Tax Resolution Options
In our previous post, Tax Resolution: What is It?, we kicked off our newest mini-series discussing the subject of Tax Resolution. Unfortunately, tax resolution and tax relief are services many Americans require to help them with IRS-related issues. As we discussed in Tax Resolution: What is It?, people can end up owing the IRS money for a variety of reasons, but some of the most common are related to filing improper paperwork, making incorrect payments or making late payments. The bigger issue is that once a problem starts with the IRS, if it’s not taken care of in the proper amount of time, it can grow from a tiny snowball into a massive avalanche of trouble.
That’s why we, the team of tax resolutions specialists at Bullseye Tax Relief, are here to help! In this blog post, we’ll discuss some of the common options you or your business may have when it comes to tackling your tax resolution problems.
But remember, when it comes to the IRS, time is of the essence! So if you have any upcoming deadlines, or received any recent filings of notices from the IRS, give us a call at (844) 582-3323, or send us an email at info@bullseyedebtrelief.com now!
Common Tax Resolution Options
As we mentioned at the end of the last blog post, Tax Resolution: What is It?, there are some options available to individuals and businesses to allow them to relieve their debt to the IRS without causing financial hardship. In this post, we’ll share some of the basics about the most common options, like Offer in Compromise, Currently Non-Collectible, Penalty Abatement, Install Agreements and the Partial Pay Installment Agreement. In our following posts, we’ll discuss each one individually in more detail.
Offer in Compromise:
Offer in Compromise (OIC) allows someone to negotiate their tax debt and potentially settle their debt for less than the original total amount owed. Offer in Compromise was created for people with an overwhelming amount of tax debt that they won’t be able to pay off without experiencing financial hardship. To learn more about Offer in Compromise, visit our Offer in Compromise Page or read our next blog post!
Currently Non-Collectible:
Currently Non-Collectible allows someone to essentially pause the collection activities of the IRS for a period of time. Currently Non-Collectible typically applies if you agree that you owe outstanding funds to the IRS, but your current financial situation makes it impossible to repay those outstanding funds without causing financial hardship. Learn more about Currently Non-Collectible here.
Penalty Abatement:
Penalty Abatement Relief allows someone to potentially waive certain penalties or fees from the IRS. The fees eligible for penalty abatement are typically associated with penalties relating to the failure to file taxes or make payments on time as an individual or failure to deposit certain taxes as a business. Visit our Penalty Abatement Page to learn more.
Installment Agreement:
An Installment Agreement allows someone that isn’t able to re-pay their tax debt in full the opportunity to pay off their debt in monthly payments. There are many different types of IRS installment agreements with different advantages. To learn more, visit our Installment Agreement Page or contact us today
Partial Payment Installment Agreement:
A Partial Payment Installment Agreement allows someone to pay back a portion of their, rather than the full amount, over a period of time specified by the IRS. The Partial Payment Installment Agreement is particularly beneficial because it allows someone to repay less than they originally owed. Learn more on our Partial Payment Installment Agreement Page.
In our next blog post, Tax Resolution Services: Offer in Compromise Requirements, we’ll go into more detail about the requirements to take advantage of the Offer in Compromise tax resolution option. Check back soon!
Rush Tax Resolution Services – What are they?
If you’ve recently received a letter or a notice from the IRS, you typically have a limited amount of time to act before the situation escalates or you or your business are penalized with fines or fees. In these cases, rush tax resolution services may be the answer. Rather than allowing the penalties to begin to pile up, taking quick action to contact a rush tax resolution specialist like Bullseye Tax Relief can end up saving you or your business a ton of money in the long-run.
If you are new to our Tax Resolution Services blog series, or are unfamiliar with tax resolution services, you can start at the beginning of our series with the blog posts Tax Resolution: What is it? and Tax Resolution: What are my Options? Our posts are all quick reads and start with the basics of tax resolution services so you don’t get lost or confused on the way. In our upcoming blog posts, we’ll discuss some of the specific tax resolution solutions like Offer in Compromise and the Partial Payment Installment Agreement, both of which provide opportunities to potentially settle your debt owed to the IRS for less than the original amount, so you may want to subscribe or like us on Facebook to stay up-to-date!
