call help centers. Most will help you figure the math on what you owe and will work with you in wide variety of ways. In the event you do have problems, you still have legal rights. The Taxpayers Bill of Rights III was enacted July 22, 1998 for the purpose of protecting your rights as a taxpayer under federal law. One of the most important rights you have as a taxpayer is the right to representation before any taxing entity. With all the complications and different laws for each individual taxing entity and sources, do you think it would be wise to have help in facing tough taxing issues? I bet if you asked sports star John Daly that question, he would say yes without any hesitation.

So, it doesn’t matter whether or not you are famous sports star or an average person, you have to pay taxes, but you do not have to get ripped by the taxing entities in doing so. The real question should be then, what is your fair share of taxes within each taxing entity? Each individual taxpayer will have to answer that question for his or herself. If you live in or around the area of Memphis, Tennessee, stop allowing the taxing authorities to rip you on what is too complicated for you to understand. Contact us today and we will get you in touch with a tax professional in your area who will be able to help you answer all the questions you may have about tax law.

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The Texas War for Independence against Mexico concluded with the surrender of the Mexican President and General Antonio Lopez de Santa Anna at the Battle of San Jacinto in 1836. The Republic of Texas was the result. Prior to Texas independence, Mexico, only fifteen years earlier gained its independence from Spain in 1821 with the signing of the Treaty of Cordoba. On October 4, 1824, Mexico adopted a new constitution which defined the country as a federal republic with nineteen states and four territories. The former province of Spanish Texas became part of a newly created state, Coahuila y Tejas, whose capital was at Saltillo, hundreds of miles from the former Texas capital, San Antonio de Bexar, now known today as San Antonio, Texas

The new Mexican country emerged from their war for independence bankrupt, and with little money for the military, Mexico encouraged immigration from the United States to Tejas for protection against hostile Indian tribes. The immigrants were promised no property taxes for ten years to immigrate. As the drove of immigrants came to take advantage of the low taxes and living expenses, it was not long before the Mexican-born settlers in Tejas were vastly outnumbered. By 1834, it was estimated that over 30,000 Anglos lived in Coahuila y Tejas, compared to only 7,800 Mexican-born citizens. By 1836, there were approximately 5,000 slaves brought into Tejas by the mostly southern immigrants. To address this situation, President Anastasio Bustamante implemented several measures on April 6, 1830. Chief among these was a prohibition against further immigration to Tejas from the United States, although American citizens would be allowed to settle in other parts of Mexico. Furthermore, the property tax law, intended to exempt immigrants from paying taxes for ten years, was rescinded, and tariffs were increased on goods shipped from the United States. Bustamante also ordered all Tejas settlers to comply with the federal prohibition against slavery or face military intervention. For the most part, the Texians ignored the new laws. The rest of the story is history.

It might be amazing to know how many Texans today realize that one of the major disputes that spawned our state was a dispute over taxes. Taxation without representation is what spawned the United States of America. As a result, our Constitution guarantees us that we as citizens will not be taxed without representation. Today, it is the law for you to be represented before any taxing authority. Our federal government spells out your right to be represented on their Internal Revenue Service (IRS) website. The site lists your Taxpayer Bill of Rights, and states you, as a US taxpayer, have the right to:

• be treated professionally, fairly, promptly, and courteously by IRS employees and Private Collection Agencies contacting you on behalf of the IRS;
• disagree with your tax bill;
• meet with an IRS manager if you disagree with the IRS employee who handled your tax case;
• appeal most IRS collection actions;
• have your case transferred to a different IRS office if you have a valid reason;
• be represented by someone when dealing with IRS matters;
• and receive a receipt for any payments you make.

I suppose there is nothing that will make a free-minded person more angry than to feel you have not been represented fairly when it comes to being forced to pay taxes. These feelings are so strong that they have even caused wars, so, is there any wonder about the emotions that can occur between a taxpayer and a taxing entity responsible for the collection of the taxes?

To make matters worse, our tax laws are complicated. It doesn’t matter whether or not the taxing entity is federal, state, or local, they all seem to be complicated. It doesn’t matter what nationality you are because the complication of these laws seems to be in all countries. The complication of tax law within our American system is why most people need a representative, to even out the playing field, to make it fair. In Texas today, these representatives are called tax attorneys. If you live in or around the metropolitan area of San Antonio, and you have been faced with a taxing dilemma, contact us today and we will get you in touch with a tax professional in your area who will be able to help you answer all the questions you may have about tax law.

