IRS ‘Dirty Dozen’ List Warns People About Offer in Compromise ‘Mills’ - Call M&A for Real & Experience Tax Attorneys!

WASHINGTON – The Internal Revenue Service continued its “Dirty Dozen” tax scams with a warning for people to watch out for predators using tax-related schemes ranging from fake charities to scams targeting seniors and immigrants.

The IRS continues to see a group of ruses by dishonest people who trick others into doing something illegal or which ultimately causes them harm. Predators encourage otherwise honest people to do things they don’t realize are illegal or prey on their good will to take something from them.

Here are five of this year’s “Dirty Dozen” scams. 1. Fake charities, 2. Immigrant/senior fraud 3. Seniors beware, 4. Offer In Compromise ‘Mills’ and 5. Unscrupulous Tax Return Preparers. 

Offer In Compromise ‘Mills’ 

Offer in Compromise mills contort the IRS program into something it’s not – misleading people with no chance of meeting the requirements while charging excessive fees, often thousands of dollars.

“We’re Increasingly Concerned That People Having Trouble Paying Their Taxes Are Being Duped Into Misleading Claims About Settling Their Tax Debts For ‘Pennies On The Dollar’,” Said IRS Commissioner Chuck Rettig. 

The IRS urges people to take a few minutes to review information on IRS.gov to see if they might be a good candidate for the program and Avoid Costly Promoters Who Advertise On Radio And Television.”

The IRS Reminds Taxpayers To Beware Of Promoters Claiming Their Services Are Needed To Settle With The IRS, That Their Tax Debts Can Be Settled For “Pennies On The Dollar” 
or That There Is A Limited Window Of Time To Resolve Tax Debts Through (OIC).

An “offer,” or OIC, is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax debt. The IRS has the authority to settle, or "compromise," federal tax liabilities by accepting less than full payment under certain circumstances. However, some promoters are inappropriately advising indebted taxpayers to file an OIC application with the IRS, even though the promoters know the person won’t qualify. This costs honest taxpayers money and time.

Taxpayers should be especially wary of promoters who claim they can obtain larger offer settlements than others or who make misleading promises that the IRS will accept an offer for a small percentage. 

Companies Advertising On TV Or Radio
Frequently Can’t Do Anything For Taxpayers ...

For more information about Tax Relief Companies see the information on fake charity scams on the Federal Trade Commission web site detailing how Tax relief companies use the radio, television and the internet to advertise help for taxpayers in distress. If you pay them an upfront fee, which can be thousands of dollars, these companies claim they can reduce or even eliminate your tax debts and stop back-tax collection by applying for legitimate IRS hardship programs. 

The truth is that most taxpayers don't qualify for the programs these fraudsters hawk, their companies don't settle the tax debt, and in many cases don't even send the necessary paperwork to the IRS requesting participation in the programs that were mentioned. Adding insult to injury, some of these companies don't provide refunds, and leave people even further in debt.

The majority of tax settlement companies charge their clients an initial fee that can easily run anywhere between $3,000 to $6,000, depending on the size of the tax bill and proposed settlement. In most cases, this fee is completely nonrefundable. This fee quite often mysteriously mirrors the amount of free cash the client has available. This is generally the amount of cash the company says it will save the client in tax payments.

Clients have also complained to the Better Business Bureau (BBB) and the Federal Trade Commission (FTC) that some of these firms have not produced any of the promised results and, in fact, the organization was a scam. Many firms also materially misrepresent their fees to clients, perhaps charging them initially with a lower fee before coming back for more once they are deeply involved in the process.

Have a Tax Problem?    

 

Real Tax Problems Require

Real Tax Attorneys!

 

Contact the Tax Lawyers at 

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 for a FREE Tax Consultation Contact US at

www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888 882-9243).

 

 



IRS Makes It Easier To Set Up Payment Agreements; Offers Other Relief To Taxpayers Struggling With Tax Debts EnglishEspañol

The Internal Revenue Service on November 2, 2020 announced in IR-2020-248 a number of changes designed to help struggling taxpayers impacted by COVID-19 more easily settle their tax debts with the IRS.

Taxpayers who owe always had options to seek help through payment plans and other tools from the IRS, but the new IRS Taxpayer Relief Initiative is expanding on those existing tools even more.

