FAQ

Frequently Asked Questions

At Your Tax Clinic (home of My Tax Doctors®), we believe in full and honest disclosure regarding all aspects of our firm and tax resolution program. The following answers to Frequently Asked Questions are provided to help you better understand your situation and possible solutions.

If you have additional questions or would like further information, call us now for a FREE consultation with a Tax Resolutions Specialist (855)220-0770.

 

What can I do? I can’t pay what I owe. 
Many taxpayers find themselves in a position where they can never pay off the IRS. We hear many complaints everyday on how it’s mathematically impossible with the penalties and interest the IRS adds up everyday.  

What many taxpayers don’t realize is just about everything is workable with the IRS – if you know how. With the help of our tax professionals, the amount of delinquent tax liability you owe may be reduced to an amount you can afford to pay by submitting for an IRS tax relief program. We would need to work with you to determine your financial profile and request the IRS to consider you for a relief program that is affordable and fair.  

If you qualify (see below), the IRS Program called Offer in Compromise (OIC) is an agreement between the taxpayer and the government that settles a tax liability (including all penalties and interest) for payment of less than the full amount owed. When the IRS accepts your Offer and you pay it, then all federal tax liens are removed. You must remain compliant by filing and paying your tax returns for the next five consecutive years, or the liability will be re-assessed and all penalties and interest will be assessed as well. If you qualify and do comply, though, you will get your life back!  

The IRS will generally accept an OIC when it is unlikely that the tax liability can be collected in full and the amount offered reasonably reflects collection potential. An OIC is a legitimate alternative to declaring a case currently not collectible or to a “protracted installment agreement”. The OIC is an important tool to help taxpayers in limited circumstances; taxpayers are eligible only after other payment options have been exhausted and their ability to pay has been reviewed by the IRS.

Preparing and successfully negotiating an Offer in Compromise is a complex process and can take more than 6-18 months. Once your offer has been submitted to the IRS all collection activities against you stop.  

The IRS has the authority to settle, or “compromise,” federal tax liabilities by accepting less than full payment under certain circumstances. A delinquent tax debt can be legally compromised for one of the following reasons:

>> Doubt as to Liability – Doubt exists that the assessed tax is correct

>> Doubt as to Collect ability – Doubt exists that you could ever pay the full amount of tax owed.

>> Effective Tax Administration – There is no doubt the tax is correct, and no doubt that the amount owed could be collected, but an exceptional circumstance exists that allows the IRS to consider a taxpayer’s OIC. To be eligible for a compromise on this basis, the taxpayer must demonstrate that collection of the tax would create an economic hardship or would be unfair.


What Should I do?

  • According to the IRS, you can apply for an Installment Agreement, OIC or a penalty or interest abatement without the help of a third party. If you prefer third party assistance in negotiating with the IRS, only certain tax professionals – Enrolled Agents (federally -authorized tax practitioners who can represent taxpayers before all administrative levels of the IRS), Certified Public Accountants (CPAs), and attorneys – have the authority to represent you.
  • Complete IRS form 2848 Power of attorney (POA). Without this form, a specialist can do nothing for you. IRS requires this form before they will talk to anyone other than you about your case. Fill in your name(s), address, and Social Security number(s) on page one, then sign and date page two.
  • Read the IRS FAQ’s about Offer in Compromise 
  • Understand that there is an IRS application fee of $150.00 for the Offer in Compromise (OIC) in addition to any representation fees and there is no guarantee that your offer will be accepted.
  • Review IRS Form 656 Offer in Compromise booklet.  

Be realistic in your expectations. Not everyone qualifies for an OIC. The OIC is an important tool to help taxpayers in limited circumstances; taxpayers are eligible only after other payment options have been exhausted and their ability to pay has been reviewed by the IRS. You may actually owe the amount of your tax liability, and need to negotiate a manageable installment agreement.  

