After July 15, 2020, Taxpayers Must Resume Making Payments To IRS Or Face Renewed Collection Action

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After July 15, 2020, Taxpayers Must Resume Making Payments To IRS Or Face Renewed Collection Action

On March 25, 2020 the IRS issued a press release  announcing a sweeping series of steps to assist taxpayers by providing relief on a variety of issues ranging from easing payment guidelines to postponing compliance actions in what it calls “The IRS People First Initiative”.

These new changes include issues ranging from postponing certain payments related to Installment Agreements and Offers in Compromise to collection and limiting certain enforcement actions. The IRS temporarily modified its activities from April 1, 2020 through July 15, 2020. During this period, to the maximum extent possible, the IRS avoided in-person contacts.

Taxpayers who took advantage of The IRS People First Initiative tax relief and did not make previously owed tax payments between March 25, 2020 to July 15, 2020 need to restart their payments or face renew collection action by the IRS.

As the IRS continues to reopen its operations across the country, taxpayers who were in payment agreements and skipped any payments from March 25, 2020 to July 15, 2020 should start paying again to avoid penalties and possible default on their agreements.

Here’s what taxpayers should do to resume their payment agreements to the IRS, including Installment Agreements, Offers in Compromise, and Private Debt Collection program payments:

Installment Agreements

Taxpayers who suspended their installment agreement payments between April 1, 2020 and July 15, 2020, will need to resume their payments by their first monthly payment due date after July 15, 2020. Taxpayers should be aware that the IRS didn’t default their agreement, but interest did accrue, and the balance remained.

Taxpayers who had their bank suspend direct debit payments should contact the bank immediately to ensure their first monthly payment due date occurring on or after July 15, 2020 is sent to avoid penalties.

If a taxpayer can’t meet their current installment agreement terms due to a COVID related hardship, it is possible to have your agreement modified.  An experienced tax professional can see if relief is available for you.

Offer in Compromise

Pending Offers: If the IRS is currently reviewing a taxpayer’s submitted offer but hasn’t accepted it yet, the taxpayer should resume their required payments starting July 15, 2020. The IRS will amend the taxpayer’s offer to allow them to pay any skipped payments at the end of the offer period, if the offer is accepted.

Already Accepted Offers: If a taxpayer has an Offer in Compromise agreement, and the taxpayer was unable to make the payments on their accepted offer because of a COVID-19 hardship, the taxpayer should resume payments and make up the missed payments by July 15, 2020. If the taxpayer is unable to make up the missed payments, an experienced tax professional can see if relief is available for you.

Private Debt Collection

The IRS did not forward new delinquent accounts to Private Collection Agencies (PCAs) from April 1, 2020 through July 15, 2020, and PCA interaction with taxpayers was limited to inbound telephone calls unless requested by a taxpayer in a voicemail or correspondence.

Taxpayers who had their PCA payments on hold should resume payments by July 15, 2020. If a taxpayer can’t meet their current payment agreement terms due to a COVID related hardship, it is possible to have your agreement modified.  An experienced tax professional can see if relief is available for you.

Taxpayers Who Owe But Can’t Pay

Taxpayers who are experiencing a hardship or who have questions about their payments may still be able to get additional relief.  An experienced tax professional can see if relief is available for you.

An Opportunity For Taxpayers Who Owe The IRS

Do not think that if you owe the IRS your tax problem will disappear because of the measures being considered by the government. Instead you should be utilizing this valuable time to get yourself prepared so that when activity in this nation regains momentum, you are ready to make the best offer or proposal to take control of your outstanding tax debts.

As a prerequisite to any proposal to the IRS, you must be in current compliance. That means if you have any outstanding income tax returns, they must be completed and submitted to IRS.

Also, if you are required to make estimated tax payments, you must be current in making those payments. Fortunately, as we are now in 2020, taxpayers who expect to owe for 2019 should have their 2019 income tax returns done now so that the 2019 liability can be rolled over into any proposal and the requirement to make estimated tax payments will now start for 2020.

Remember that COVID-19 does not alter the tax laws, so all taxpayers should continue to meet their tax obligations as normal. Individuals and businesses should keep filing their tax returns and making payments and deposits with the IRS, as they are required to do.

Also, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations. In instances where statute expirations might be jeopardized during this period and a taxpayer is not agreeing to extend such, the IRS will issue Notices of Deficiency and pursue other similar actions to protect the interests of the government in preserving such statute.