Rush Tax Resolution Services
Like the name suggests, rush tax resolution services, sometimes referred to as rush tax relief solutions, are expedited tax resolution services tailored to individuals or businesses that need help immediately. Think of it like the emergency room, as opposed to going to the doctor’s office. If your situation requires urgency, you’re much better off heading straight to the emergency room, rather than calling your doctor and scheduling an appointment for the next week. While the emergency room may cost more, if the issue requires immediate attention, like a broken bone or serious injury, taking immediate action will save a significant amount of money in the long term. Waiting on something urgent, in most cases, will only increase the problem and thus, the amount of money required to fix it.
If you have an immediate need for tax resolution services, we advise that you contact our team of tax resolution specialists here at Bullseye Tax Relief today. We can be reached by phone at (844) 582-3323 or by email at info@bullseyedebtrelief.com.
Rush Tax Resolution – What to look out for!
With the help of Google, we were able to find some of the questions people also ask when it comes to rush tax resolution services (as of Nov. 21, 2020) and we found an interesting question that was answered by CreditKarma on their page Tax Debt Relief: Real Help or Just a Scam?:
“Are tax resolution companies legitimate?
While there may be legitimate tax-debt-relief companies, there are also plenty of scammers. The Federal Trade Commission says that a company demanding payment before doing anything for you is a sign of a scam.”
The same is definitely true for rush tax resolution services too! That’s why we, here at Bullseye Tax Relief, are proud to offer free consultations and a free transcript analysis for all new clients! This allows you to have the ease of mind that it won’t cost you money just to find out what your options are.
To get started with your free consultation, visit our homepage, give us a call at (844) 582-3323, or send us an email at info@bullseyedebtrelief.com.
Sources
What is Tax Resolution?
Hello and welcome to our newest blog series focused on everything you need to know about Tax Resolution. In our previous mini-series, we discussed Employment Tax and some of the things you may need to know regarding the taxes associated with having employees like payrolls taxes and unemployment. To learn more, get started here: Employment Tax: What is it?
For those interested in learning more about Tax Resolution, like some of the common problems and what your options are, you’re in the right place!
Tax Resolution: Common Problems
In our previous series, specifically in the blog post Employment Tax: Issues and Relief, we discuss some of the possible problems that might require tax resolution with regards to employment tax issues. The most common problems people have to deal with when it comes to employment tax are failure to issue the proper forms, failure to withhold and/or pay federal taxes and late employment tax payments.
While these issues specifically may not apply to you, the reasoning behind some of them may be the same as the issues you are faced with that need tax resolution assistance. These main issues are filing the wrong paperwork, failing to pay the right amount of taxes or making late payments. Many of these might seem like small mistakes or minor errors, but to the IRS, they can become a big deal. And if you let these issues pile up, or don’t address them quickly enough, they can turn into a huge headache for you or your business.
But don’t fear! Our Tax Resolution blog series is here to help! And the team of skilled and experienced Tax Resolution specialists at Bullseye Tax Relief are ready and available to assist with any of your tax-related needs.
Tax Resolution Options
A growing debt of money owed to the IRS is enough to weigh down anyone, but there are options available to help pay down your outstanding funds without leaving a person crushed by the financial hardship indefinitely. After all, the IRS would rather get most or some of its money, rather than none at all. That’s why it’s so important to turn to a team of tax resolution specialists with decades of experience that are prepared to fight on your behalf. Because, while the IRS will settle for less than owed at times, they still want to get as much money as they can.
In our next blog post, Tax Resolution: What are my Options?, we’ll discuss some of the options individuals and businesses have available to them to negotiate with the IRS. From Offer in Compromise and Currently Non-Collectible to Penalty Abatement, Install Agreements and the Partial Pay Installment Agreement, we’ll cover it all!