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The phrase “No Taxation Without Representation!” was coined by Reverend Jonathan Mayhew in a sermon give in Boston, Massachusetts in 1750. By 1765, the term “no taxation without representation” was in use in Boston, but no one is sure who first used it. Boston politician James Otis was most famously associated with the phrase, “taxation without representation is tyranny.” The phrase eventually became a rallying cry for the British colonists who eventually rebelled against the British Crown to gain independence during the American Revolutionary War. As Americans today, we owe the justice minded spirit of the Bostonians great homage for their willingness to speak freely their minds. Certainly taxation without representation was not for the Bostonians back then, and certainly it is not for the Bostonians today. Therefore, it does not surprise me that they have protected their right to representation throughout the years.

Being the most populous city in Massachusetts, Boston surely influenced the state legislature when it wrote the Massachusetts Taxpayer Bill of Rights. One of the tenets within the Taxpayer Bill of Rights publicly displayed on the Massachusetts Department of Revenue website plainly states, “you may obtain representation at any point in your dealings with the Department.” To some, this statement may seem insignificant or automatically taken for granted, but there are many places around the world that do not enjoy that type of freedom, let alone right. Please notice that in the statement it says you may obtain representation “at any point.” I do a lot of legal research, have been researching all the state’s Taxpayer’s Bill of Rights, and Massachusetts is the only one I remember that includes the phrase. Many states leave out your right to representation, say only that you have the right to be represented, remind you of your right to represent yourself, but only Massachusetts thought it important enough to remind the taxpayer you have a right to be represented “at any point.”

There are many states that do not have a Taxpayer Bill of Rights. Thank goodness our federal government hasn’t forgotten our history so fast. They passed their own Taxpayer Bill of Rights and is posted on the Internal Revenue Service website. It states you, as a United States taxpayer, have the right to:

• be treated professionally, fairly, promptly, and courteously by IRS employees and Private Collection Agencies contacting you on behalf of the IRS;
• disagree with your tax bill;
• meet with an IRS manager if you disagree with the IRS employee who handled your tax case;
• appeal most IRS collection actions;
• have your case transferred to a different IRS office if you have a valid reason;
• be represented by someone when dealing with IRS matters;
• and receive a receipt for any payments you make.

Yes, you have a right to be represented by someone when dealing with IRS matters. By the way, it is also your Constitutional right. It is covered under the Sixth Amendment to the Constitution and is a part of your Constitutional Bill of Rights. Of course, the right to counsel in the Sixth Amendment is talking about criminal cases, but sometimes dealing with tax matters has led to these type cases.

I do personally believe with all my heart that taxation without representation is tyranny. The good news is that you have the right to representation. The bad news is at any point, not all things will go right for every taxpayer. You can be facing an audit, levy, seizure, foreclosure, or incarceration, and if this is so, it is a good idea that you exercise your right to have representation by getting in touch with a tax attorney. If you live in or around the metropolitan areas of Springfield, Worcester, or Boston in Massachusetts, and you have been faced with a taxing dilemma, contact us today. We will get you in touch with a tax professional in your area who will be able to help you answer all the questions you may have about tax law.

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Dawn Wells was born in Reno, Nevada in 1938. She later went on to become Miss Nevada and then became even more famous as an actress playing Mary Ann Summers on TV’s Gilligan’s Island during its run from 1964 through 1967. She ultimately starred in many TV series and a few lesser known movies.

Today, after a successful career, Wells finds herself owing the state of California more than $80,000 in delinquent taxes. The tax problem surfaced last year after the 71 year old actress filed a chapter 7 bankruptcy in California. After declaring in bankruptcy court $1.5 million in liabilities with only $1.38 million in assets, the state of California filed an $80,520 lien against Wells on March 24 with the Los Angeles County Recorder of Deeds. That means the former Miss Nevada and actress is in a lot of tax trouble.

You don’t have to be famous, an actress, or a Miss anything to be in tax trouble. If you live in or around the areas of Reno or Las Vegas in the state of Nevada, you are not alone when it comes to having tax problems of one sort or the other because there is more than one type of tax problem.