The take away from this – use the Federal government’s downtime and continued uncertainty with COVID-19 to your advantage to prepare for the future.

What Should You Do?

You know that at the Law Offices Of Jeffrey B. Kahn, P.C. we are always thinking of ways that our clients can save on taxes. If you are selected for an audit, stand up to the IRS by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), Los Angeles (including Long Beach and Ontario) and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income. Also if you are involved in cannabis, check out what a cannabis tax attorney can do for you.  And if you are involved in crypto currency, check out what a bitcoin tax attorney can do for you.

IRS Strikes Out Darryl Strawberry For Outstanding Tax Debt

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IRS to auction Darryl Strawberry’s deferred Mets salary. A minimum bid of $550,000 has been set for the January 20, 2014 auction which will offer a deferred compensation agreement that was part of Strawberry’s 1985-90 contract with the Mets.

Darryl Strawberry, the former MLB All-Star, New York Mets and New York Yankees star who has faced tax problems owes over $550,000 when totaling California state and IRS back taxes. Strawberry was well known as a home-run hitter with a large presence in the batters box.

Strawberry is well known for leading the Mets to a World Series win in 1986 and the Yankees to championships in 1996, 1998 and 1999. But when it came to the IRS – it was three strikes and he’s out!

In 1995, The New York Times reported that Strawberry owed over $100,000 in back income taxes (for underreported income of $411,250 between 1986 and 1990), and just recently The Detroit News reported that he owes over $550,000 in back taxes. The breakdown according to The Detroit News is as follows: He owes over $259,000 to the State of California (as a tax lien was filed in April), over $250,000 to the IRS (IRS tax lien filed in December 2008).

In November 2004, after being served with an IRS levy,  the New York Mets began sending the IRS almost all of the $8,892 in monthly deferred compensation Strawberry is owed under the Uniform Player’s Contract, to cover both his back taxes and current income tax withholding.

But this was still not enough for the IRS – you see one way or the other, the IRS seems likely to get all its money.

The Internal Revenue Service is now auctioning the deferred compensation agreement that was part of Darryl Strawberry’s 1985-90 contract with the New York Mets to satisfy taxes owed by the former All-Star outfielder to satisfy IRS tax liens for 1989, 1990, 2003 and 2004.

The IRS said the agreement is worth about $1,279,000. The minimum bid is $550,000 in the auction which is scheduled for January 20, 2014 at the IRS office in Fairview Heights, Illinois. But if you are looking to bid, include a payment of 20% of the minimum and be prepared to pay the remainder within 60 days of the bid’s acceptance.

When Would The IRS Or State Tax Agency File A Tax Lien?

The IRS or a State Tax Agency will file a lien when the agency feels there is a chance that collection is in peril. It does not just grab your assets. Filing of a tax lien is normally dictated by the dollar amount. For IRS under the IRS’s Fresh Start program, the lien threshold was increased from $5,000 to $10,000.

The Notice of Federal or State Tax Lien is filed in the public records office of each county where you own property and thus attaches to any property you own. If you sell the property, proceeds will be used to satisfy the lien. Any person or company pulling a credit report on you will see the tax lien. This will damage your borrowing ability, making it difficult to refinance your home, get an auto loan, credit card, or business loan. Also, if you are looking to refinance your loan, the lien would have to be satisfied at closing in order for the lender in the new loan to retain a senior creditor’s position.

Alternatively, a new lender should be willing to make the new loan where the IRS and State Tax Agency agrees to subordinate its lien. A taxpayer can request that the IRS and State Tax Agency subordinate their liens to the new lender. In the process, even though the tax lien would be older than the new loan, the IRS and State Tax Agency agree to stand behind the new lender should the loan be defaulted and the new lender now seeks to foreclose on the property.

Federal Tax Liens Do Not Necessarily Have To Remain In Place While You Are Under A Payment Plan.

It is true that certain taxpayers who enter into payment plans with the IRS can get tax liens withdrawn even before the liability is paid in full. You must enter into a Direct Debit installment agreement and also meet the following to request that the Federal Tax Lien be withdrawn:

  1. The current amount you owe must be $50,000 or less;
  2. If you owe more than $50,000, you may pay down the balance to $50,000 prior to requesting the lien withdrawal to be eligible;
  3. Your Direct Debit Installment Agreement must full pay the amount you owe within 60 months or before the Collection Statute expires, whichever is earlier;
  4. You must be in full compliance with other filing and payment requirements;
  5. You must have made three consecutive direct debit payments;
  6. You cannot have previously received a lien withdrawal for the same taxes unless the withdrawal was for an improper filing of the lien; and
  7. You cannot have defaulted on your current, or any previous, direct debit installment agreement.