The revised COVID-related collection procedures will be helpful to taxpayers, especially those who have a record of filing their returns and paying their taxes on time. Among the highlights of the Taxpayer Relief Initiative:

• Taxpayers who qualify for a short-term payment plan option may now have up to 180 days to resolve their tax liabilities instead of 120 days.
• The IRS is offering flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted Offer in Compromise.
• The IRS will automatically add certain new tax balances to existing Installment Agreements, for individual and out of business taxpayers. This taxpayer-friendly approach will occur instead of defaulting the agreement, which can complicate matters for those trying to pay their taxes.
• To reduce burden, certain qualified individual taxpayers who owe less than $250,000 may set up Installment Agreements without providing a financial statement or substantiation if their monthly payment proposal is sufficient. 
• Some individual taxpayers who only owe for the 2019 tax year and who owe less than $250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS.
• Additionally, qualified taxpayers with existing Direct Debit Installment Agreements may now be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates.

Installment Agreement options are available for taxpayers who cannot full pay their balance but can pay their balance over time. 

The IRS Expanded Installment Agreement Options To Remove The Requirement For Financial Statements And Substantiation

 In More Circumstances For Balances Owed Up To $250,000 If The Monthly Payment Proposal Is Sufficient.

The IRS also modified Installment Agreement procedures to further limit requirements for Federal Tax Lien determinations for some taxpayers who only owe for tax year 2019.

In addition to payment plans and Installment Agreements, the IRS offers additional tools to assist taxpayers who owe taxes:

• Temporarily Delaying Collection — Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer's financial condition improves.
• Offer in Compromise — Certain taxpayers qualify to settle their tax bill for less than the amount they owe by submitting an Offer in Compromise. 
• Relief from Penalties — The IRS is highlighting reasonable cause assistance available for taxpayers with failure to file, pay and deposit penalties. First-time penalty abatement relief is also available for the first time a taxpayer is subject to one or more of these tax penalties.

"If you're having a tax issue, don't go silent. Please don't ignore the notice arriving in your mailbox," Guillot said. "These problems don't get better with time. We understand tax issues and know that dealing with the IRS can be intimidating," so hiring experience Tax Attorneys prevent you from having deal with the IRS while addressing and resolving your tax problems!

Have IRS Tax Problems?

 Contact the Tax Lawyers at
Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243) 

Do Not Expect any Unscheduled Visits from Revenue Officers as SBSE-05-1020-0084 Tells Them To Stay At Home

Procedurally taxing has a detailed post describing how recent IRS guidance to Revenue Officers, SBSE-05-1020-0084, advising them essentially to continue avoiding going into the field, unless absolutely necessary will impact collections, offers in compromise and the filing of Notice of Federal Tax Lien and other collection notices.

The hallmark of a revenue officer is showing up and providing a physical presence to let the taxpayer know that the IRS has not forgotten about them and the unpaid taxes.  Essentially, ROs were told to sit tight when the pandemic hit.  The new guidance extends this situation until January 31, 2021.  

Have an IRS Tax Problem?

 Contact the Tax Lawyers at
Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243) 

IRS Will Resume Issuing The 500 Series "Balance Due Notices" To Taxpayers Later This Month

On August 26, 2020 we posted IRS Is Not Sending Notices for Unpaid Taxes Until it Catches Up on Mail Backlog, where we discussed on August 21, 2020, the IRS announced that it has suspended the mailing of three notices – the CP501, the CP503 and the CP504 – that go to taxpayers who have a balance due on their taxes. 

Although the IRS continues to make significant reductions in the backlog of unopened mail that developed while most IRS operations were closed due to COVID-19, this temporary adjustment to processing is intended to lessen any possible confusion that might be associated with delays in processing correspondence received from taxpayers.

Now the IRS will resume issuing the 500 series balance due notices to taxpayers later this month. These notices were paused on May 9 due to COVID-19.

Although the IRS continued to issue most agency notices, the 500 series were suspended temporarily because of a backlog of mail at the IRS due to COVID-19. 

The Mail Backlog Is Now Caught Up Enough
To Account For The Timely Mailed Payments.

In late October or early November some taxpayers will begin seeing the updated 500 series notices with current issuance and payment dates.

Have IRS Tax Problem?

