Offer In Compromise – What Does That Mean For Taxpayers

The typical individual often does not realize that the Internal Revenue Service will negotiate on a tax bill when the conditions are right. This process is called an OIC, or offer in compromise, and can be as simple as an application process, but merely filing the form is not always that simple. There are conditions that must be met before the application is approved. In addition, the information provided also gives the IRS more information to use in collecting the debt in the event the application is denied. It is not advisable to file the form unless there is a definite chance the application will be approved.

There is a $150 nonrefundable application fee associated the filing. Individuals whose income falls below the poverty level can be excluded. Of course, some of the information requested will be annual income, along with documented evidence of other assets. Examples of assets are home ownership and vehicle registration. If the individual is married and lives in a community property state, the income of the spouse may also be requested. Payments may be made over a five-year period in equal payments of 20%, but the first payment must be included with the application. The agreement normally will not allow the first payment to be made with the next tax filing without permission.

There is a clear disadvantage to filing an application that is declined. First, all of the information provided can be used by the IRS in pursuing elimination of the debt. There is also a possibility that the number of documents requested by the IRS can be expansive. This will allow the agency to build an excessive profile for the taxpayer in a seemingly unreasonable debt pursuit. It does little good for the federal government to pursue small tax bills when other tax evasion cases are being postponed.

Huge Changes To The Offer In Compromise Program

Always remember that the entire debt level can also be appealed by filing another form contesting the IRS tax calculation. It is important to remember that dealing with the IRS is always a legal matter and that the rights of the taxpayer still apply, even if the federal government attempts to pursue the case in governmental overreach. It is always a good idea to confer with a certified public accountant or an attorney when dealing with the IRS is inevitable.

Salt Lake City Tax Attorney Jim Gilland can help determine if you will qualify for an offer in compromise. If you are a good candidate for an OIC, Gilland law firm can guide you through the entire process from beginning to end. If however you will not qualify, there are many other options that can help end your IRS problems.

Beware Of Trust Fund Tax Liability

Federal employment taxes that employers withhold from wages they pay their employee are “trust fund taxes” because the employer withholds them in trust for the federal government.

For any failure to pay trust fund taxes there is a penalty assessable against not only the business employer but also its officers, employees, and even third-party financial institutions, payroll vendors, and their employees.

Moreover, certified public accountants and other accounting professionals should take note of federal district court judgments imposing joint and several liability against some of their colleagues serving as consultants for failure to pay employment withholding taxes due from their distressed clients.

United States Code Title 26 Section 6672 (26 US Code 6672), the trust fund penalty statute, authorizes such judgments of liability on findings of control over taxpayer finances. The statute reaches beyond owners and employees to outside consultants. The Internal Revenue Service (IRS) may assess 100 percent of taxes owed against the person(s) responsible for collecting and paying them.

Under 26 US Code 3102(a) and 3402(a), employers must withhold taxes from employee wages as statutory trust funds. Section 6672 imposes civil liability for unpaid funds on persons “required to collect, truthfully account for, and pay over” the taxes. Each appellate circuit has a test for liability for the trust fund; all require findings that a “responsible person” willfully failed to account for and pay the taxes. The IRS may collect from more than one responsible person although present IRS policy is to collect only once in each case.

The IRS construes “responsible person” broadly to mean anyone with “significant control” over the payment of funds from an employer’s finances. Exclusive control is not necessary. As an example, anyone with the last say or the final word about which creditors to pay has significant control.

A bankrupt accounting firm hired to perform all financial and accounting activities failed to remit withholding taxes for the client also in bankruptcy. The accounting firm argued that the client had instructed it not to pay other creditors before the IRS and so the failure was not willful, but the court found that the firm had control over client finances, determined which bills to pay, knew the taxes were unpaid, and had the power to pay them.

In another recent case, an accounting firm managed payroll and accounts payable, calculated employee withholding taxes, and made tax remittances. The firm had access to employee compensation information. It was the first to know what the client owed in withholding taxes and whether the taxes owed had been paid. After reporting to management that cash flow was not enough to pay both the withholding taxes and vendor accounts receivable, the accounting firm continued to issue payroll checks and pay vendors on management’s instructions.

The critical question was whether the accounting firm had the authority or ability to pay the taxes or significant if not exclusive authority over the decision whether to pay. The court found substantial control over payroll operations and willful failure to pay trust fund taxes in issuing checks to other creditors with knowledge that the taxes remained unpaid.