How do I stop the IRS from garnishing my wages, levying my bank account, or seizing my assets?  
When you become our client the first step for us is to stop the IRS and state’s collection procedures. This means that we will submit a request to have the IRS and state put all garnishing, levying, or seizures on hold while Your Tax Clinic negotiates the best possible resolution on your behalf. By securing a temporary freeze on further collection activity, we have  time to analyze your situation and determine the best course of action. We can negotiate with the IRS and state to set up a payment plan that will satisfy them. Our tax professionals can ensure that installment payments are within your means.  

Why hire Your Tax Clinic Tax Resolution Specialists?  
While taxpayers may always represent themselves before the IRS and state to resolve back taxes and problems, many taxpayers find dealing with them frustrating, time-consuming, intimidating or all of the above and so they make the decision to hire professional tax help (specialized tax resolution firm, etc.) to negotiate a tax resolution settlement with the IRS on their behalf.  

What is an Enrolled Agent?    
An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. Only Enrolled Agents, attorneys, and CPAs may represent taxpayers before the IRS. Your Tax Clinic has these professionals on staff.  

Is there a guarantee of how much I can save by hiring your firm? 
You should be very suspicious of any firm that guarantees you any results regarding your tax debt and especially of a pennies on the dollar offer. We have some of the top tax professionals in the industry so by hiring our firm we will enforce every possible tax code that you qualify for and put you in the best possible situation in regards to the taxes that you owe. Whether we reduce your tax liability, get an affordable installment plan, protect your situation or just stop your tax debt from getting worse, hiring our team is vital if seeking to improve your situation and have the peace of mind that your problem is properly represented and handled by experts.

Does the IRS have the right to take my home?
Yes. The IRS has the authority to seize and sell your home, car, etc. to pay delinquent tax debts from IRS back taxes still owed.

Will I get any warning before the IRS freezes my bank accounts or seizes my assets?
Yes. The IRS must notify the taxpayer prior to levy or seizure. Notices must be sent certified mail to your last known address. However, many delinquent taxpayers move frequently and do not receive these notices.

Can you be sent to jail for not filing tax returns?
It is possible, but not likely. The IRS considers the act of not filing tax returns as being non-compliant with tax laws. Tax fraud or tax evasion charges are usually brought against individuals in organized crime or public figures. Is the IRS ever willing to deal with you? Yes. Especially now in the current economy. The IRS offers many tax relief options for settling back taxes.

Does I as a taxpayer have any rights at all?
Absolutely. The Declaration of Taxpayer Rights declares these rights for:
Protection of Your Rights
Privacy and Confidentiality
Representation by a Tax Attorney, CPA, or Federally Enrolled Agent
Payment of Only the Correct Amount of Tax
Help with Unresolved Tax Problems
Appeals and Judicial Review
Relief from Certain Penalties and Interest

What’s the difference between a levy and a lien?
An IRS levy is the legal seizure of your property to satisfy a tax liability. An IRS lien is used as security for a tax debt and will prevent you from selling or refinancing your home.

I only owe payroll taxes. Can the IRS go after my personal assets?
Yes. The IRS can assess the Trust Fund Recovery Penalty even if the business is defunct. The penalty for willful failure to pay withheld income and employment taxes can be assessed against the individual(s) responsible for collecting and paying these taxes.

Will ignoring the IRS notices make them give up?
Rarely does the IRS “give up”. Ignoring the IRS will lead to more forceful collection action such as a bank account levy, wage garnishment, or seizure of property. Responding to the IRS as soon as possible will avoid a hostile environment.

Can I settle my tax debt for less?
Possibly. You may be able to apply for an Offer in Compromise (OIC), commonly touted by unethical tax relief firms as the “pennies on the dollar” program. Qualifying for an OIC is complex and is best handle by a experienced tax attorney. Your tax attorney may also be able to negotiate the waiving of IRS penalties and fines.

If you have additional questions or would like further information, call us now for a FREE consultation with a Tax Resolutions Specialist (855)220-0770.