FAQs

1. What are Delinquent Taxes?

The law requires taxpayers to file their income tax return every year. Delinquent taxes are those that a taxpayer has not paid and/or not filed by the due date. If you don’t pay your delinquent taxes, the balance will keep growing with penalties & interest. The IRS may impose various civil and criminal penalties if taxpayers fail to file returns. Our team of attorneys can assist you to fix all types of IRS tax debt issues. Not only can we help getting your returns filed, but we can then help you resolve the debt owed on those returns.

2. What are my options if I can’t pay all of the delinquent taxes?

Taxpayers are protected by the Taxpayer Bill of Rights. We can evaluate your financial circumstances and help you understand which route towards a possible solution best suits your needs if you can’t pay all of your taxes. The IRS may consider you for an ‘Offer in Compromise,’ an ‘Installment Payment Agreement,’ ‘Uncollectible Status,’ or even a ‘Tax Bankruptcy.’

3. How do I qualify for tax relief?

Taxpayers with back taxes owed might be eligible for tax relief. If you are seeking tax relief, there are certain procedures that must be followed. There is short-term tax relief for such events as wage garnishments, bank levies or tax liens. More permanent tax relief may also be available such as tax settlements, installment agreements, and penalty removal. Having an experienced tax attorney guide you through these processes can be invaluable.

4. How can you help me with IRS Tax Investigation?

Though you may be able to access your tax records by requesting them from the IRS, requesting those records on your own can often trigger red flags. Our team of attorneys along with our support staff can conduct an IRS tax investigation by requesting your tax records in such a way as to minimize the likelihood of raising any red flags and determine exactly where you stand with the IRS, risks you are currently facing and how best to resolve those issues.

5. Does the IRS impose interest or penalties for late filing or payment?

Yes. If you fail to file and pay your taxes on time, the IRS charges you interest on any unpaid balance and the interest rate varies and may be adjusted quarterly. You may also be subject to penalties, including the failure-to-file and failure-to-pay penalties. Each of these penalties are calculated a bit differently. Although both are capped at a maximum of 25% of your unpaid tax. The Failure-to-File penalty is 5% of your unpaid tax for each month the return is late. The Failure-to-pay penalty is 0.5% of the unpaid tax for each month the tax remains unpaid. The IRS will assess penalties for partial months.

6. How can a tax lien affect me?

A Federal Tax Lien is the way the government secures itself against your equity in assets for taxes owed. A Tax Lien may prevent or delay the sale of an asset and will likely cause any interest you are entitled to from the sale to be paid towards your IRS debt. This can create substantial turmoil when trying to sell a home when a federal tax lien has been filed. At the Law Offices of Nick Nemeth, PLLC, we help our clients comprehend the complex process involved with lien discharges and lien subordinations. Our team of attorneys has extensive experience with respect to identifying taxpayers who qualify for the ‘IRS Fresh Start Program,’ and provide them the most strategic solution to their tax lien issues. This IRS tax lien assistance offers lien withdrawal or prevention for those who qualify.

7. Can you help solve payroll tax problems?

If your business has unpaid employment taxes, the IRS may collect them from your business assets or receivables. In the case that your business fails to pay payroll taxes, the IRS may also holds the owner of the company personally responsible by assessing the ‘Trust Fund Recovery Penalty’ against the individual. To address payroll tax problems that companies face, ‘Offers in Compromise’ and ‘Installment Agreements’ are among the possible solutions that can effectively be used. The attorneys at The Law Offices of Nick Nemeth carry out a thorough analysis and will explain all options available to solve your current payroll tax problems.

8. What is the Offer-in-Compromise Program?

The Offer in Compromise (OIC) Program, commonly referred to as the ‘IRS Fresh Start Program,’ allows the taxpayer to settle a tax debt for an amount that is less than the amount owed. In 2012, the IRS expanded its offer-in-compromise program under its Fresh Start Initiative, thereby allowing more taxpayers to qualify. If you meet the criteria and your OIC is accepted by the IRS, you are generally able to resolve your debt for a fraction of what was owed.

9. Can I roll my IRS debt into bankruptcy?

There are several different types of Bankruptcy, 2 of which are the most commonly used. The first one is Chapter 7 wherein a Bankruptcy Court may allow you to discharge your unsecured debt. You may also be able to discharge Federal Income Tax you owe in a Chapter 7 Bankruptcy if certain criteria are met. The other commonly used type of Bankruptcy is a Chapter 13, or repayment type of Bankruptcy, in which the IRS debt is repaid through the bankruptcy repayment plan.