An existing installment agreement not structured as a Direct Debit Installment Agreement can be converted so that you can now qualify for this relief for lien withdrawal. Bear in mind that if you default on your Direct Debit Installment Agreement after the lien is withdrawn, a new notice of lien may be filed and collection efforts may resume.

Don’t Let The IRS Strike You Out And You Lose Everything You Have Worked For!

Protect yourself. If you are in danger of wage garnishments or bank levies or having a tax lien placed against your property, stand up to the IRS and your State Tax Agency by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego, San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

Whether They Are Old Taxes Or New Taxes, The IRS Is Still Looking To Collect From Sharpton.

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The Rev. Al Sharpton lately has come into prominence as an imposing figure as men in power lined up to exclaim their admiration for him. Mayor Bill de Blasio and Gov. Andrew M. Cuomo hailed him as a civil rights icon. President Obama sent an aide to read a message commending Mr. Sharpton’s “dedication to the righteous cause of perfecting our union”.

But despite this rise in power Mr. Sharpton has apparently sidestepped the inevitable obligations to pay taxes as public records show more than $4.5 million in current state and federal tax liens against him and his for-profit businesses.

During a news conference at the headquarters of his National Action Network in Harlem, in November 2014, Mr. Sharpton sought to refute the assertion by an article in the New York Times that there were $4.5 million in state and federal tax liens outstanding against him and the for-profit businesses he controls. He said that the liens had been paid down, although he declined to say by how much, and that he was “current on all taxes” he was obligated to pay under settlement agreements with tax authorities.

“We’re talking about old taxes,” he said, adding: “We’re not talking about anything new. So all of this, as if I’m not paying taxes while I’m doing whatever I’m doing, it reads all right, but it just is not true.”

State and federal tax records show, however, that the liens against Mr. Sharpton and his businesses remain active, meaning they have not been completely paid off. But that could change soon, thanks to the more than $1 million raised at his birthday party last month.

When would the IRS or State Tax Agency file a Tax Lien?

The IRS or a State Tax Agency will file a lien when the agency feels there is a chance that collection is in peril. It does not just grab your assets. Filing of a tax lien is normally dictated by the dollar amount. For IRS under the IRS’s Fresh Start program, the lien threshold was increased from $5,000 to $10,000.

The Notice of Federal or State Tax Lien is filed in the public records office of each county where you own property and thus attaches to any property you own. If you sell the property, proceeds will be used to satisfy the lien. Any person or company pulling a credit report on you will see the tax lien. This will damage your borrowing ability, making it difficult to refinance your home, get an auto loan, credit card, or business loan. Also, if you are looking to refinance your loan, the lien would have to be satisfied at closing in order for the lender in the new loan to retain a senior creditor’s position.

Alternatively, a new lender should be willing to make the new loan where the IRS and State Tax Agency agrees to subordinate its lien. A taxpayer can request that the IRS and State Tax Agency subordinate their liens to the new lender. In the process, even though the tax lien would be older than the new loan, the IRS and State Tax Agency agree to stand behind the new lender should the loan be defaulted and the new lender now seeks to foreclose on the property.

Federal Tax Liens Do not Necessarily Have To Remain In Place While You Are Under A Payment Plan.

It is true that certain taxpayers who enter into payment plans with the IRS can get tax liens withdrawn even before the liability is paid in full. You must enter into a Direct Debit installment agreement and also meet the following to request that the Federal Tax Lien be withdrawn:

  1. The current amount you owe must be $50,000 or less;
  2. If you owe more than $50,000, you may pay down the balance to $50,000 prior to requesting the lien withdrawal to be eligible;
  3. Your Direct Debit Installment Agreement must full pay the amount you owe within 60 months or before the Collection Statute expires, whichever is earlier;
  4. You must be in full compliance with other filing and payment requirements;
  5. You must have made three consecutive direct debit payments;
  6. You cannot have previously received a lien withdrawal for the same taxes unless the withdrawal was for an improper filing of the lien; and
  7. You cannot have defaulted on your current, or any previous, direct debit installment agreement.

An existing installment agreement not structured as a Direct Debit Installment Agreement can be converted so that you can now qualify for this relief for lien withdrawal. Bear in mind that if you default on your Direct Debit Installment Agreement after the lien is withdrawn, a new notice of lien may be filed and collection efforts may resume.

