Offer in Compromise
Offer In Compromise is a mutually beneficial agreement between the taxpayer and government to reduce your tax obligation. Shown there is no ability to collect the tax in full, these tax agencies agree to settle your debt for “cents on the dollar.” Tax Solutions Group averages a 94% reduction. Once the Offer amount is paid in full, any tax lien recorded is released, helping to restore your credit.
The IRS or State requires that you remain current in your tax filings and payments for the next 5 years as a condition of the acceptance, which Tax Solutions Group works with you to maintain (we don’t like to see our hard work go to waste). WIN-WIN.
Realize the Offer-In-Compromise program not a “right” but a request. Taxpayers’s hardship must be backed up with current income and expense analysis. Receipts must show current payments for living and/or business expenses. In addition, the OIC must be submitted with 100% accuracy to assure the offer is accepted. Done correctly, the Offer In Compromise program has allowed tens of thousands to obtain a “clean slate” and get a fresh start.
Un-filed Tax Returns
Taxpayers who do not file their income tax returns eventually are assessed an estimated tax by the IRS and State. The IRS takes the gross income reported by your income sources and then estimates your tax based solely wupon the reported income and withholdings. You are not credited for any dependents you may have, and do not apply write- offs for you, even mortgage interest.
The state also assesses you in this manner, and if you possess a business license also apply an assessment based on your occupation.
Because the State is in direct competition with the IRS in collecting tax liabilities, they usually assess you first, and then promptly enforce collection action. If this has happened, expect the IRS to follow suit shortly.
The tax assessments is almost always higher than what your tax would be if you filed your return, and in many cases much higher. Additionally, penalties and interest are assessed based on a certain percentage of your tax. This can be devastating and eventually lead to levies against your income and bank accounts.
Tax Solutions Group are experts in delaying collection action. Depending on your individual situation, our tax professionals decide on the best course of action to stop IRS and State collections.Scroll down to see an example where we were able to help reduce one of our client's tax liability from $412,818 to only $1,828!
In the event you have non-filed income tax returns, the IRS and State not only create exorbitant tax assessments, but they also assess penalties and interest based on the applicable percentage of tax.
There is no better way to reduce penalties and interest than by filing your outstanding returns. Tax Solutions has the expertise to reduce - or completely eliminate the tax - and also penalties and interest.
If your returns have been filed and the penalties and interest are based on the correct amount of tax, penalty abatement (removal) can be achieved if the tax liability was incurred due to: an act of God, fire, theft, death, major illness, or embezzlement of your business income with conviction in a court of law. Simple lack of income does not qualify you for penalty abatement.
Be aware that not everyone qualifies for penalty abatement. Give Tax Solutions Group a call today – they can tell you if you are able to benefit from this program.
Wage and other income garnishments can have a devastating effect on income.
IRS wage garnishments can attach 75% to 100% of your net wages. State wage garnishments can attach 25% of your income. Additionally, because your employer is made aware of your tax issues, it is extremely embarrassing.
If your income is 1099-based, an IRS levy attaches 100% of your income. 100%! A state levy attaches 25%. This can have even worse long-term effects than wage garnishments - not only is your cash flow halted, but business relationships are severely compromised and many businesses would fear that the IRS will start contacting them. You could be forced to shut down your business.
You can’t hide - The IRS can access your income sources through W-2s and 1099s and the State can access your wage information almost immediately through quarterly reports filed by your employer with the Employment Development Department. In either manner, the IRS and State can find out who you work for without your input and simply mail levies to your income sources.
Bank levies can be equally devastating. The IRS and State can issue levies to your bank, and whatever you have in your account when the levy reaches your bank is attached. If you are an employer, you may end up not meeting payroll.Tax Solutions Group can help.
They step in and ensure that levies are not issued while your case is researched. In almost all cases, if the state has issued a wage levy, Tax Solutions Group can get a 30-day delay enabling you to receive your full paycheck. Once returns and/or financials are put together, wage levy releases are negotiated with the IRS and State.
State Tax FTB
Franchise Tax Board
The State taxing agencies are in direct competition with the IRS for your tax dollars. They usually assess an income tax before the IRS. By State Law, they rely on many creative ways to determine your income. If you possess a business, professional or contractor’s license, the State uses an average “gross” income based upon your profession. They do NOT include any business expenses. Also, if youtrade stocks and bonds, stock sales are totaled up and your gross income derived by the total sales price. Again, the State does NOT assume a purchase price paid for the stock. You may sell $100,000 of stock and lose money but the State never assumes this and tax you based upon $100,000 profit.
EDD –Employment Development Department
The State employment tax arm is the EDD. Again, if you do not file quarterly payroll reports, the EDD assumes employees exist (even if they don’t) and assess you a tax. The EDD accepts payments and even an Offer In Compromise if you qualify.
SBE – State Board of Equilization
The State Sales tax arm is the SBE. The SBE is normally the toughest agency as money was collected from customers in the name of sales tax, yet is was not paid. Payment plans are available but in very short duration. State tax problems are just as serious as Federal tax problems and can put you and your business in a huge hole. Tax Solutions Group can dig you out.
A payment plan can be obtained if the tax liability from your filed returns is accurate. To secure a payment plan, a financial statement is prepared along with documentation that backs up the income and expenses claimed. Payment plans can be set up with the IRS and/or State based upon your ability to pay, not simply what they demand.
It is imperative that the financial statement be prepared professionally. If not, you run the risk of over-reporting your income or under-reporting your expenses, resulting in a payment plan that you can not afford. If you do not prepare the financial statement accurately or do not submit the proper substantiation, you could experience delays that could lead to the IRS and State issuing levies to your employer, income sources, and bank.
If you qualify, we can arrange to have your tax liability be deemed “temporarily non-collectible,” which remains at least through the filing date of the following year. All collection action ceases as long as you remain in compliance with your future filing and taxpaying requirements. Tax Solutions Group works to keep you in “non- collectible” status so that a reasonable and affordable payment plan can be negotiated.