10. Do I need to be an attorney to represent myself before the IRS?

No, you don’t need to be an Attorney to represent yourself before the IRS. To represent another taxpayer, you must be an Attorney, Certified Public Accountant (CPA) or an Enrolled Agent with the IRS.

11. Which of my assets can the IRS seize?

Bank levies and wage garnishments are two common collection enforcement tactics used by the IRS. The IRS can generally seize any assets that you have access to. This includes, but is not limited to, wages, bank accounts, retirement plans & real property, including the taxpayers’ homestead. Taxpayers can protect themselves by ensuring correct handling of their IRS case. One of The Law Offices of Nick Nemeth primary goals for any new client is to decrease the likelihood of any possible collection activity.

12. How can I qualify for Innocent Spouse Tax Relief?

A successful request for innocent spouse relief will generally require you to prove to the IRS that you had no actual knowledge or no reason to know about an understatement of income or underpayment of tax liability. If granted, Innocent Spouse Tax Relief will remove the liability from the spouse who was unaware or unable to find out about the tax liability. A few of the reasons that may be considered as justification for requesting Innocent Spouse Relief are a signature forged by the other spouse, denial of access to financial records or fear of asking for information due to spousal abuse. In most cases, there is a two-year limit to file a Request for Innocent Spouse Tax Relief.

13. How long after receiving a notice of a bank levy, do I have before funds are removed from my account(s)?

Absent certain circumstances, the IRS must provide taxpayers with a 30 day notice of any form of a levy. You have a right to request a hearing before any levies commence within this 30 day time frame. Past this 30 day time frame, the IRS can send a notice to levy your bank, and within 21 days of receiving the notice, the bank will transfer your funds to the IRS.

14. Will I be able to pay my bills if my bank has received a notice of levy?

A bank levy is not continuous. Once the bank receives the levy notice from the IRS, the bank is obligated to freeze all your funds in your accounts at the time the levy is received up to the amount owed. However, if you were to deposit additional funds into your account after the levy was received by the bank, those funds will not be part of the bank levy, unless the IRS issues another levy notice. If you are unable to pay your bills, you have 21 days to come to a resolution with the IRS. If you can claim “economic hardship” the IRS may release the funds, however it is a rigorous standard.

15. How can I get my funds back once they have been levied?

Once the funds have been sent by the bank to the IRS, it can be extremely hard to get the funds back unless you do not owe the tax debt. That is why it is important to contact a Tax Attorney as soon as you receive a notice of a levy or, ideally, well before the levy occurs.

16. What kind of levies can the IRS issue me?

The IRS is able to issue levies on just about anything that you own or any source that provides income in order to satisfy your tax debt. This can include, but is not limited to, wages, pension accounts, bank accounts, social security payments, accounts receivable, insurance proceeds, and 401K accounts.

17. If I get married, will my new spouse take liability of my tax debt?

If your soon-to-be spouse has tax debt we recommend considering a prenuptial agreement. If you do get married or have gotten married without a prenuptial agreement, the IRS will not transfer the taxability to the non-liable spouse. However, the non-liable spouse’s income, and refunds can be subject to levy, especially in a community property state. If you are the non-liable spouse and file a joint return, you can request “Injured spouse relief” to get your share of the refund if it was been applied to your spouse’s old debt.

18. What is the difference between a lien and a levy?

Liens and levies are not the same thing. A federal tax lien is a public notice filed at a county courthouse stating that the government has an interest on all your property. A levy is when the government tries to take something such as a wage or bank garnishment or seizure of some other type of asset.

19. I am currently in a payment plan for my debts on a prior tax year, am I eligible to receive a refund for the current tax year?

No. As one of the conditions of your installment agreement, the IRS can take your refunds and automatically apply them towards any taxes you owe.

20. The IRS says I have a tax debt, what is the first step?

Getting any form of correspondence from the IRS can be terrifying, but you must remain calm. The first step should always be to contact and retain an experienced tax attorney. The Law Offices of Nick Nemeth, PLLC offers a free, confidential and no obligation consultation for any IRS problems you may have. During this consultation, Attorney Nick Nemeth will provide a step by step plan on getting to a solution for your IRS tax debt situation. If you need more information on tax-related matters or need to resolve any IRS debt problems, please contact us. You can fill out our Free Case Evaluation form or feel free to call us at (972) 635-4098 for a free consultation.

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