Denver Offer in Compromise

Many people know that an offer in compromise is a tax settlement with the Internal Revenue Service.  But, why does the Internal Revenue Service and our government allow for such a tax settlement?  In many respects, you could compare an offer in compromise to a bankruptcy.  Of course, in a bankruptcy you are likely discharging or resolving multiple debts whereas an offer in compromise only resolves your tax debt with the IRS.  Just as an individual or business can file bankruptcy in an attempt to get a “fresh start” an individual or business may be able to settle their taxes with the IRS, and wipe out past debt and thus obtain a “fresh start” with the IRS.  Our government realized that in certain situations and circumstances, it is in the best interests of the government (and the taxpayer) to settle the debt.  Why should the IRS spend time and money attempting to collect a tax debt from a taxpayer that will never be able to settle or satisfy the tax debt?  In many respects, the time and effort of IRS revenue agents (and thus government money) is better spent working to collect the tax liabilities from those individuals and businesses that can pay the debt.  Thus, in some respects, I feel it comes down to a practical matter and the general policy followed by our government in recovering past due tax dollars.

The video below has been prepared by a tax attorney at The McGuire Law Firm to discuss what he considers as some of the policy matters behind an offer in compromise.

To speak with a tax attorney in Denver contact The McGuire Law Firm.  The McGuire Law Firm allows a free consultation so that you can discuss your tax matters, issues and/or problems with an attorney who can represent you before the Internal Revenue Service to resolve such issues.  Further, a tax attorney can help you with tax planning matters and other tax issues.  Contact The McGuire Law Firm today!

 

What is Stated on a Tax Lien?

What is stated or contained in a Notice of Federal Tax Lien?  What if there are errors stated in a Notice of Federal Tax Lien.  As a tax attorney, these are common questions that I am asked by clients, potential clients and other tax professionals, and rightfully so.  It is important to know and understand what information is stated in a tax lien, and of course, if the lien contained errors, you would want such errors corrected.  The article below has been drafted by a Denver tax attorney to provide information regarding the above tax lien questions and issues.  You can discuss your tax questions and issues with a tax attorney in Denver by contacting The McGuire Law Firm.

The content of a federal tax lien is prescribed by the Secretary of Treasury.  See IRC Section 6323(f)(3).  The Notice of Federal Tax Lien can be in paper form (the IRS uses Form 668Y) or a form transmitted electronically.  Regardless of the form of transmittal the IRS tax lien must contain certain information.  The tax lien must identify the taxpayer, the tax debt or liability giving rise to the lien and state the date of the tax assessment that is giving rise to the Notice of Federal Tax Lien.  Thus, the tax lien will properly identify the taxpayer, the amount of the lien and when the tax was assessed that allowed for the lien.  This all makes sense when you consider why a lien is filed, but what if there are errors in the tax lien?

An error on the tax lien will obviously create problems.  How can you properly and correctly evaluate the priority of a tax lien if it is incorrect?  How can you determine the validity of a tax lien if it is incorrect or the taxpayer is claiming the tax lien is incorrect?  A common error may be for the misspelling or statement of a taxpayer’s name.  Generally, if the name on the notice of federal tax lien is not identical to the correct name of the taxpayer, the tax lien is still valid if the Notice of Federal Tax Lien is sufficient to put a third party on notice of an outstanding lien against the taxpayer.  This test has referred to as the substantial compliance test.  See United States v. Sirico.  Many courts have upheld the Notice of Federal Tax Lien when there have been errors in the taxpayer’s name.  Thus, when searching public records for a tax lien there is a level of due diligence that is expected and the lien identifies the taxpayer when the tax lien is sufficient to put a third party on notice of a lien outstanding against the taxpayer.

If the Internal Revenue Service has filed a tax lien against you, or you have questions relating to a tax lien, speak with a Denver tax attorney at The McGuire Law Firm.  You can schedule a free consultation with a tax attorney in Denver and discuss your tax related questions and issues.

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Denver IRS Tax Lawyer

What is an IRS tax lawyer?  I have the term IRS tax lawyer and thought I would draft an article and prepare a video to provide what I feel could constitute an IRS tax lawyer.