Taxation within the United States is a complex system and includes a wide array of taxation entities. There are a variety of governments that can tax you. They include: taxation from local governments possibly including one or more of municipal, township, district, and county entities; regional entities such as school, utility, and transit districts; state governments; and the federal government. Each of these government entities have their sets of complex laws, so, it is very hard for the average citizen to go through life without having some type of taxation problem. To complicate matters even further, within each government entity, there can be a variety of different sources to tax you. You can pay tariffs, sales tax, income tax, recessive taxes, social security taxes, property taxes, progressive taxes, unemployment insurance taxes, corporate taxes, excise taxes, estate taxes, transfer taxes, gift taxes, and this list is not conclusive .

For the most part, most of these government entities will try to help you alleviate the mistakes by providing you with educational material through free publications, websites, and call help centers. Most will help you figure the math on what you owe and will work with you in wide variety of ways.

In the event you do have problems, you still have legal rights. The Taxpayers Bill of Rights III was enacted July 22, 1998 for the purpose of protecting your rights as a taxpayer under federal law. Most states also have their own bill of rights when it comes to tax questions, but Nevada is one state that has not passed one as to date. Nevertheless, the federal government has posted its Taxpayer Bill of Rights on its IRS internet website. It states you, as a United States taxpayer, have the right to:

• be treated professionally, fairly, promptly, and courteously by IRS employees and Private Collection Agencies contacting you on behalf of the IRS;
• disagree with your tax bill;
• meet with an IRS manager if you disagree with the IRS employee who handled your tax case;
• appeal most IRS collection actions;
• have your case transferred to a different IRS office if you have a valid reason;
• be represented by someone when dealing with IRS matters; and

receive a receipt for any payments you make.

If you live in or around the areas of Reno or Las Vegas in the state of Nevada, and you are having problems resolving tax issues with any of the previously mentioned government entities, you have the right to be represented by a tax attorney. It is the law, so contact us today, and we will get you in touch with a tax lawyer in your area who will be able to help you answer all the questions you may have about tax law.

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If you live in or around the area of Chicago, Illinois, there is a special program to help you with tax problems that cannot be resolved through normal IRS channels. (This information can be found at www.irs.gov on publication 594). “The Taxpayer Advocate Service is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. You may be eligible for assistance if you:

• are experiencing economic harm or significant costs which would also include fees for professional representation;
• have experienced a delay of more than 30 days to resolve your tax issue; or
• have not received a response or resolution to the problem by the date promised by the IRS.

According the IRS website, this service is free, confidential, tailored to meet your needs, and available for businesses as well as individuals. There is at least one local taxpayer advocate in each state, the District of Columbia, and Puerto Rico. Because advocates are part of the IRS, they know the tax system and how to navigate it. If you qualify, you will receive personalized service from a knowledgeable advocate who will:

• listen to your problem;
• help you understand what needs to be done to resolve it; and
• stay with you every step of the way until your problem is resolved.

You may contact the Taxpayer Advocate Service by:

• calling their toll-free case intake line at 1-877-777-4778 or TTY/TTD 1-800-829-4059;
• writing or calling your local taxpayer advocate whose address and phone number are listed in the government listings in your local telephone directory and in Publication 1546, The Taxpayer Advocate Service of the IRS – How to Get Help With Unresolved Tax Problems;
• filing Form 911, Application for Taxpayer Assistance Order, with the Taxpayer Advocate Service; or
• asking an IRS employee to complete Form 911 on your behalf.”

Obviously, the IRS is making an attempt to overcome the complexities of our tax system. The old days of harsh dealings with most tax payers has been replaced with this modern version of compassionate understanding and education. Contrary to some held views, many of the IRS employees do care about their work and their clients-you. They demonstrate how much they care by donating their time to help you resolve some difficult issues at no additional costs. The service is real and works for many.

Unfortunately, there are some that do not qualify for the program or that the program fails to help. You should try this program before seeking out legal alternatives. In the event you still need legal counseling, you will need to consult with a tax attorney. If you live in or around Chicago, Illinois,  contact us today at and we will get you in touch with a tax lawyer in your area who will be able to help you answer all the questions you may have about tax law.

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According to news articles posted on the internet in May 2010, agents from the U.S. Postal Inspector and the Internal Revenue Service (IRS) raided the offices and home of a prominent Twin Cities real estate developer May 18. The federal agents issued search warrants at Ned Abdul’s offices at Butler North and his home in Deephaven, Minnesota. Abdul’s Minneapolis holdings include the Lumber Exchange building, the Whitney Hotel, and two nightclubs. TV crews on the scene claimed to have seen the federal agents carrying out boxes of files from Abdul’s Swervo Development Corporation in downtown Minneapolis.
Most of you who live in or around the Minneapolis areas of Minnesota probably recognize this story.

