Appealing an IRS Notice of Deficiency in New Orleans

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When people face an audit or disagree with an IRS auditor’s determination of one’s tax liability, the situation can be stressful, but there are multiple options to appeal such a decision.  This means that taxpayers who dispute their tax liability can challenge a Notice of Deficiency if they are not able to negotiate an agreement based on an audit.  It is a mistake to assume that a rank-and file IRS auditor’s evaluation that you owe a tax deficiency is accurate because tax appeal officials have more extensive knowledge of complex tax issues.  New Orleans Tax Appeals Attorney Paul A. Grego can advise you regarding your options and aggressively pursue the appropriate option.

There are two options for appealing a determination that you have a tax deficiency which include a Direct Appeal and a Tax Court Petition.  If you wish to appeal a notice of deficiency, it is important to seek legal advice promptly because strict time limits apply.  A direct appeal must be initiated within thirty days while taxpayers have ninety days to pursue a tax court petition after receiving the notice of deficiency which will indicate not only additional taxes assessed but also specify applicable penalties and interest.

While Mr. Grego can explain both options, a tax court petition often will be the more effective approach.  A direct appeal not only involves a shorter timeline to respond but also requires more detailed and extensive disclosure of information than a pleading you file in tax court.  Further, tax court appeals require IRS officials to move more rapidly to resolve cases because the appeals are placed on the judge’s calendar in U.S. Tax Court.  The IRS is overwhelmed with an enormous caseload so IRS lawyers face pressure to resolve the matter because the tax court judge will have an interest in moving the case forward.  This creates time pressure that may motivate the IRS lawyer to agree to a reasonable settlement more promptly.

The other benefit of retaining a tax attorney and filing a tax court appeal is that it communicates the message to the IRS that you are prepared to pursue litigation over the assessed deficiency.  The fact that you are both willing and prepared to pursue a potential trial regarding the claimed tax liability also creates an incentive for the IRS to settle the matter.

If you have received a Notice of Deficiency from the IRS, you should contact experienced Louisiana tax attorney Paul A. Grego.  We offer a free initial consultation so that we can answer your questions and provide an initial assessment of your situation.  Call us today at 504-302-4949 or email us.

Be On the Lookout for Sophisticated Tax Scams

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Imagine that you have just received an email from the IRS informing you that an error was made on your return and that you are due a refund. The email directs you to a website so you can update some personal information that is necessary for the refund to be processed. Sound too good to true? Sound a little fishy? Actually, this is what is commonly known as a “phishing” scam. The most common phishing scams request information from an individual to supposedly process a return or update records. The scammers take the data and then use the data to steal a person’s identity and/or cash. While phishing scams target victims through email, telephone scams also exist.
In a recently reported telephone scam, taxpayers receive a phone call from an alleged IRS agent. The phony agent informs the taxpayer that the taxpayer owes a large sum of money to the IRS and that the sum needs to be paid in full immediately. The phony agent gives the taxpayer the option of paying the sum with either a prepaid debit card or a wire transfer. If the taxpayer does not agree to make the payment, the conversation then turns hostile with the phony agent becoming agitated and insulting towards the taxpayer. If these tactics do not work to get the taxpayer to agree to one of the payment methods, then the agent may threaten the person with arrest, loss of a business or driver’s license, or even deportation. This scam often targets individuals who have recently immigrated to the United States.
To help keep yourself from becoming the victim of an IRS scam, be on the lookout for these typical “scam-related” warning signs:
• Be wary of any form of unsolicited communication that requires you to provide the IRS with detailed personal and/or financial information.
• Remember that there is only one official website for the IRS which is irs.gov. Steer clear of any communication that directs you to another site such as irs.com, irs.net, or irs.org.
• Do not be fooled by logos. Scammers can be very sophisticated and may try to use fake logos and websites in correspondence with you. Do not assume that an email is from the IRS just because it contains official looking graphics.
• If you receive what looks to be a mass email purporting to be from the IRS—be suspicious. As a general rule, the IRS does not send mass emails. Moreover, an email from the IRS would not request your important personal and/or financial information such as social security number, PIN numbers, and bank account information.
• Select your tax professionals wisely. Make sure that you work only with a qualified tax preparer. Not only are you, as a taxpayer, legally responsible for the information contained on your return, but each year taxpayers are victimized by phony preparers.
• Trust your gut. If you receive a phone call from someone claiming to work for the IRS and your intuition tells you something seems “off”, end the communication. If you receive an unsolicited email informing you of an IRS error in your favor, the news is probably too good to be true.
Contact the IRS if you think that the phone call or email you received is a scam. You can also visit the irs.gov website for an up-to-date list of recent known scams. You also want to alert the IRS immediately if you believe you have been the victim of a scam.
If you are unclear of your tax-related obligations, you need the advice of an experienced Louisiana tax attorney. Call us today at 504-302-4949 to schedule a free consultation. Attorney Paul A. Grego will carefully assess your particular tax situation and make sure that all of your questions are answered.