First, an IRS tax lawyer could be a lawyer that works for the Internal Revenue Service.  This lawyer would likely represent the government in cases before the United States Tax Court.  These cases would likely involve tax controversies and issues regarding the additional assessment of tax to individuals and businesses.  The specific reasons for the additional assessments of tax could be because not all income was claimed, the IRS is disallowing certain expenses or credits and/or the IRS is disagreeing with how (or where) a specific item was claimed on the individuals or businesses tax return.

On the flip side, an IRS tax lawyer could be a lawyer that represents taxpayers before the Internal Revenue Service in the certain situations that are described above.  John McGuire is a tax lawyer in Denver at The McGuire Law Firm and represents clients before the IRS in matters relating to IRS tax debts, IRS tax audits and other IRS tax disputes. Please feel free to contact John to speak with him regarding any of your tax questions or issues.  In addition to his law degree, John has an advanced degree in taxation known as an LL.M. and enjoys applying his tax knowledge to his client’s issues before the Internal Revenue Service and business related matters.  A free consultation is offered to all potential clients.

Contact The McGuire Law Firm to schedule a free consultation with a Denver tax lawyer!  The McGuire Law Firm has offices in Denver and Golden Colorado for your convenience.

Denver Tax Help

What is tax help or IRS tax help?  As a tax attorney I hear the term quite often and thus, thought I would provide information as to what I feel can be considered tax help.  Please read the article and view the video below, and of course, you can contact our law firm to speak with a tax attorney regarding your specific circumstances.

In my opinion tax help would include or mean assisting an individual or a business with a tax problem or tax issue.  Below are examples of situations whereby a taxpayer may need help nd the help that could be provided.

1) If an individual or business owed taxes to the IRS, tax help would likely include helping the taxpayer resolve the tax debt through a formal agreement with the IRS such as an installment agreement of offer in compromise.

2) If an individual or business had missing tax returns (had not filed tax returns with the IRS for a number of year or tax periods) tax help could include assisting the taxpayer to file these returns.  Such assistance may come in the form of providing information and transcripts to the taxpayer and/or actually preparing the tax returns.

3) An individual or business may have been levied by the Internal Revenue Service, and under such circumstances, tax help could include working to release the IRS levy and/or helping the taxpayer establish a resolution so that the IRS would not issue bank levies or wage levies in the future.

4) A taxpayer being audited by the IRS could use help in resolving the tax audit with as little to no additional assessment of tax as possible.  Tax audits can be very scary and confusing to a taxpayer, and quite often a tax audit on one period, can turn into a tax audit on multiple periods meaning the taxpayer could be exposed to additional tax assessments on multiple periods.

5) Tax help could come in the form of working with a business or individual to make sure they understand their tax obligations and responsibilities based upon their circumstances.  For example, a business with employees will need to understand how to withhold payroll taxes and how & when to deposit these payroll taxes with the IRS.  Moreover, such taxpayer must understand the 941 tax return filing requirements.

Thus, taxpayers may need “tax help” in a number of ways and circumstances.  If you have questions relating to a tax issue or matter, you can speak with a tax attorney in Denver by contacting The McGuire Law Firm.

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IRS Form 12153

What is IRS Form 12153?  Form 12153 is used to request a Collection Due Process Hearing with the Internal Revenue Service.  If you owe taxes to the Internal Revenue Service, and the IRS issues a Final Notice of Intent to Levy, files a Notice of Federal Tax Lien or other circumstances exist, you may wish to request a Collection Due Process Hearing.  The article and video below have been prepared by a Denver tax attorney at The McGuire Law Firm and should be used for informational purposes only.  Please speak directly with a tax attorney or tax professional regarding your tax issues.

If the IRS has filed a Final Notice of Intent to Levy (Letter 1058) in regards to taxes you owe, you have the right to request a collection due process hearing.  Requesting this hearing is a right you have as a taxpayer and will act as a hold on enforcement if you make the request within 30 days of the issuance of the final notice of intent to levy.  If you do not request the hearing within 30 days, you can still have a hearing known as an equivalent hearing, but you are not guaranteed an automatic hold on enforcement as if you timely requested the collection due process hearing.  It is also important to note that the collection statute (the time the IRS has to legally enforce collection of the tax debt) does not run and is tolled once you file for the collection due process hearing and until the hearing is held a determination is made.