What is interesting about this story is the fact the IRS was involved with the investigation of this local company. Typically, the U.S. Postal Service and the IRS investigate such things as financial fraud and tax issues, but nevertheless, of such notoriety is what makes all the horror stories about the IRS jump to life.

In our modern society, the IRS has come a long way to help bridge the gap between the old IRS horror stories that use to dominate local tax stories to a more gentle approach of education. Our government, along with the rest of us, has recognized how complicated our system of tax collection really is. The new approach is helping but not necessarily alleviating all the problems. Probably the most important rights you have is being able to be represented when the need arises. Even though the IRS has come a long way in trying to work with the common tax payer, they still have unparalleled authority when it comes to implementing the law. Paying your income taxes is the law despite what many believe or have said. The Sixteenth Amendment to the Constitution was ratified in 1913 giving Congress the power to “lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

With current stories like this one in Minneapolis still hitting the news upon occasion, the IRS still has a long way to go in alleviating its negative images. We do not know all the details to this particular incident in Minneapolis that was reported in the news, but we do know you have protected rights by law that are recognized and posted on the IRS website. You, as a United States taxpayer, have the right to:

• be treated professionally, fairly, promptly, and courteously by IRS employees and Private Collection Agencies contacting you on behalf of the IRS;
• disagree with your tax bill;
• meet with an IRS manager if you disagree with the IRS employee who handled your tax case;
• appeal most IRS collection actions;
• have your case transferred to a different IRS office if you have a valid reason;
• be represented by someone when dealing with IRS matters; and
• receive a receipt for any payments you make.

Even though our government is trying to bridge the gap between taxpayers and itself, scenes like these in Minneapolis will hopefully be the exception to the rule. For what ever reasons, some of you will still have problems and misunderstandings with the IRS that seem to be unsolvable. When this happens, you are going to need legal counsel from a tax attorney. If you believe you have unresolvable problems with the IRS, it is your right by law to be represented. So, if you live in or around the areas of Minneapolis, Minnesota, contact us today at and we will get you in touch with a tax lawyer in your area who will be able to help you answer all the questions you may have about tax law.

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You can avoid these common goofs if you will pay close attention or get qualified help in preparing your tax return. Any of these costly mistakes can not only cost you money, but they may cost you an audit and confrontation with the IRS. They are:

1. Claiming the wrong filing status. Your filing status determines a number of tax benefits like the child tax credit, earned income tax credit and dependent exemptions. Filing status choices are single, married filing jointly, married filing separately, head of household, and qualified widow with dependent child. Each choice comes with requirements. Making the wrong status choice can cost you money and a date with the IRS.
2. Claiming ineligible dependents. Make sure your dependents qualify for such, because if they do not have Social Security numbers, the IRS may disallow the exemption.
3. Failing to report all income. This means you should report every source of income, even if you don’t get a W-2 back from an employer, or a 1099 form from someone else you did work for. If these sources are ever found out, the penalties are stiff and can carry criminal prosecution.
4. Bad Math. Although your bad math may be an honest mistake, the IRS takes your returns very seriously. Make sure to double check your math and know your figures are correct. Failures in figuring you taxable income, tax amount, deductions, capital gains, credits, or money you owe or due as a refund are all red flags to the IRS. Making these “honest” mistakes can cost you an audit or a penalty.
5. Not filing the right forms. IRS instructions go to a lot of trouble to spell out who has to file which form. Filing the wrong form raises a red flag for an audit. The IRS makes publications that will instruct you in which forms to use. Supporting documents and schedules must be filed for certain deductions, credits and other items. One of the most neglected forms to file on time is the self employment tax forms. They have to be filed correctly and timely.
6. Using the wrong social security numbers. If you miss write or incorrectly use the wrong social security numbers, they will not match your government records. The IRS may disallow exemptions, credits, and deductions when this happens.
7. Failing to sign and date your return. If you do not sign or date your return, the IRS does not consider the return filed. Even E-filed returns have to be electronically signed.
8. Not claiming or misusing the earned income tax credit. Millions of low-income families qualify, but do not claim it for a variety of reasons. There are many who do not understand the requirements for claiming the earned income tax credit and do anyway.
9. Failing to report documented workers. Some taxpayers do this to avoid paying Social Security taxes or Medicare taxes for their workers, but it is against the law. It will cause the IRS to not only audit you, but they can even charge you with criminal violations.
10. Failing to check whether or not you are subject to the alternative minimum tax. If your deductions and taxes are so high as to wipe out much of your tax liability, it is a good chance you may be subject to the alternative minimum tax. This relatively new tax is a parallel tax system designed to make sure the wealthy pay their fair share, but you do not have to have vast wealth to fall under the tax. It is best to check.