Potential liability for the trust fund penalty should make accountants cautious and constantly aware of attendant professional responsibility to collect and pay trust fund taxes when serving clients. If the client insists on paying creditors sooner and trust fund taxes later, accountants obligated by rules of their profession to maintain integrity and objectivity and not to subordinate professional judgment to others knowingly may have to withdraw from the engagement. As the question of personal responsibility for payment of trust fund is factually intensive, accountants should document relinquishment of control over client finances. Of course, withdrawal altogether from the accounting consultancy always relinquishes all control over client finances and estops any application of Section 6672.any

Even if erroneous, an IRS penalty assessment can cost the accountant substantial attorney fees only to achieve vindication with no right to recovery. Accountants should comply scrupulously with trust fund tax obligations. The IRS assiduously collects all trust fund taxes due to it from whomever it may assess

If you or your employer are getting into trouble with payroll taxes, contact Utah tax attorney Jim Gilland today. With offices in Clearfield, Salt Lake City and Saint George,  Gilland Law Firm has helped hundreds of troubled taxpayers bring their IRS problems down to size by negotiating a settlement that both parties can live with.

Get Legal Help For IRS Tax Problems

Many people struggle with tax problems. The IRS is a government agency that collects tax debt and people who fail to comply with a repayment schedule can land in a lot of legal trouble. One way to handle tax problems is to hire a tax resolution attorney.

Tax issues often arise because people are unfamiliar with the U.S. tax code. When people file their taxes they often make mistakes or end up owing money to the IRS. When a person owes a lot of money to the IRS, they can ask to be put on a payment plan. However, sometimes people cannot afford to pay their back owed taxes which can lead to the IRS sending them to collections.

If the IRS is pursuing collections actions then this can lead to wage garnishments and bank account liens. People who are in this situation often have no idea on what their rights are and how to handle the issue properly.

Typically tax resolution firms take a hands off approach to this type of legal matter. The representatives will just meet with a client once and request basic information. Then, they will use the information that is compiled to fill out forms and submit them to the IRS.

This is not an efficient way to handle tax problems. Legally, it is much better to go to court and not allow bureaucracy to continue by just continuously filing forms and hoping for some action to occur. People want to be offered help and have the problem handled as quickly and as professionally as possible.

A good tax resolution attorney can represent their clients in court. These attorneys specialize in dealing with tax debt so they can help people settle their issues with the IRS in a way that accommodates their needs and budget. It is never a good idea to hire a firm that does not have attorneys on hand to deal with court proceedings.

A tax resolution attorney will have the background and qualifications to work with their clients to figure out a game plan to use. For example, they will be able to review all of the relevant tax documents and discuss why there is so much debt and how the IRS works when trying to remedy the situation.

These attorneys have experience and will know how to reach out to the IRS and stop any further collections activity from being pursued. This is the best avenue for people to get out from under the mountain of debt that they have and be able to sleep easily again.

Tax Attorney Jim servers all of Utah for resolving IRS tax problems including, Ogden, Layton, Clearfield, Salt Lake City, Provo, Logain and Saint George. More at

IRS Tax Attorney – How a Lawyer Can Help You

Owing money to the IRS can be stressful, to say the least. Whether you have unpaid back taxes, have a bill that is too high for you to manage this year, or have been audited, it’s time to consult with an IRS tax attorney. It’s difficult to manage these types of situation on your own, because the IRS employs their own expert legal team to represent them. Those who try to communicate with the IRS may find themselves on hold for hours while they attempt to speak to someone who can help them. You can reduce this stress and ensure that your best financial interests are represented when you have an attorney to work with you, however.

When you have been presented with a steep bill that you have no way of paying, you may want to ignore it. This is the worst thing that you can possibly do, because your obligation is not going to go away. The less communicative you are with the IRS, the more that your penalties and interest will go up. The unpaid debt could eventually lead to wage garnishment, a lien being put on your property, or seizure of other assets. To avoid losing everything or going bankrupt, you will want to talk to an IRS tax attorney to resolve your problems as soon as possible.

Even in situations that seem hopeless, a good IRS tax attorney may be able to find a loophole or a way for you to settle your debt for less money than you thought you would have to pay. This is because tax lawyers have spent their careers studying tax law, and are up-to-date with all of the latest changes to this law. They may know of a new tax credit that you have overlooked or a change to the law that will otherwise affect your tax return. Lawyers also know how to communicate most effectively with IRS officials, particularly if you are being audited.

