| Don't count on luck to get you out of tax | | | | sometimes possible to get the penalties and |
| delinquency. | | | | interest removed. To do this, however, it is |
| Luck plays no part in obtaining tax relief. If you | | | | imperative that you know the pertinent laws and |
| think that you've been lucky because the IRS | | | | regulations. Don't expect the government to |
| hasn't found you in years; don't press your | | | | point out the angles that work in your favor. |
| "luck". When they do find you (and we all know | | | | Under the IRS Restructuring and Reform Act, IRS |
| they will) good luck is harder to come by than a | | | | agents may smile more, but their goal is still to |
| winning lottery ticket. Vast knowledge of federal | | | | collect money, not show you the friendly path to |
| guidance and criteria for the approval of tax relief | | | | reduced tax debt. It is easier to bring in these |
| programs is the best kind of "luck". The job of | | | | extenuating circumstances at the beginning of |
| an IRS agent is to extract every penny they | | | | your discussions with the IRS than after you've |
| think you owe, plus penalties and interest. They | | | | already settled on one deal and begun making the |
| are not shy to use their enormous power to | | | | initial payments. |
| seize your assets. The job of the Tax Relief | | | | Get current and stay current. |
| professional is to intercede with the IRS and | | | | Part of the deal under which taxpayers can |
| negotiate the best settlement the law allows. | | | | negotiate tax relief with the IRS includes staying |
| Don't wait for the IRS to approach you. | | | | in compliance with the IRS for five years. |
| By the time an IRS agent gets to you, most | | | | Compliance means:a) File all tax returns their |
| likely they have written you 25 -50 letters | | | | due dates with no exceptions. (I'm not talking |
| requesting the money or simply that you call | | | | extensions)b) Businesses and Independent |
| them. It will be hard to convince them of any | | | | Contractors need to pay and file quarterly with no |
| good intentions you may have at that point. | | | | exceptions.c) Employees need to lower the |
| Further, when your paycheck is garnished, bank | | | | number of exemptions so that no taxes are |
| account seized and home is set for auction, you | | | | owed at year end. |
| are not in much of a position to negotiate. | | | | The magic number is $1,000. Money owed under |
| Acting quickly and decisively to clear up your debt | | | | $1,000 is not subject to penalties. It may be |
| is the best move. Thinking the IRS will wait | | | | subject to some interest, but it is the penalties |
| indefinitely to collect is like believing that California | | | | that provide the bite in a tax collection. Taxes |
| won't have any more earthquakes because the | | | | owed over $1,000 are subject to penalties and |
| ground isn't shaking today. Contacting the IRS | | | | interest and can quickly become a real burden. |
| before they contact you will always work in your | | | | Business owners: Don't live off Uncle Sam's |
| favor in the subsequent negotiations. Dealing | | | | Money. |
| with your tax problems' before the IRS lands on | | | | Business owners who get into tax trouble with |
| you, proves that you are not willfully neglecting | | | | the IRS most often are those who don't make |
| your taxes and that you are showing "due | | | | their employee withholding payments on time. |
| diligence" in paying your debt. Those phrases | | | | Most often, they need the cash to pay other bills |
| make you look substantially better in the eyes of | | | | and incorrectly figure they can borrow from their |
| the IRS. | | | | tax savings account or payroll taxes and repay |
| Don't waive your collection time limitations if you | | | | the money before it is required to be turned over |
| enter into an installment agreements. | | | | with IRS via Form 941. When it comes to falling |
| If you can't pay your tax bill, be careful about | | | | behind on payroll taxes, IRS agents show no |
| entering into installment agreements that sound | | | | mercy. If you find it's impossible to meet all the |
| too easy. The IRS will often ask you to waive | | | | IRS requirements, hire a professional or payroll |
| the 10 year time period they have to collect. This | | | | service to force you to follow the rules. |
| is done on a form that sounds harmless enough | | | | Know you have the right to representation. |
| called a "Waiver of Tax" form. Its not taxes you | | | | Just like criminal are entitled to a lawyer when |
| are waiving but the statute of limitations...don't sign | | | | talking to law enforcement, taxpayers are entitled |
| it. In some cases, IRS agents agree to let | | | | to a tax professional when dealing with the IRS. |
| taxpayers make small monthly payments, if they | | | | Even in the middle of a negotiation, if the |
| are small and you can easily afford the payment | | | | taxpayer feels uncomfortable with the |
| take it. The problem is interest and penalties | | | | conversation, they have the right to stop the |
| usually accrue rapidly, so the debt is chipped away | | | | negotiation and inform the agent that they are |
| at a snail's pace, if at all. In the worst cases, | | | | going to hire a tax specialist. This is a good idea |
| your balance increases over time, because the | | | | in the first place the IRS knows you haven't |
| penalty and interest are greater than your | | | | memorized some 72,000 tax codes and |
| payment. | | | | regulations. We've always felt the most |
| Work out the best deal up front. | | | | powerful weapon in the IRS arsenal is ignorance |
| When extenuating circumstances such as job loss | | | | of tax laws. |
| or illness contribute to tax delinquency, it's | | | | |