To start your journey towards a life free of increasing tax debt and growing worries, give our team of tax resolution specialists a call today at (844) 582-3323 or send us an email at info@bullseyedebtrelief.com.
What is Collection Due Process?
If you owe money to the IRS, after some time and a certain amount of notices, they will begin to initiate collection activities. This means they will look to reclaim the outstanding dues from either you or your business, depending on which owes the IRS money. Usually, the way the IRS attempts to collect this money from individuals is by one of two methods, either by filing a bank levy, or by using the Notice of Federal Tax Lien (NFTL). If you disagree with the amount owed and want to dispute it, a Collection Due Process hearing is your opportunity to do so.
But you have to act fast!
In this blog post, we’ll discuss what collection due process is, how to file for it and how long you have to do so. If you’re looking for more information about tax relief options, our previous blog posts discuss all things related to employment tax, from what it is and how it’s different from self-employment tax, to some of the penalties associated, like trust fund penalties.
Collection Due Process
As of November 16, 2020, according to the IRS page, Collection Due Process (CDP) FAQs, a Collection Due Process is a hearing during which you have “an opportunity to discuss alternatives to enforced collection and permits you to dispute the amount you owe if you have not had a prior opportunity to do so.” This hearing will be before an impartial member of the IRS and is your legal right under the IRS Code Section 6320. However, there are some requirements when it comes to requesting and receiving this Collection Due Process hearing.
When to Request a Collection Due Process Hearing
According to the same IRS Page, “You have 30 days from receipt of an LT11 or L-1058 to request a Collection Due Process (CDP) hearing” and “you should request a CDP hearing using Form 12153 if you feel the levy is inappropriate.”
- LT11 – The LT11 is a letter from the IRS issuing a “Notice of Intent to Levy and Notice of Your Right to a Hearing.” This means that they are formally beginning the collection activities against you and you officially have 30 days to request the Collection Due Process hearing to dispute the claims.
- L-1058 – As of November 17, 2020, according the IRS Page, Understanding Your LT11 Notice or Letter 1058, the L-1058, as well as the LT11 are both ways of communicating that the IRS has not “received your payment for overdue taxes [and they] intend to seize your property or rights to property.”
How to Request a Collection Due Process Hearing
As mentioned in the previous section, to request a Collection Due Process hearing, you must file Form 12153 with the IRS. Typically, this is sent to the address given in either the LT11 or L-1058, but you can also call the IRS in an attempt to verify where you should send Form 12153 to.
When it comes to something as serious as a Collection Due Process hearing and the potential levies and collection activities taken against you by the IRS, it’s always best to seek professional assistance. If you’re considering requesting a CDP, check out our Collection Due Process page for more information, or contact the team at Bullseye Tax Relief today.
Sources:
https://www.irs.gov/appeals/collection-due-process-cdp-faqs
https://www.irs.gov/pub/notices/lt11_english.pdf
https://www.irs.gov/individuals/understanding-your-lt11-notice-or-letter-1058
Trust Fund Penalty Assessment Interview
Trust Fund Penalties are fines and fees imposed by the IRS on businesses, or, as we discussed in our previous blog post, Employment Tax: Trust Fund Penalty Assessment, responsible and willfully neglectful members of the business that did not properly pay the business’s Trust Fund Taxes. Trust Fund Taxes are the taxes that a business is required to withhold and match on behalf of their employees. These Trust Fund Taxes are made up mostly of Medicare taxes and Social Security taxes, and are sometimes also referred to as payroll taxes or employment taxes.
If you’re new to the subject, you can learn more about employment taxes, like what they are and what the differences are between employment taxes and self-employment taxes, by viewing the beginning of our Employment tax blog series here: What is Employment Tax?
In this blog post, we’ll build on our previous blog post, Employment Tax: Trust Fund Penalty Assessment, and dive a little deeper into the process following a Trust Fund Penalty Assessment.