Pulling together all of your financial paperwork can be tedious, to say the least. An IRS tax attorney can help you with this process as well, so that you don’t overlook anything important and don’t waste any time in the process. Rather than attempting to save money by not hiring an attorney, you can actually save money in the long run when you have someone representing your best interests. They may be able to help you settle your debt with affordable monthly installment plans, or even an Offer in Compromise in some cases. It’s worth looking into all legal options.

IRS Levy – Collection Methods used by the IRS

If you’ve ignored a tax debt for a significant amount of time, the IRS will move on to more efficient enforcement methods. This includes the federal tax lien, as well as an IRS levy. Levies are imposed upon property or assets, meaning that the IRS can take seize your property, bank deposits, or wages. They don’t need to go to court in order to do this, as they have full right as part of their federal powers of tax collection enforcement. If you’ve been sent a levy notice, it’s important to get in touch with a lawyer right away to try and put a stop to the proceedings.

In some states, the IRS is unable to put a levy on the debtor’s primary residence. However, they can still attach a federal tax lien. To avoid the stress of dealing with liens or an IRS levy, communication is important. If they don’t hear from you or have any notice that you are planning to settle your debts, they will be more likely to pursue this type of extreme collection activity. You can avoid having a levy or lien put on your property when you use the services of a skilled Tax lawyer for Levies, who will be able to negotiate a settlement.

When you don’t make any arrangements to settle your debt at all, the IRS can seize and sell any personal or real property that you own. This could include physical property, such as your house, car, or boat, for example. It can also include property held by someone else. In addition to your bank accounts, it could include your rental income, stock dividends, or even the cash value of your life insurance policy. Clearly, this is a serious collection activity that you want to avoid.

An IRS levy will only be used after three requirements are met. The IRS will first send you an official demand for payment. If you refuse to pay this tax or don’t communicate, they will then send you another final notice at least 30 days before a hearing date. When you receive this final notice, it’s essential to contact your lawyer to figure out what to do to put a stop to the levy. It may be possible to negotiate with the IRS in advance of this, and avoid the stress of a levy. Otherwise, the levy will only be released when you pay your taxes or are able to dispute the tax bill.

Tax Attorney Jim Gilland, Esq. Featured on NBC as Guest on The Brian Tracy Show

Jim Gilland, IRS tax controversy expert, was recently seen on NBC, CBS, ABC  and FOX network affiliates around the country as an expert guest on The Brian Tracy Show.

Jim Gilland, of Gilland Law Firm PC, was recently an expert guest on The Brian Tracy Show.  Best-selling author Brian Tracy, one of the country’s leading business minds, hosts the show that was recently featured on NBC and other major network affiliates across the country.

“The Brian Tracy Show” features an interview format, with Brain Tracy interviewing business leaders and marketing experts from around the world. Jim Gilland was one of Mr. Tracy’s recent guests, discussing how he is helping those who are experiencing IRS tax problems.

Jim Gilland is a nationally recognized tax attorney whose practice is limited to IRS tax controversy matters. He has been quoted by radio personalities for constantly maintaining that “ALL IRS tax problems can be solved”.   His book, How to Solve Your IRS Problem! has been a lifesaver for many taxpayers throughout the United States.  He is also the co-author of the upcoming legal book, Protect and Defend: Proven Strategies from America’s Leading Attorneys to help you Protect and Defend Your Business, Family and Wealth.

Most IRS problems solved at Gilland Law Firm are accomplished through partial or full-pay installment agreements, Offer-in-Compromise, obtaining Currently Not Collectible Status, and audit reconsiderations.  Some are resolved partially or wholly through bankruptcy.  Additionally, strategy and timing are often critical issues to synergize a minimal tax result using one or more of these procedures in conjunction with others.  There are multiple other methods to eliminate or lower tax penalties and associated interest.

Brian Tracy is Chairman and CEO of Brian Tracy International, a company specializing in the training and development of individuals and organizations. Brian Tracy has consulted for more than 1,000 companies and addressed more than 5,000,000 people in 5,000 talks and seminars throughout the US, Canada and 56 other countries worldwide. As a Keynote speaker and seminar leader, he addresses more than 250,000 people each year.

Can Bankruptcy Fix My IRS Debt Problem?

