Wednesday, July 22, 2020

IRS Payroll Tax Debt

Filing Prior Years IRS Tax Returns

IRS Tax Debt

Our tax resolution firms believe that it is in the best interest of the consumer to file all of their past due tax returns, regardless of ability to pay. The economic consequences of unfiled tax returns are severe there is a maximum 25% late filing penalty that can be applied to the tax. Combined with accruing interest, this late filing penalty can add up to almost 50% of the original liability in many cases. Our tax specialists will work with you to prepare and file all of your unfiled returns, even if you no longer have the original records from the filing years.

IRS Tax Debt

True Tax Returns Filed Over IRS Substitute Returns

Most people do not know that if you do not file a tax return the IRS will file it for you. When the IRS files the tax return for you they do not take into account any of your standard deductions such as mortgage interest, spouse, children etc.. When our clients see this huge tax bill most of them just freeze not knowing that there are options. If it your right as a citizen to file a true tax return over the substitute return the IRS did for you.Once the IRS receives your true returns they will void the ones they did for you. The IRS will zero out the debt and recalculate the debt and penalties and interest based on your true debt.

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Abatement of IRS Tax Penalties and Interest
Abatement of a tax liability means to reduce or change a tax, penalty, or interest. Most frequently, abatement refers to eliminating an assessed tax liability and adjustment references reducing or altering an assessed tax liability.

Penalties and interest average 30-40% of the overall tax debt so successful elimination of these is a high priority with your personal tax resolution plan. If there is a reasonable cause for abatement or adjustment, the IRS may be willing to review the penalties which created a tax liability.

    Our tax resolution firms pursue IRS tax abatement on penalties and interest for you, after all of your tax returns from all years have been filed and a monthly IRS payment has been established or renegotiated for you.

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IRS Tax Debt

When business owners are unable to meet their IRS payroll tax obligations, a trust fund tax liability is created. The IRS is aggressive in enforcement of trust fund taxes, and does not allow trust fund tax to be discharged in a bankruptcy, no matter how old the tax liability. This means that if you owe delinquent payroll tax, you must address the liability and let our tax experts find a solution for you.

The IRS reports that approximately 2 million businesses owe almost $50 billion in payroll tax. The IRS is increasing its enforcement actions, so the probability of facing a lien, levy or other action is increasing very significantly. To determine if you may have a trust fund tax liability there are two primary determinations:

IRS Tax Debt

1.) Whether you are responsible for collecting or paying withheld income and employment taxes. There are two main methods used to appeal IRS collection actions. The first is a CDP appeal and the second is a CAP appeal. A CDP Appeal must be filed within 30 days of a final notice of intent to levy. This allows a senior technical advisor within the IRS to review the case. This means it is being taken from the collection division of the IRS, who are far more aggressive concerning these matters. In most instances, you will receive much better results filing a CDP Appeal.

2.) Whether you "willfully failed" to collect or perform your obligations. Typically, the IRS has the right to take enforcement action against anyone who meets these determinant tests, even if they were not an officer or employee of the corporation which originally collected the payroll taxes.

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