The Trust Fund Penalty Assessment Process
If the IRS has found that a business has failed to pay its Trust Fund Taxes on time or in an insufficient amount, they will look to assess responsibility and willfulness. To assess this responsibility and willfulness, the IRS will look to conduct a Trust Fund Penalty Assessment Interview with any members of the business it views as potentially accountable. This is sometimes also known as a 4180 Interview, since the IRS representative will conduct the interview using Form 4180, the Report of Interview With Individual Relative to Trust Fund Recovery Penalty.
As of October 21, 2020, according to the IRS, responsibility can be determined “based on whether an individual exercised independent judgment with respect to the financial affairs of the business.” Meaning that an employee doing as directed by a superior is not held responsible in the eyes of the IRS, while the superior might be, unless they were also directed to do so.
Since one of the main reasons a business might not be able to pay these Trust Fund Taxes in the proper amount or in a timely manner is because they used the funds to pay for something else, the IRS included that scenario in their example of willfulness, stating that “using available funds to pay other creditors when the business is unable to pay the employment taxes is an indication of willfulness.” So, unfortunately, even if a business has fallen on hard times and needs to borrow money from other sources, like withholdings, that’s not a good enough reason for the IRS, and may actually be evidence of willfulness.
Avoiding the The Trust Fund Penalty Assessment Interview
Fortunately, there are ways to avoid the The Trust Fund Penalty Assessment Interview and mitigate the Trust Fund Penalty!
If you, your business, or someone you know is struggling with the Trust Fund Penalty process, check out our Trust Fund Penalty Assessment Interview page to learn more or call us today to get help!
In our next blog posts, we’ll discuss what a Collection Due Process is and what it means for your business.
Sources
IRS – Employment Taxes and the Trust Fund Recovery Penalty (TFRP): https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes-and-the-trust-fund-recovery-penalty-tfrp
Trust Fund Penalty Assessment
As we discussed in the previous blog post in the series, Employment Tax: Trust Fund Penalty, a Trust Fund Penalty is associated with ‘Trust Fund Taxes,’ sometimes known as employment taxes or payroll taxes. These ‘Trust Fund Taxes’ specifically refer to the taxes a business is required to withhold and match on behalf of their employees. These withheld taxes are the contributions to Social Security taxes and Medicare taxes that a business also matches for its employees and then pays to the IRS in the form of a federal tax deposit. A business will be assessed a Trust Fund Penalty if it does not pay these taxes to the IRS by the correct time or in the correct amount.
If this is a bit confusing so far, check out the previous post on Trust Fund Penalties to get caught up!
In this post, we’ll discuss the terms under which the IRS will assess this Trust Fund Penalty, also known as the Trust Fund Recovery Penalty (TFRP), and who the IRS will hold responsible.
Criteria for a Trust Fund Penalty Assessment
There are two major factors when it comes to Trust Fund Penalty Assessment: responsibility and willfulness. According to the IRS, as of October 21, 2020, the Trust Fund Penalty can be assessed against anyone who:
- “Is responsible for collecting or paying withheld income and employment taxes, or for paying collected excise taxes, and
- Willfully fails to collect or pay them.”
What this means is that the Trust Fund Penalty can be assessed against the people in the business who were responsible for handling the Trust Fund Taxes. But it also requires that the person willfully failed to pay these taxes. We’ll cover what the IRS defines as ‘willful’ and who it defines as ‘responsible’ next.
Trust Fund Penalty Assessment: Responsibility and Willfulness
As of October 21, 2020, the IRS defines a ‘responsible’ person as “a person or group of people who has the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes.” In general, this means that if a person is, in some way, involved in or in charge of the finances, accounting, collection or payroll, the IRS could view them as someone eligible for a Trust Fund Penalty. But, as we mentioned above, willfulness to not pay these Trust Fund Taxes must also be determined.
