Taxpayers who want meaningful and permanent tax relief should understand that the Internal Revenue Code is an ever changing document, and that keeping up with the changes and knowing the current tax code is critical to staying on top of tax filing, and dealing with back tax issues. For example, the IRS just came out with a Revenue Procedure, which gives guidance on a pilot program the IRS had been using in select cities.

The program specifically addressed aspects of the Offer in Compromise program, and issues regarding Trust Fund Penalties for Business owners. The success in the pilot program made the IRS realize that using it nationally made sense. This means that additional Tax Relief is now available for those two issues, in certain situations, not just in the test cities, but nationally.

These are the types of changes that happen in the Internal Revenue Code quite often, that Federal Tax Resolution uses to its advantage in providing the best alternatives to our clients for their individual tax problem. We should be thought of as tailor’s, designing a tax relief program to the specific needs of our clients, because that is what we do!


Multiple types of services exist for dealing with back tax debts. The key is determining the best option. The only way that can be done is by a though analysis of a taxpayer’s financials. Anyone who tries to do it over the phone is taking a shortcut, trying to make a sale.

If you are dealing with a Wage or Bank Levy, IRS or State Wage Garnishment, and need help dealing with the garnishment or levy, then want to determine your options for dealing with your tax debt, we can help. Many cases that we work on take eight to 12 months to complete, as tax returns need to be filed, and some of the options for obtaining a reduction in tax debt, for those who qualify, can take 5-8 months alone. We can guide you through the entire process, making your life less stressful. We know the Internal Revenue Code, IRS Precedent, and will use it to obtain the best results for our clients.

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Some of the problems that taxpayers deal with include having a tax lien on their home. We have spoken to so many taxpayers, since the great recession, who have lost all equity or are underwater on their home. They all want the same advice, what do we do ?  The only way to deal with a tax debt, when you also have a tax lien on your home, is to know every option for dealing with your situation. Until you know all of your options, you will not solve your problem.

Many business owners have 941 payroll tax problems. 940 and 941 tax issues are more complex as the tax code is more severe, given that the IRS views money not forwarded to it as stealing. The IRS may use the Trust Fund Penalty in these situations, which can force many business owners out of business. Having a seasoned tax professional, with experience in this area of taxation is critical, so a wrong signal is not sent to the IRS, potentially causing them to close the business. Federal Tax Resolution has successfully worked on countless business payroll and trust fund cases.

Taxpayers who have a tax lien face problems obtaining credit. The lien is used to stop the sale of property, as it attaches to the Social Security number of the taxpayer. Under certain circumstances the IRS will release a lien. But it is always best to know your options with the IRS prior to making a knee jerk decision, simply to obtain the release of a tax lien. For example, if you can obtain a lower tax liability, but it would take longer, would the delay and waiting to release the lien, be worth the savings of the lower tax bill ?  Its always best to know your options.

IRS Penalties

IRS Penalties come in many forms. Trust fund penalties for 941, payroll taxes. The failure to file penalty is 5% per month, to a maximum of 5 months, or 25% of the principal amount of the tax owed. The failure to pay penalty is one half of one percent penalty for each month you fail to pay. This penalty can be as much as 25% of your unpaid taxes. The 60 day late penalty for filing after the due date, or the extension date, the minimum penalty is 100% of the unpaid tax or $136, whichever is smaller. The IRS underpayment penalty is .5% per month.

Filing Back Taxes

Having back taxes to file is a large piece of obtaining permanent tax relief. If you want to pursue any option for dealing tax debts, or after filing, know you will owe, you have to be in compliance, all of your back tax returns must be up to date. We can obtain all of your back tax records without raising red flags at the IRS. We do this by calling the Tax Practitioner Unit of the IRS. Once your tax returns are ready, they should be filed at the same time. Most tax professionals who do not work with tax debts, but concentrate on tax return preparation do not understand this. This is crucial to dealing with the Collection Division of the IRS. Its these little ins and outs of dealing with the IRS that make a difference in the outcome, and to whether you will have to deal with a 2000 pound gorilla called the IRS, or have a tax professional who knows how to tame the beast.

The Collection Expiration Date

One of the methods taxpayers ask us for obtaining tax relief, is through the Collection Expiration Date, or CSED, or 10 year statute of limitations. It is best o think of it as a clock that does not run for a straight 10 years, but has “events” that stop and start the clock. The clock must run for a total of 10 years. I know of one case that took nearly 17 years for the 10 year period to run its course. The IRS is not in the practice of allowing the 10 year period to go by. They usually have you come into their office, and pressure you into signing the waiver of the 10 year period, giving them additional time to collect. Or they simply garnish your paycheck, or bank account.

Filing Taxes The Right Way

Filing taxes properly is a way to lower what you owe, and can be a form of tax relief. The first step in that process is making sure you file under the correct status. Taxpayers who file separately usually pay more in tax. They often do this, because one taxpayer has a debt, and they don’t want their spouse involved. What they don’t realize is that over a few years, they can pay back thousand more than what they owed to begin with.

Filing separately means a lower itemized deductions and exemption. The first time homebuyer tax credit will be cut in half. The standard deduction will be cut in half. A reduced child credit. The earned income credit will be eliminated. The dependent care expense credit is also eliminated. Its better to purse your options with a skilled tax professional at Federal Tax Resolution!

Collection Standards

All options for dealing with past tax debts must at some point address the IRS Collection Standards. These are maximum amounts the IRS allows for expenses in certain categories, housing, transportation, etc. Knowing these is crucial to success. What happens if you go over those amounts ?  Can those amounts be changed ?  Do they apply to all options of getting a reduction in taxes ?  These are questions that have multiple variables, that will all need to be addressed, prior to the submission of any tax reduction work to the IRS. Unless that is done, the odds of success of not good.

Innocent Spouse

Innocent Spouse is used for certain situations and the IRS changed those requirements awhile back. The original Innocent Spouse is generally for the understatement of tax. Relief by separation of liability for underpayment of tax. And equitable tax relief, under Innocent Spouse, for a tax return that was filed incorrectly.

Relief from the IRS

The Internal Revenue Code is an ever changing document. Staying on top of those changes requires a tax professional who studies tax changes, is required by the IRS to obtain a certain number of hours in certified classes every year, to stay on top of those changes. Don’t put your families future in your hands, if you have any doubt about your ability to secure their future by getting the best result to them. We can make the process less stressful.

Give us a call and see what Federal Tax Resolution can do for you.

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