Tag Archives: Tax Resolution

How To Request Your Own IRS Transcripts

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When negotiating a deal with the IRS it is extremely important to have all of the facts.  The IRS knows everything about you and your past filings, so shouldn’t you too?  In all matters that we handle with the IRS, we ALWAYS request the taxpayers, or business’ IRS transcripts.  While we have a special privilege and can access your transcripts more quickly than you may be able to, the IRS has laid out how taxpayers may request copies of their own transcripts: here.

You will be able to request copies of the following documents from the IRS:

  • Tax Return Transcript – shows most line items including your adjusted gross income (AGI) from your original tax return (Form 1040, 1040A or 1040EZ) as filed, along with any forms and schedules. It doesn’t show changes made after you filed your original return. This transcript usually meets the needs of lending institutions offering mortgages and student loans.
  • Tax Account Transcript – shows basic data such as return type, marital status, adjusted gross income, taxable income and all payment types. It also shows changes made after you filed your original return.
  • Record of Account Transcript – combines the tax return and tax account transcripts above into one complete transcript.
  • Wage and Income Transcript – shows data from information returns we receive such as Forms W-2, 1099, 1098 and Form 5498, IRA Contribution Information. Current tax year information may not be complete until July.
  • Verification of Non-filing Letter – provides proof that the IRS has no record of a filed Form 1040, 1040A or 1040EZ for the year you requested. It doesn’t indicate whether you were required to file a return for that year.

If you would like our office to conduct a Transcripts Analysis, please contact us today.

IRS to improve OIC according to reports

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The Internal Revenue Service has taken steps to improve the offer in compromise process for both taxpayers and the IRS, but it can still do more, according to a new report.

An OIC is an agreement between a taxpayer and the IRS that settles a tax liability for a payment of less than the full amount owed. The report, from the Treasury Inspector General for Tax Administration (TIGTA), acknowledged that the IRS has made progress in the offer in compromise process since a previous TIGTA report in 2012.

However, according to the National Taxpayer Advocate’s Annual Report to Congress in 2014, the processing of offers in compromise continues to be one of the most serious problems affecting taxpayers. In our firm’s experience the typical processing time between submission of the OIC and when an Examiner reviews the submission is averaging roughly nine (9) months.

In its new report, TIGTA found that IRS employees did not always complete the initial processing of offers in compromise on a timely basis, nor did they always contact taxpayers by the promised date, or send interim letters when the promised dates were not met. In addition, TIGTA found that 10 of the 92 rejected offer cases in its sample (that is, 11 percent) did not include any documentation that alternative resolutions were discussed with the taxpayer.

The OIC is a powerful tool that unfortunately does not apply to all cases that we handle. Advertisements on television and radio are simply sales tools to get you to call. Be weary of sales persons who promise you results without conducting a thorough review of your IRS transcripts and personal finances.

Contact McCauley Law Office, P.C. today to discuss whether you may qualify for an OIC.

Bill providing protection against IRS asset seizure advances

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A bipartisan bill that would require the IRS to provide evidence of illegal activity before seizing assets has passed the U.S. House of Representatives Ways and Means Committee. Hundreds of taxpayers who have had assets seized between October 2009 and October 2014, when IRS seizure and forfeiture activity in the absence of criminal evidence ceased, will be notified that they are eligible to seek refunds.

The intention of the seizure and forfeiture practice was to ensnare criminals who were making deposits of less than $10,000 at a time to escape bank reporting requirements. But the IRS did not have to prove criminal activity before seizing assets. This led to the IRS freezing bank accounts and taking the property of non-criminal small business owners whose only (non) crime was making habitual bank deposits of less than $10,000.

Beware of jointly owned property

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If you own a property with a spouse, an IRS lien affects both of you. Technically your spouse’s lien would only apply to their portion of ownership in the property, but in reality a lien on a property is a barrier to its sale. You personally may be free of the lien, but until your spouse is able to release themselves from the debt, it’s your problem, too.

The same is true for property ownership transferred in a will. If you bequeath the family home to your son and daughter, and one of them owes the IRS money that they’re not able to pay, the other will feel the consequences of the lien as well.

Not paying is better than not filing

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This year’s tax deadline has come and gone, and hopefully you’ve filed your taxes by now; or at least filed for an extension. If you’ve avoided filing this year out of an inability to pay, however, it’s worth knowing that not filing your tax return will cost you much more in the long run than failing to pay in full. Both failing to file and failing to pay will result in penalties, but you can significantly reduce your penalties by filing and then working with the IRS to come up with a solution for whatever balance you might owe.

The difference between the two penalties is stark:

  • Failure to file will trigger a penalty of 5 percent of your owed taxes each month up to a maximum of 25 percent of what you owe.
  • Failure to pay (in full) triggers a penalty of 1/2 of one percent of what you owe per month up to a maximum of 25 percent of the total owed taxes.