Bankruptcy protection in some cases can help protect federal taxpayers from back unpaid tax debt. The rules to determin those who qualify and those who do not are very complicated. Many factors determine if bankruptcy will protect the taxpayer from past taxes due including the type of bankruptcy, how old the debt to the IRS is, a taxpayers past tax payment history, any previous bankruptcies, and many other factors.

Tax Attorney Jim Gilland can determine if bankruptcy can help you. Call Gilland Law and learn more.

Why should I work with a tax attorney over another tax professional?

A tax attorney knows how to navigate the complex and ever-changing rules and regulations of federal tax laws. Most federal taxpayers may be harming their financial interests by trying to negotiate with the IRS themselves and costing themselves thousands in owed taxes. IRS tax attorney Jim Gilland offers a free consultation for anyone who needs help with an IRS tax problem.

For quick answers to fedral income tax and other IRS tax problems view the IRS tax problem FAQs. The longer you wait  to resolve an IRS problem the worse it may get, don’t wait call tax attorney Jim Gilland for your free consultation now.

RS Tax Help: 801-444-9302

IRS Tax Lien – What Is It?

The IRS has the power to collect back taxes by levying on taxpayers’ property as a result of a tax lien. When a person owes back taxes, the IRS gains a federal tax lien on all that person’s assets after meeting certain statutory requirements. The IRS tax lien attaches to all rights, title and interest of the taxpayer. Once the IRS has a tax lien on all of a taxpayer’s assets, the IRS may enforce that tax lien by administratively levying his or her assets.

An IRS tax lien is filed by the government to protect its interests. Recorded with one or several county recorders, a tax lien basically tells the world that you owe back taxes to the IRS, and is generally devastating to the taxpayer’s credit. IRS tax lien makes it very difficult to obtain credit or to sell real estate.

The effect of the federal tax lien statute is that when any person fails to pay any assessment of tax, plus interest, penalties, or costs, a tax lien in favor of the IRS arises upon all property and rights to property, whether real or personal, tangible or intangible, belonging to the taxpayer. Even if the taxpayer makes partial payment, a tax lien will arise for the balance of the tax.

Offer in Compromise – Pros and Cons

The Offer In Compromise (OIC) can be an effective means of reducing the amount of tax liability (back tax debt and tax penalties) owed, however should your OIC be accepted by the IRS there are both positives and negatives the taxpayer should be aware of.

Offers In Compromise – Pros

The best qualities of the Offer In Compromise are as follows: they allow a taxpayer in some cases to settle their tax debt for less or sometimes even much less than the original amount owed. Many times an offer in compromise is the only avenue available to a troubled federal tax payer to bring any meaningful relief from a large debt. However an OIC will only be approved under specific circumstances and it s very highly recommended a taxpayer consult with an IRS Tax Lawyer to learn if the OIC is the best action the taxpayer should take in their IRS defense.

To Qualify for an Offer In Compromise a taxpayer must establish to the IRS the following:

  • The Taxpayer Has No Possible Means Of Paying The Amount Owed
  • The IRS has made a mistake and the taxpayer does not actually owe the amount the IRS has assessed.

The Pros on a successful Offer in Compromise include:

  • A way to end a lengthy and extremely stressful financial problem and get on with life
  • During the Offer In Compromise Negotiation process the IRS will actually suspend collections activity
  • The Offer In Compromise allows a taxpayer to stay out of bankruptcy and can even allow the taxpayer to discard taxes that would normally not be reducable
  • A reduced amount, sometimes even a significantly reduced amount is payed rather than the full amount of the original tax liability
  • If an Offer In Compromise has been accepted the IRS will lift any tax liens from the taxpayers property.

Offers In Compromise – Cons

In general the positives outweigh the negatives however should the IRS accept your OIC there are negatives you must be aware of including:

  • For an Offer In Compromise that is based on doubt as to collectability, the taxpayer must make a full finacial disclosure to the IRS – this can be an invasive, intimidating and unpleasant process if the taxpayer chooses to go it alone without a qualified tax attorney
  • Should you OIC be accepted some tax benefits will have to be waived
  • State taxes or other debts are not resolved by an Offer In Compromise with the IRS
  • A taxpayers OIC is kept in the public records for a year or more
  • Some tax credits and refunds will have to waived

For a period of five years from the Offer In Compromise the tax payer agrees to stay current with all of their tax responsibilities and obey all federal laws – failure to do so can negate the OIC and the taxpayer can be responsible for the original amount once again