If you live in or around the Santa Fe area of New Mexico, and you are facing an audit due to one or more of these common mistakes, you may need legal representation in the form of a tax attorney. Contact us today, and we will get you in touch with a tax lawyer in your area who will be able to help you answer all the questions you may have about tax law.

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The IRS offers a variety of IRS tax settlement options which may allow Wyoming taxpayers to repay their tax debt for a fraction of the full amount owed. The federal government has given the Internal Revenue Service (IRS) sole authority to determine how much money they are willing to accept to settle IRS tax debt. The IRS will only accept less than the full amount of tax owed if they do not believe the taxpayer can pay the IRS tax debt with a lump sum payment or an installment agreement.

Wyoming taxpayers who do not pay their federal tax debt can become the target of aggressive IRS collection actions and may face bank account levies, property repossession or wage garnishments. It is not a good idea to ignore the IRS. Wyoming taxpayers who want more information about how they can settle their IRS tax debt can contact a tax professional for help.

Offer in Compromise

Offer in Compromise is one of the most popular IRS tax settlement options available. Offer in Compromise may allow a taxpayer to make a settlement offer to the IRS to settle their IRS tax debt for a fraction of the full amount owed. The IRS can deny, accept or negotiate the Offer in Compromise offer. If the Offer in Compromise is accepted, the amount outlined in the OIC agreement will be considered settled. The IRS currently accepts approximate 20% of the OIC offers it receives (more may be accepted after negotiations or on appeal). Wyoming taxpayers will not have any legal recourse to compel the IRS to accept an OIC offer if all OIC appeals have been exhausted.

After the OIC is accepted penalties and interest will stop accruing and the IRS will stop their collection actions. An Offer in Compromise can be expensive, time consuming and difficult to implement. The IRS will also need large amounts of detailed information to process the OIC and if it is denied, they can use this information to continue to collect the tax debt. Offer in Compromise may allow the Wyoming taxpayer to settle their IRS tax debt for a fraction of the amount owed, but it may not be the best IRS tax settlement option for all Wyoming taxpayers.

Qualifying for Offer in Compromise

Not all Wyoming taxpayers who request an Offer in Compromise will be eligible for one. Taxpayers must meet one of the following:

• Doubt as to Liability- An Offer in Compromise will be accepted if there is some doubt as to the amount of tax debt assessed against the taxpayer. Errors can result from a miscalculation, misapplication of federal tax law or if the taxpayer provides additional tax information which has not previously been considered.
• Doubt as to Collectibility- Under this condition the amount of IRS tax debt is not in question, only the ability of the IRS to collect the debt. An OIC also may be granted under this condition if the IRS has determined it is too expensive to collect the tax debt.
• Effective Tax Administration- Wyoming taxpayers who may suffer a hardship which is inequitable or unfair may receive an Offer in Compromise. This condition is most frequently used for the handicapped and the elderly.

The Wyoming taxpayer must also meet the following requirements:

• Taxpayers must pay all IRS tax debt before the federal deadline for the next five years.
• Taxpayers must make their Offer in Compromise payments.
• Taxpayers must submit their federal tax forms and additional documentation to the IRS by the federal tax deadline.

Installment Agreement

Most taxpayers use installment agreements to repay their IRS tax debt. Installment agreements allow the Wyoming taxpayer to pay all of their IRS tax debt in monthly installment payments. Installment agreements will be for a specified time period which will vary based on the amount of tax which is owed.

Wyoming taxpayers who owe $25,000 or less can generally qualify for an installment agreement. Wyoming taxpayers who owe $25,000 or more should contact a tax professional (certified public accountant, tax attorney or enrolled agent) for help negotiating with the IRS.