According to the same IRS page about Employment Taxes and the Trust Fund Recovery Penalty (TFRP), for the IRS to determine willfulness, a person:
- “Must have been, or should have been, aware of the outstanding taxes and
- Either intentionally disregarded the law or was plainly indifferent to its requirements (no evil intent or bad motive is required).”
While willfulness may seem harder to prove than responsibility, the next step in the Trust Fund Penalty Assessment is the Trust Fund Penalty Assessment Interview, during which the IRS will attempt to determine whether a person is responsible and acted willfully or not.
If you, your business or your colleagues are in any of the stages of a Trust Fund Penalty Assessment, give us a call today! For a full list of who can be held responsible for Trust Fund Penalties, visit our Trust Fund Penalty Assessment page to learn more.
In our next blog post, Employment Tax: Trust Fund Penalty Assessment Interview, we’ll discuss the Trust Fund Penalty Assessment Interview and the next steps the IRS taxes during a Trust Fund Penalty Assessment.
Sources
IRS – Employment Taxes and the Trust Fund Recovery Penalty (TFRP): https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes-and-the-trust-fund-recovery-penalty-tfrp
What is a Trust Fund Penalty?
If you’re unfamiliar with what a Trust Fund Penalty is, you might be wondering how Employment Tax and Trust Fund Penalties are related. And you wouldn’t be the first! That’s why we, here at Bullseye Tax Relief, wanted to clear up any confusion.
In our Employment Tax blog series, we’re covering all the basics about Employment Tax – What it is, What Self-Employment Tax Is, and Employment Tax Issues and Relief – so business owners like yourself have a source they can turn to get a better understanding of all things Employment Tax in 2020 and beyond.
In this post, we’ll get into the details about what a Trust Fund Penalty is, what causes it and what you can do to avoid receiving Trust Fund Penalties for your business.
Trust Fund Penalty
As of October 21, 2020, according to the IRS page, Employment Taxes and the Trust Fund Recovery Penalty (TFRP), a Trust Fund Penalty, also known as a Trust Fund Recovery Penalty (TFRP), exists to “encourage prompt payment of withheld income and employment taxes, including social security taxes, railroad retirement taxes, or collected excise taxes.”
What this means is that the IRS will issue fines and fees if a business is either late or doesn’t pay their employment taxes, especially what the IRS considers to be ‘Trust Fund Taxes.’ These taxes are different from any taxes that might be associated with a typical ‘trust fund,’ as many have come to think of the term.
Trust Fund Taxes
In the context of Trust Fund Penalties, the IRS (as of October 21, 2020) defines Trust Fund Taxes as “money withheld from an employee’s wages (income tax, Social Security, and Medicare taxes) by an employer and held in trust until paid to the Treasury.” As we discuss in our first blog post in the series, What is Employment Tax?, these taxes like Social Security and Medicare are sometimes also known as payroll taxes or employment taxes. These are the taxes a business is required to withhold and match on behalf of their employees. Because they are “held in trust” by the business, and then paid to the IRS later on, these are also called Trust Fund Taxes.
How to Avoid a Trust Fund Penalty
The simple answer to avoiding a Trust Fund Penalty is to pay the correct amount of trust fund taxes at the correct time. While this answer may seem simple, we also recognize that there are many circumstances under which this can become more complicated, whether the business has fallen on hard times, or accounting miscalculations, or any other number of reasons. That’s why we want you to know you’re not alone. The team of experts at Bullseye Tax Relief have helped a wide range of businesses manage Trust Fund Penalties and we can do the same for yours!
Feel free to check out our Trust Fund Penalty page for more information.
In our next blog post, Employment Tax: Trust Fund Penalty Assessment, we’ll look at the two factors the IRS considers when it decides to issue a Trust Fund Penalty.
Sources
- IRS – Employment Taxes and the Trust Fund Recovery Penalty (TFRP):
https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes-and-the-trust-fund-recovery-penalty-tfrp - IRS – Trust Fund Taxes: https://www.irs.gov/businesses/small-businesses-self-employed/trust-fund-taxes