 Contact the Tax Lawyers at
Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243) 

TIGTA Lists 10 Most Serious Challenges for IRS for FY 2021 - INCREASING INTERNATIONAL TAX COMPLIANCE

On October 19, 2020 we posted TIGTA Lists 10 Most Serious Challenges for IRS for FY 2021, where we discussed that TIGTA, in an Oct. 14 memorandum to Treasury Secretary addressed the 10 most serious management and performance challenges confronting IRS in fiscal year 2021. TIGTA has a statutory requirement to submit an annual report on the subject. Herein we would like to discuss problem #9 INCREASING INTERNATIONAL TAX COMPLIANCE

Complexity and change in the international tax environment require that the IRS collaborate with tax administrations of foreign countries to enforce compliance. The IRS must continue to focus significant efforts on global tax cooperation and tax administration practices that can prevent and resolve disputes among countries to increase certainty for taxpayers. 

In most cases, foreign persons are subject to U.S. tax of 30 percent (or lower treaty rate) on their U.S. source income. A foreign individual is any person that is not a U.S. person, including a nonresident alien, a foreign corporation, a foreign partnership, a foreign trust, or a foreign estate. The U.S. tax owed is generally withheld from payments made to foreign persons by a withholding agent. A withholding agent is any U.S. or foreign entity (individual, corporation, partnership, etc.) that takes receipt of, has control or custody of, or disposes of or makes a payment of any income to a foreign individual that is subject to withholding. Withholding agents are required to file Forms 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, to report on an individual taxpayer basis the income and withholding for each foreign person. For Tax Year 2017, the IRS received 6.3 million Forms 1042-S from 49,618 withholding agents. These agents reported U.S. tax withholdings totaling more than $528 billion.

In response to our prior recommendations, the IRS has implemented processes to improve its identification of reporting discrepancies for Federal tax withheld on U.S. source income paid to foreign individuals. However, these processes did not identify some withholding tax discrepancies. TIGTA reported that IRS processes did not identify 1,919 withholding agents with reporting discrepancies totaling more than $182.7 million. 

Our Review Also Identified 366 Withholding Agents That Claimed $506 Million More In Credits For Tax Withheld Than Was Reported On The Forms 1042-S.

In addition, partnerships conducting business in the United States are required to withhold taxes on certain income paid to foreign partners. A foreign partner can be a foreign corporation, foreign partnership, and any other person who is not a U.S. citizen. The withholding serves as an incentive for foreign partners to file the appropriate U.S. tax return. However, TIGTA reported that the IRS’s compliance efforts in this area can be improved. TIGTA identified significant errors in the database that the IRS uses to track withholding reported by partnerships, which limits the IRS’s ability to verify withholding credits and accurately identify potential nonfilers.

Foreign individuals are also required to pay tax related to the sale of U.S. real estate. Specifically, the Foreign Investment in Real Property Tax Act (FIRPTA) of 1980 imposes an income tax on foreign persons selling U.S. real property interests. Buyers are required to withhold a percentage of the anticipated taxes due on the amount realized from the sale. A foreign seller of U.S. property can claim a credit for the tax withheld by the buyer. If the seller’s tax liability is less than the amount of tax withheld, the seller gets a refund of the difference. TIGTA reported that the IRS’s reconciliation processes do not effectively identify and address FIRPTA reporting and payment noncompliance.(TIGTA, Ref. No. 2020-40-014, Millions of Dollars in Discrepancies in Tax Withholding Required by the Foreign Investment in Real Property Tax Act Are Not Being Identified or Addressed (Mar. 2020))

TIGTA Identified 2,988 Buyers With Discrepancies of More
Than $688 Million Between The Withholding Reported
on Forms 8288-A, Statement Of Withholding On Dispositions
By Foreign Persons Of U.S. Real Property Interests,
Filed During Processing Year 2017 And The Withholding Assessed To The Buyer’s Tax Account.

Extensive data inaccuracies in the FIRPTA database, incorrect and unclear guidelines, and employee errors contributed to these discrepancies.

The IRS also has not established processes to use Form 1099-S, Proceeds from Real Estate Transactions, to identify buyers that do not report and pay FIRPTA withholdings. 

TIGTA’s Analysis Of Forms 1099-S For Tax Year 2017 Identified Approximately $22 Million In FIRPTA Withholding That Was Not Reported And Paid To The IRS.

Finally, employee errors resulted in 1,835 foreign individuals potentially receiving more than $60 million in FIRPTA withholding credits than they were entitled.

Have an International IRS Tax Problem?

                                                                Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)