Installment agreements will not stop penalties and interest from accruing on the outstanding tax debt, but will stop the IRS from continuing their collection actions. It is always less expensive to pay tax debt with a one time lump sum payment if possible. The IRS has the authority to cancel an installment agreement for many reasons including any of the following:

• Wyoming taxpayers do not make their full installment payments or they pay less than the agreed upon amount. First time violators may be granted a 30-60 day grace period.
• Wyoming taxpayers fail to file a federal tax return each year.
• Wyoming taxpayer’s financial situation dramatically improves.
• Wyoming taxpayers provide inaccurate financial information to the Internal Revenue Service on the installment agreement application.
• Self-employed Wyoming taxpayers fail submit tax returns each quarter or pay quarterly tax payments.
• Wyoming taxpayers did not make their federal tax payments for the five years before the tax debt which can not be paid.
• Wyoming taxpayers have had another installment agreement within the last five years.

Partial Payment Installment Agreement

If a Wyoming taxpayer does not qualify for an Offer in Compromise or can not make the full installment payments with an installment agreement, they may be able to repay IRS tax debt with a partial payment installment agreement or PPIA. The PPIA is simple, less expensive and easier to use than an Offer in Compromise. The PPIA will stop all collection actions, but it will not stop penalties and interest from accruing on outstanding tax debt.

The PPIA, like the installment agreement, will allow the taxpayer to repay tax debt with monthly installment agreements, but unlike the installment agreement, the PPIA will allow the Wyoming taxpayer to make partial payments each month. The IRS must agree to the plan, and if they do, all the debt not included in the PPIA will be considered settled.

The PPIA will be reviewed by the IRS every 2 years and if the Wyoming taxpayer’s financial situation has substantially improved, the IRS may require the taxpayer to pay more each month or completely cancel the PPIA.

Currently Not Collectible

Certain Wyoming taxpayers may have outstanding IRS tax debt which they are not able to repay. If the IRS agrees, they may change the tax status to “currently not collectible”. This tax status will stop all collection actions against the taxpayer but will not stop penalties and interest from continuing to accrue.

The IRS will send written notification each year to the Wyoming taxpayer updating them on their tax status, but this notice is not considered a tax bill. The IRS has 10 years to collect all tax debt before the statute of limitations expires and the debt is forgiven.

Penalty Abatement

Wyoming taxpayers may be assessed tax penalties if they fail to file a tax return, do not pay their taxes, misrepresent their tax information or request a false refund. The IRS may, with a valid reason, be willing to abate or lower a Wyoming taxpayer’s penalties. Valid reasons might include: personal duress, poor physical or mental health or bad professional tax advice.

The IRS may not be willing to lower all penalties. Wyoming taxpayers who need more information about penalty abatement should contact a tax professional for help.

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The Internal Revenue Service or IRS as part of the Department of Treasury has the authority to collect federal taxes to fund the activities of the federal government. If taxpayers refuse to pay their taxes the IRS can compel them to pay with several aggressive collection methods including: repossessing business or property assets, freezing money in taxpayer’s accounts, garnishing wages or imprisonment.

South Dakota taxpayers who owe IRS tax debt may be able to stop these aggressive debt collection tactics by using an IRS tax settlement option. Under certain circumstances the IRS may be willing to negotiate a tax settlement if the IRS believes it will help South Dakota taxpayers meet their future tax obligations.

South Dakota taxpayers can contact a tax professional (enrolled agent, certified public accountant or tax attorney) who can provide information to them about their IRS tax settlement options.

Offer in Compromise

Offer in Compromise or OIC is one method South Carolina taxpayers can use to pay IRS tax debt. OIC will allow South Dakota taxpayers to offer a sum of money to settle all IRS tax debt. If the IRS accepts the offer, all penalties and interest will stop accumulating and the IRS will stop all tax collection actions. Offer in Compromise may allow South Dakota taxpayers to pay less than the full amount of tax owed.

The Internal Revenue Service does not accept all OIC offers. In fact, up to 80% of first time OIC offers may be rejected. The IRS may be willing to negotiate until an offer is found which is acceptable to both the federal government and the South Dakota taxpayer.

Offer in Compromise can be complicated, difficult to implement and expensive. The IRS will need detailed financial records to determine if they will accept the OIC. If they reject the OIC offer, they may be able to use the data they have gathered to continue debt collection. Offer in Compromise may be one way to settle tax debt for less than the full amount of money owed, but it may not be the best option for all South Dakota taxpayers.