After you file for the hearing, you will eventually receive notice that the request has been received, and then you will receive a notice stating a hearing date with an IRS appeals officer.  An IRS appeals officer is supposed to be an impartial party and review the case in regards to whether the IRS has taken the correct steps and provided the taxpayer with due process, as well as consider collection alternatives such as an installment agreement or offer in compromise to resolve the tax debt.  Generally, the appeals hearing can be conducted via phone and you will forward certain information to the appeals officer prior to the hearing.  For example, if you owe 1040 individual income tax debts, and the hearing was set for October 15th, the appeals officer would likely request that you submit a Form 433A and a collection alternative proposal prior to the hearing and then such information and request would be discussed during the hearing.  Thus, you would submit Form 433A, along with the necessary attachments and a proposal such as an installment agreement, or you could submit the necessary documents for an offer in compromise.

A collection due process hearing is a valuable right you have as a taxpayer and can be used to your advantage when resolving a tax debt or other IRS tax problem.  Please contact The McGuire Law Firm to discuss your tax questions with an experienced Denver tax attorney.

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How Do I Settle My IRS Taxes?

Many individuals and businesses that owe taxes to the Internal Revenue Service will contact my office and ask, “how do I settle my IRS tax debt?”  While most people are aware that they can settle their tax debt with the IRS through an offer in compromise, they do not know what is needed to submit their offer in compromise to the IRS and the process with the IRS offer in compromise unit.  The article and video below have been prepared by a tax attorney in Denver at The McGuire Law Firm to provide information regarding a tax settlement with the Internal Revenue Service.  As always, this article and video below is for informational purposes, and it is recommended you contact your tax attorney or tax professional regarding a tax issue.

An offer in compromise is based more off of a taxpayer’s ability to pay as opposed the taxpayer’s total debt.  Thus, first and foremost, a taxpayer looking to submit an offer in compromise to the IRS must complete a financial statement.  An individual will complete Form 433A OIC and a business will complete Form 433B OIC.  An individual with an interest in closely held businesses should likely complete both Forms 433A OIC and 433B OIC.  These forms are financial statements that help calculate the taxpayer’s reasonable collection potential, which is determined by equity in assets and disposable income.  Of course, if a taxpayer does have special or extenuating circumstances, these issues can be presented to the IRS as a reason for the taxpayer to not pay their full collection potential.  Upon completing the necessary financial statements, the taxpayer should be able to calculate their offer amount.

Upon completing the offer amount, Form 656 should be completed, which states the taxpayer’s information, the tax debts of which the taxpayer is attempting to settle and the offer terms.  The offer terms will include the offer amount and over what time period the taxpayer will make such payments.  Further, the offer terms can dictate the payment that must be submitted with the offer and whether payments need to be made as the IRS is reviewing the offer.

The taxpayer will submit Form 656 and the necessary financial statements and attachments to the appropriate IRS Offer in Compromise Unit.  Currently, there are 2 units whereby a taxpayer would initially submit their offer in Holtsville, NY and Memphis, TN.  Upon submitting the offer, the taxpayer will receive verification of receipt.  Thereafter, likely in 4-8 months, the taxpayer will receive contact from the offer unit and an offer examiner.  More information or documents could be requested, or the offer could be accepted, rejected or returned.  If the offer is rejected, the taxpayer does have appeal rights and can appeal such rejection.  If you have questions related the settlement of an IRS tax debt, speak with a Denver tax attorney at The McGuire Law Firm through a free consultation.  Please enjoy the video below, and hopefully, you have found this information useful.

Call The McGuire Law Firm to schedule a free consultation with a tax attorney in Denver, Colorado or Golden, Colorado.

Denver IRS Tax Debt Relief

What constitutes IRS tax debt relief?  As a tax attorney, I think the following constitute IRS tax debt relief: formalizing an agreement to resolve an outstanding tax debt, resolving a tax audit in a manner favorable to a taxpayer or with no change to the taxpayer’s tax return and saving a taxpayer money through a successful penalty abatement with the IRS or tax settlement with the IRS.  In short, whenever a tax matter with the IRS is resolved and/or the taxpayer is able to be relieved of some of the tax debt they owe this should constitute IRS tax debt relief, right?  These issues are discussed in greater detail in the article and video below.  Please feel free to contact The McGuire Law Firm at anytime to speak with a tax attorney about your tax matters and questions.