Don’t Take The Chance And Lose Everything You Have Worked For.

Protect yourself. If you are in danger of wage garnishments or bank levies or having a tax lien placed against your property, stand up to the IRS and your State Tax Agency by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

The Power Of The Federal Tax Lien.

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A lot of people get confused between Tax Liens and Tax Levies – let us break this down for you.

A lien is not a levy. A lien secures the government’s interest in your property when you don’t pay your tax debt. A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS can levy, seize and sell any type of real or personal property that you own or have an interest in.

When would the IRS file a Federal Tax Lien?

The IRS will file a lien when the agency feels there is a chance that collection is in peril. It does not just grab your assets. Filing of a tax lien is normally dictated by the dollar amount; the IRS’s Fresh Start program has increased the lien threshold from $5,000 to $10,000.

The Notice of Federal Tax Lien is filed in the public records office of each county where you own property and thus attaches to any property you own. If you sell the property, proceeds will be used to satisfy the lien. Any person or company pulling a credit report on you will see the tax lien. This will damage your borrowing ability, making it difficult to refinance your home, get an auto loan, credit card, or business loan. Also, if you are looking to refinance your loan, the lien would have to be satisfied at closing in order for the lender in the new loan to retain a senior creditor’s position.

Alternatively, a new lender should be willing to make the new loan where the IRS agrees to subordinate its lien. A taxpayer can request that the IRS subordinate their lien to the new lender. In the process, even though the tax lien would be older than the new loan, the IRS agrees to stand behind the new lender should the loan be defaulted and the new lender now seeks to foreclose on the property.

Federal Tax Liens Do not Necessarily Have To Remain In Place While You Are Under A Payment Plan.

It is true that certain taxpayers who enter into payment plans with the IRS can get tax liens withdrawn even before the liability is paid in full. You must enter into a Direct Debit installment agreement and also meet the following to request that the Federal Tax Lien be withdrawn:

  1. The current amount you owe must be $50,000 or less;
  2. If you owe more than $50,000, you may pay down the balance to $50,000 prior to requesting the lien withdrawal to be eligible;
  3. Your Direct Debit Installment Agreement must full pay the amount you owe within 60 months or before the Collection Statute expires, whichever is earlier;
  4. You must be in full compliance with other filing and payment requirements;
  5. You must have made three consecutive direct debit payments;
  6. You cannot have previously received a lien withdrawal for the same taxes unless the withdrawal was for an improper filing of the lien; and
  7. You cannot have defaulted on your current, or any previous, direct debit installment agreement.

An existing installment agreement not structured as a Direct Debit Installment Agreement can be converted so that you can now qualify for this relief for lien withdrawal. Bear in mind that if you default on your Direct Debit Installment Agreement after the lien is withdrawn, a new notice of lien may be filed and collection efforts may resume.

Don’t Take The Chance And Lose Everything You Have Worked For.

Protect yourself. If you are in danger of wage garnishments or bank levies or having a tax lien placed against your property, stand up to the IRS by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.

Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.

The Importance of Avoiding Tax Liens

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If you have recently received notice that there is a tax lien against your home, you need to quickly contact a tax lawyer for IRS tax help. Receiving official notice from the IRS about a tax lien against your home means that the government has placed a legal claim against your home as a form of leverage to attempt to secure its interest in your assets to satisfy past tax debts. While this doesn’t mean that the IRS is going to take over your home and evict you, it does have some potentially negative consequences.

With the current housing market, tax attorneys in California often have to deal with helping homeowners get a tax lien removed so they can sell or refinance their home. The easiest resolution of this problem is where the proceeds of the sale or refinancing can fully satisfy the lien at closing.  If this isn’t possible for financial reasons, an experienced tax attorney at the Law Offices Of Jeffrey B. Kahn, P.C. can request the IRS to release or subordinate the lien to allow the transaction to proceed if it can be shown that the IRS would be in no worse position by allowing the sale or refinancing to go through.

Once a tax lien is filed, it will stay on your credit history for seven years.  However, the Law Offices Of Jeffrey B. Kahn, P.C. can help you negotiate a resolution through the IRS Fresh Start Program which offers a one-time way to get this mark removed from your credit.

If you are in danger of having a tax lien placed against your property, it’s urgent that you speak with an income tax attorney. The experienced tax attorneys in the Law Offices Of Jeffrey B. Kahn, P.C. know how to keep this from happening.