Qualifying for Offer in Compromise

Not everyone who applies for an Offer in Compromise will qualify for one. Offer in Compromise will only be accepted if the South Dakota taxpayer meets one of the following:

• Doubt as to Liability- If there is doubt as to the amount of tax debt owed the IRS may be willing to accept an Offer in Compromise. This does not occur often, but discrepancies can occur if the IRS makes a miscalculation or if they misinterpret tax law.
• Doubt as to Collectibility- Under this condition the amount of tax debt is not in question, only the ability of the IRS to collect the debt. The IRS may also accept an OIC if they determine the cost of debt collection is too high.
• Effective Tax Administration- If paying IRS tax debt causes a South Dakota taxpayer to suffer a hardship which is inequitable or unfair the IRS may accept an Offer in Compromise. This condition is mainly used for the handicapped or the elderly.

South Dakota taxpayers must also complete the following tasks:

• South Dakota taxpayers must pay all of their future federal tax debt on time for the next 5 years.
• South Dakota taxpayers must meet their Offer in Compromise requirements.
• South Dakota taxpayers must submit their federal tax returns before the federal tax deadline.

Installment Agreement

The most common method used by taxpayers to repay tax debt is an installment agreement. Installment agreements allow the South Dakota taxpayer to pay their IRS tax debt in small manageable monthly installment payments. Generally it is not too difficult for taxpayers to qualify for an installment agreement if they owe $25,000 or less in IRS tax debt. South Dakota taxpayers who owe more than $25,000 in tax debt should contact a tax professional for help negotiating with the IRS.

Installment agreements will not stop penalties and interest from accruing, but they will stop the IRS from collecting the tax debt. It will always be less expensive for South Dakota taxpayers to pay all tax debt with a lump sum payment and avoid an installment agreement.

The Internal Revenue Service can revoke or refuse the installment agreement if the South Dakota taxpayer:

• Fails to file all future tax returns or pay their federal tax obligations after the installment agreement is accepted
• If their financial status substantially improves. The IRS may review the installment agreement every two years.
• Fails to make all of the required installment agreement payments or makes only partial payments. The IRS may give first time violators 30-60 days before the installment agreement is revoked.
• Reports false financial information on the installment agreement application.
• Fails to pay their tax debt for the five years before the tax liability which can not be paid.
• If they have had another installment agreement with the IRS in the last 5 years.
• Fails to complete all past federal tax returns for all past tax liability.
• If a self-employed South Dakota worker fails to file quarterly tax returns or make quarterly tax payments.

Partial Payment Installment Agreement

If a South Dakota taxpayer can not qualify for an OIC or if they can not make their full tax payments with an installment agreement, they may qualify for a partial payment installment agreement (PPIA). PPIA is similar to an installment agreement and will allow the taxpayer to make monthly installments, but a PPIA allows the South Dakota taxpayer to make partial payments. If the debt is not included in the PPIA it will be forgiven.

PPIA can be less expensive and less time consuming than an Offer in Compromise. PPIA will not stop penalties and interest from continuing to accumulate, but it will stop all IRS debt collection efforts. PPIA will always cost the taxpayer more money than repaying the IRS tax debt with a one time lump sum payment.  The IRS will review the PPIA every two years, and if the South Dakota taxpayer’s financial position has substantially improved, the IRS has the right to increase the PPIA payments or terminate the PPIA plan.

Currently Not Collectible

South Dakota taxpayers who absolutely can not pay their tax debt may have the debt declared “currently not collectible”. Under this status change the IRS will cease all collection actions. Penalties and interest will, however, continue to accumulate.

The IRS will send a written letter every year to the South Dakota taxpayer outlining the amount of IRS tax debt owed. This statement is not considered a tax bill. If the IRS fails to collect the tax debt within 10 years the statute of limitations will expire, and the IRS tax debt will be forgiven.

Penalty Abatement

The IRS may assess penalties against a South Dakota taxpayer if they do not file their tax return, fail to pay their IRS taxes, file a false refund or misrepresent their financial status. If the South Dakota taxpayer has a valid reason for their mistake and can prove a willingness to repay their tax debt, the IRS may be willing to lower or abate the tax penalties. Valid reasons for mistakes could include: a serious mental or physical health condition, a personal hardship which made it difficult to file a tax return, personal duress, a natural disaster or bad tax advice from a tax professional

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