Resolving a tax matter requires more than adequate legal representation. You may not realize how much you are in control — even when you have a tax attorney representing you.
While the IRS will always be slow to respond, gathering information and providing it in a timely manner to your attorney will aid in completing work on time, and help expedite resolution. Revenue officers are happier when working with taxpayers who they can resolve easily with little headache.
I want to tell you about one case (names and some details changed) we just successfully closed out.
"Johnny Vegas" was a salesman for an aquatic life company located in Las Vegas, Nevada. He was 30 years old, single, and fortunate enough to make more income than expected in 2011. This unexpected increase left him with a tax bill he could not pay. Penalties and interest quickly accrued, and the bill grew to $190,000.
Now here's the thing. Many times the clients we speak with have been delaying resolving their IRS issues for years and years, and I'm just saying… it is better when they don't.
At the end of a long, hard work day, it is easy to lack the motivation to gather financial information and respond to correspondence from your Tax Attorney. Here is the secret to this success story: Johnny always provided responses to our questions or document request in a timely fashion.
Sometimes he even returned the request information within a 24-hour period when the information was not due for two weeks. Receiving this information so quickly allowed our team to thoroughly analyze his finances and develop an argument to approach the IRS with a resolution proposal. The extra time allowed us to request additional documents for further consideration before the deadline to provide the Financial Information Statement to the IRS.
When an IRS agent receives the information completed the first time it is requested, they are always more willing to work with our attorneys to come to a resolution that the tax payer can afford. In this case we began working with Johnny seven months before he agreed to a resolution.
His specific type of resolution was a partial pay installment arrangement where he only had to pay back $700 a month, as opposed to the over $3000 he would have had to pay under a 6-year installment agreement. I know what you're thinking, but don't worry. In Johnny's case, because of the statute of limitations the IRS has to collect on the debt, it will be wiped out in 7 years. That means the debt will expire if Johnny's situation doesn't improve and he can't pay it off in full.
The case was opened and closed in 7 months, which when dealing with the IRS, is considered fast. This is how quickly cases can move — but not always.
Once the agreement was in place we contacted the IRS to discuss Johnny's case and see if he qualified for a First Time Penalty Abatement. The agent we spoke with reviewed his compliance during resolution, and was more than happy to abate all penalties associated with his first year of noncompliance with the IRS. They abated over $7,700.00 of his liability. Which is good, because if Johnny starts making money like he used to, the IRS may look for him to repay whatever debt is left.
If you have a tax issue you're concerned about, contact us. We can help. Call us at 888-727-8796 or email email@example.com.