What types of agreements are available to resolve a tax debt?  In addition to an installment agreement whereby you make monthly payments to the IRS, you may be a candidate for an offer in compromise, which can be considered a settlement with the IRS.  Yes, you pay the IRS an amount that is less than the total amount due for a resolution of your tax liability. Additionally, the IRS may agree to place your liabilities in a currently non-collectible status.  While in this status, the IRS will not actively enforce collection of the debt, and the collection statute will run.

If you are being audited by the IRS, relief may come in the form of the IRS issuing a no change letter meaning they agree with your return and are not going to issue a notice of deficiency, or the IRS agrees not to currently audit other periods.

In terms of lowering your tax bill and saving money, a potential for big relief comes in the form of the IRS agreeing to abate penalties.  If you can establish causation for the accrual of penalty and such causation is deemed reasonable cause for the abatement of penalties, the IRS can waive all or portions of the tax penalties that have been assessed.

If you are being audited by the IRS or owe taxes to the IRS please consider contacting The McGuire Law Firm to speak with a tax attorney.  A free consultation is offered to all potential clients and a tax attorney is likely to be able to help you resolve the matter.

 

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Denver IRS Wage Garnishment

So your employer received a notice from the IRS to garnish your wages.  That being said, what is an IRS wage garnishment?  The article and video below have been prepared by a tax attorney at The McGuire Law Firm to provide additional information regarding an IRS wage garnishment.

If you owe individual income taxes, or are responsible for the trust fund recovery penalty from a business, you as an individual owe taxes to the IRS and the IRS can collect from your personal assets.  Generally speaking a levy is a taking of property, and a wage garnishment is a form of levy, basically a levying of your wages.  So how were your wages levied?  Initially, you accrued a tax debt, would have received notices from the IRS and you have yet to establish a formal agreement with the IRS.  After the IRS provided you with due process (a series of notices and appeal rights) the IRS can levy bank accounts and wages.  The IRS will issue the wage garnishment to your employer and your employer is required by law to withhold monies that are not exempt from the wage garnishment and pay them over to the IRS until your employer receives a release of wage garnishment from the IRS.  Further, it is important to note that your employer is subject to liability of they do not properly abide by the wage garnishment that the IRS has issued.

How much if my income will be garnished?  The IRS provides a chart whereby a specific amount of wages are exempt from the wage levy.  The exempt amount is determined by your number of dependents.  After the exemption amount, all other income (wages) are to be paid to the IRS.

Will the IRS release my wage garnishment?

Yes, the IRS will release your wage garnishment under certain circumstances.  If a formal agreement is established, the IRS will release the wage garnishment.  If the wage garnishment is creating an economic hardship, the IRS will release the wage garnishment.  Of course, if the liability is satisfied, the IRS will release the wage garnishment.

How long does the IRS wage garnishment last?

The bad news in regards to a wage garnishment is that unlike a bank levy, which is generally a one-time levy, a wage garnishment is typically continuous meaning that your wages will continue to be subject to the garnishment.  A wage garnishment is not a one-time levy- your wages are levied each and every pay period until the garnishment is released!

If your wages have been garnished by the Internal Revenue Service, you need to deal with and resolve your tax debt.  You can speak with a tax attorney at The McGuire Law Firm regarding your tax matters and a tax attorney can outline a resolution plan and your resolution options based upon your circumstances.  Do not wait until your wages are garnished or your bank account is levied!

Where is a IRS Tax Lien Filed?

Where is a tax lien filed?  The place of filing of a lien is important for multiple reasons and will be discussed in the article below.  Please understand the information provided below and within this email is for informational purposes.  You should always contact a tax attorney or tax professional to discuss current law and/or your specific facts and circumstances.