IRS Efforts to Help Struggling Taxpayers

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After announcing its “fresh start” program in 2011, the IRS expanded that program in 2012, in an effort to help struggling taxpayers start over with a clean slate as far as their taxes are concerned. The fresh start program helped taxpayers who were burdened with tax liens and outstanding tax bills take care of those issues, which in turn increased their credit scores and helped them purchase homes or vehicles.

The original program in 2011 included: increasing the dollar threshold of lien implementation, making it simpler for taxpayers to obtain a lien withdrawal once a tax bill was paid, withdrawing a lien once the taxpayer entered into an installment agreement, creating easier access to installment agreements for small businesses and expanding Offer in Compromise programs so that more taxpayers could be helped. In 2012, the IRS added such relief as:

  • Penalty relief for unemployed taxpayers. Since penalties are one of the biggest factors a financially distressed taxpayer may face on their tax bill, penalty relief was offered to self-employed individuals who experienced a 25% or larger reduction in business income due to the economy, and taxpayers who were unemployed for at least 30 consecutive days, in 2011 through April 2012. Taxpayers who have an adjusted gross income greater than $200,000 (if married filing jointly), and $100,000 (if single), do not presently qualify for the tax penalty relief.
  • More taxpayers will have the ability to take advantage of IRS installment agreements, in order to catch up on back taxes, as well as more time to pay. The threshold for taking part in an installment agreement has been raised from $25,000 to $50,000, and requires much less financial information. The five-year maximum term has also been raised to six years.
  • A more streamlined Offer in Compromise program allows taxpayers with incomes up to $100,000 to participate. Such compromise offers will generally not be accepted if the IRS has reason to believe the tax liability can be paid in full, either as a lump sum or through a payment agreement.

There are many things taxpayers can do to make dealing with the IRS—and paying their back taxes in a timely manner—simpler. Taxpayers who receive a bill for past due taxes may be better off borrowing the money and paying the taxes in full, if an offer in compromise is not possible. This is because of the interest and penalties which will continue to accrue so long as the taxes are outstanding.

Depending on your particular circumstances, you may be eligible for additional time to pay your tax debt in full by filling out a payment agreement application at www.irs.gov. It could also be wise to pay your debt with a credit card, depending on the interest rate of your card. If you are unable to pay your tax liability in full, then you may be eligible for a payment plan in which you make regular, monthly payments. To take advantage of this installment plan you must file all returns and be current with your estimated tax payments.

Even if you owe more than $25,000, you may still qualify for an installment agreement, however you will be required to complete Form 433F, Collection Information Statement, before the IRS will consider such an agreement. While the IRS may not point this out, you will also pay a one-time user fee once your installment agreement is approved, in the amount of $105. Taxpayers with lower incomes may qualify to have that amount dropped to $43.

For taxpayers with outstanding tax debt, it could be helpful to speak with a knowledgeable Louisiana tax attorney such as Paul A. Grego. There are many issues surrounding tax debt, and it can be overwhelming to try and sort it all out. The Law Office of Paul A. Grego has the experience and the knowledge necessary to help you resolve your tax issues. Call 504-302-4949 today or visit our website for additional information.

Basic Information about Making an Offer in Compromise to the IRS

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While many people who owe substantial amounts in unpaid taxes to the IRS or who have not filed a tax return in years have heard of the strategy of submitting an offer in compromise to the IRS, most taxpayers only have limited knowledge of what an offer in compromise entails.  While in theory the IRS may accept far less than what you owe if your offer in compromise is accepted, there are potential drawback to making an offer in compromise so it is a risky proposition to attempt to undertake this approach to your tax problems without legal advice from an experienced tax attorney.

Louisiana Tax Attorney Paul A. Grego can evaluate your outstanding tax obligation, available assets that the IRS will consider and income so that he can advise you on what type of offer in compromise might be accepted by the IRS.  Mr. Grego also can advise you regarding the potential disadvantages of an offer in compromise that often make it inadvisable to submit such a request unless it is reasonably likely to be accepted.

The IRS will require exhaustive disclosure regarding your sources of income, financial liabilities and assets.  Those who prepare an offer in compromise often are required to provide boxes of financial documents that include bank statements, pay stubs, vehicle title documents and a wealth of other documents.  While the hassle and inconvenience of tracking down and submitting these documents can be a challenge, the bigger issue is that providing all of this information may make it easier for the IRS to use oppressive collection tools against you if the offer is rejected.  Mr. Grego can advise you about the specific risks and likelihood of success in your particular situation.

There are specific procedures that must be met to have a reasonable chance to have the IRS consider your offer in compromise.  Guidelines of the IRS provide that an offer in compromise must be equal to the

“realizable value” of your assets plus the amount that the IRS could collect from future income.  If you plan to offer five payments or less within five months, you must submit a twenty percent payment with your Form 656 and a Collection Information Statement (Form 433-A).  If you live in a state with community property law and you are married, the IRS will also request financial information of your spouse.

If your offer in compromise is rejected, Mr. Grego can still assist you in negotiating a potential settlement.

If you have questions about an offer in compromise, you should contact experienced Louisiana tax attorney Paul A. Grego.  We offer a free initial consultation so that we can answer your questions and provide an initial assessment of your situation.  Call us today at 504-302-4949 or email us.