Internal Revenue Code Section 6323(f) and state law will determine the correct place for the filing for a Notice of Federal Tax Lien.  A tax lien may not have priority over a later purchaser, security interest holder, judgment lien creditor or a mechanic’s lien if the Internal Revenue Service files the Notice of Federal Tax Lien in the wrong place.  The Internal Revenue Code allows for a state to designate one office for the filing of a federal tax lien for real and personal property, but different rules may apply for real property and personal property (tangible or intangible property).  When filing a lien for real property, the tax lien is filed in one office that is designated by the state where the real property is physically located.  Generally this site for filing would be the county recorder or clerk of the county (sometimes referred to as the county clerk and recorder) in the county where the real property is located.  In terms of personal property the place for filing of both tangible and intangible property is the residence of the taxpayer at the time the tax lien is filed.  Most states would generally provide that the office for filing the tax lien regarding an individual’s personal property would be the county clerk’s office in the county where the taxpayer lives or resides.

So given the above, where would the IRS file a tax lien in regards to a business such as a corporation or partnership?  The residence of a corporation or a partnership is considered to be the place whereby the principal office is located, which would be the office where the major business decisions or executive decisions are made.  See S. D’Antoni, Inc. v. Great Atlantic & Pacific Tea Co., Inc., 496 F.2d 1378 (5th Cir 1974).

What if a taxpayer lives in Cambodia or elsewhere abroad?  If a taxpayer lives outside of the United States, for purposes of the filing of a Notice of Federal Tax Lien, the taxpayer is considered to live in Washington, DC.  Therefore, the tax lien would be filed against the taxpayer’s personal property with the Recorder of Deeds for the District of Columbia.

If no office is designated by a state for the filing of the tax lien, the Internal Revenue Code would provide that the lien should be filed in the office of the clerk of the United States District Court for the judicial district in which the property that the tax lien would attach to is situated.  Generally, there have not been many states where the tax lien is file in district court.

Contact a Denver tax attorney at The McGuire Law Firm if you have questions relating to a tax matter, IRS tax lien or any other tax question.  A tax attorney can assist you with tax matters from tax problems to tax planning and analysis.

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Transferring Property Subject to a Federal Tax Lien

What happens if I sell property and have an IRS tax lien?  Can I transfer property if the IRS has filed a tax lien against me?  These are common questions that individuals or businesses who have had a tax lien filed against them may ask a tax attorney.  John McGuire is a tax attorney in Denver, Colorado at The McGuire Law Firm and has drafted the article below to provide some information regarding the above topics.  Please remember that all information on The McGuire Law Firm website is for informational purposes and should not be relied upon, and does not create an attorney client relationship.  Furthermore, when cases are referenced in an article, it is important to know that case law may change, and again, should not be relied upon as current law.

When the IRS files a tax lien against a taxpayer this tax lien will attach to the property of the taxpayer and remain attached to the taxpayer’s property until the lien is either released, expires or the property is discharged from the tax lien.  It is possible to have property discharged from a tax lien whereby the lien remains, but the IRS no longer considers the lien to attach to the property.  This occurs through the acceptance by the Internal Revenue Service of a request for certificate of discharge of a federal tax lien, and will be discussed in other articles.  Once, the lien has attached to property, the transfer of such property that is subject to the federal tax lien does not impact the IRS’ tax lien.  See U.S. v. Bess, 357 U.S. 51, 57 (1958).  If the taxpayer sells property with a tax lien attached, the lien will attach to whatever the taxpayer receives through the transfer.  For example, if a taxpayer owns a corvette and a tax lien has been filed, and thereafter the taxpayer exchanges the corvette for an RV, the lien would attach to the RV.  Thus, the lien will attach to whatever the initial property is substituted or exchanged for because the tax lien can attach to all of the taxpayer’s property and rights to property.  See Phelps v. U.S. 421 U.S. 330, 334-35 (1971)  whereby a tax lien can even attach to cash received through a sale of property.  Of course, it would likely be pretty hard for the Internal Revenue Service to enforce a federal tax lien on cash.

If property that is encumbered by a federal tax lien is transferred to a third party and thereafter the third party exchanges or transfers such property for other property (substitute property) in a manner that the lien would not attach to the initial property (or property transferred) the lien will now attach to the substituted property.  See, Municipal Trust and Savings Bank v. U.S., F.3d 99 (7th Cir. 1997).

The transfer of property subject to a federal tax lien can create many issues including substituted property that the IRS then has a lien on as well.  Speak with a Denver tax attorney at The McGuire Law Firm if you have questions relating to a tax lien.