The IRS Announces Easier Tax Settlements

Recent Tax Settlement Announcements: IRS Commissioner Doug Shulman recently announced that the IRS is loosening it's rules for negotiating Tax Settlements (Offer in Compromise) to allow taxpayers hit by the recession to pay less than they owe.

Why the change? IRS Commissioner Doug Shulman claims that IRS Agents will be more lenient for those who have had a drop or loss of income due to the current economic recession.

The IRS will process over 100 million tax returns this year, and most people who file will quality for Tax Refunds. However, with the loss of more than 8 million jobs since the start of the U.S Economic Recession, many taxpayers will not be able to make payments toward their tax debt.

But is it true? This goes along with what the IRS announced last year. There was talk of a "kinder" and "gentler" IRS all while they ramped up their collection efforts behind the scenes. If the IRS is trying to have more mercy, why do I keep getting hundreds of emails and calls from taxpayer that needs help fighting the IRS?

About Tax Debt Settlements: These new announcements might give people the wrong idea about Tax Debt Settlements. I want to go ahead and rebuke some of the common myths surrounding Tax Debt Settlements, actually known as an IRS Offer in Compromise.

1. First of all, few will quality for "Pennies on the Dollar" settlement amounts proclaimed by shady tax companies and as seen in commercials.

2. Second, it's very hard to qualify for an Offer in Compromise. Only those who truly cannot afford to pay the IRS will qualify to have a Tax Debt Settlement with the IRS.

3. Unemployment alone will not help you qualify to Settle your Tax Debt with an Offer in Compromise. The IRS will evaluate your financial situation, they will predict the amount of money you stand to make when you become employed again.

I'm not convinced by the IRS's sudden announcement that they will make Tax Settlements easier for taxpayers in need. I think they'll continue to do the same thing they always have, fiercely collect no matter what that means to taxpayers.

How To Handle a Sudden IRS Attack

The Last and the Worst: Most people don’t put the IRS at the top of their priority list and here’s why: If you don’t pay your electric bill, they cut off your power. If you don’t pay your car insurance, they terminate the policy. You could go years without hearing anything from the Federal Government. So why worry right? Wrong! The thing that separates the IRS from every other collection agency in the world is that when they come, they come hard!

Round One! So you haven’t filed in the last few years. You’ve probably gotten a couple of letters from the IRS, asking about your debt. Now you find yourself holding a letter that says Final Notice. While this may not seem important at the time, you’d better pay attention! That’s the IRS’ final warning before the onslaught begins. And trust me; you don’t want to be on the receiving end of an IRS attack. Here’s what they will do.

Levy – This tactic involves the IRS putting a federal lien on your bank account and holding all funds. In short, you’re frozen out of your bank account. And if you have direct deposit, you can kiss your paychecks goodbye. The worst part? Neither you nor your bank has any say in the matter.

Lien – A tax lien can be placed on your credit, meaning you can’t do anything that involves credit payment. This can ruin your credit score for the rest of your life! The IRS can also place liens on your house, making it impossible to sell or renovate. Eventually, these liens turn into seizures, and the IRS sells your property in order to pay off the tax debt.

Wage Garnishment – This is my personal favorite, and probably the most effective. The IRS will contact your employer and start taking a percentage of your check in order to pay off the debt. They can legally take out up to 80%, and a good IRS Hitman will take as much as he can.


Here’s What to Do: File your taxes! Even if you owe money, and you have to file an extension, make sure you file. The IRS can put you in jail if you don’t file, and the penalties are up to $50,000 per year not filed. If you know you’re not going to file on time, file for an extension. Contact with the IRS is extremely important. The IRS is not the collection agency to mess with.

Going at it Alone: An IRS debt can be a terrible situation. As an IRS Hitman, I know how brutal they can be. If you’re in a rough spot, and you’re losing hope, contact a tax professional. They have the knowledge and experience needed to get the IRS off your back.

How to Remove Tax Liens from your Credit Report

Tax Liens wreck havoc on your Credit Report. And the bad news is, Tax Liens can remain on your credit report for years after you have already paid off your Tax Debt. Unpaid Tax Liens can remain on your Experian credit report for up to 15 years, and they will remain on Equifax and TransUnion Creidt Reports indefinitely!

When you do finally pay off the Tax Debt, a record of the paid Tax Lien stays on your credit report for seven years! The only way to remove the Tax Liens is after they have expired. Here's a quick guide on how to Remove Expired Tax Liens from your credit report.

The Facts: The Federal Fair Credit Reporting Act allows you to remove credit information that's no longer timely from your credit report. Act on your rights!

1. First, request copies of your credit reports from Equifax, Experian, and TransUnion. The law allows you one free copy of your credit reports annually. Use AnnualCreditReport.com to gather a copy.

2. Review your credit reports, make sure your tax debt was paid seven years ago. If your Tax Liens were paid seven years ago and they have not been removed, you can dispute the negative information with the credit reporting agencies. If the paid Tax Liens are less than seven years, you have to wait for the chance to remove them.

3. If seven years have elapsed, contact all three credit reporting agencies. You can send an email (their email addresses are on their websites) or you can send letters. Be sure to keep the emails and letters from your records. Make yourself copies and send your letter to the consumer reporting agency by certified mail, return receipt requested.

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
(800) 685-1111

Experian
P.O. Box 2104
Allen, TX 75013
(888) 397-3742

TransUnion
P.O. Box 1000
Chester, PA 19022
(800) 916-8800

4. Whether you write a letter or send an email, have copies of supporting documentation included, like documents that prove when the lien was paid.

5. Wait 30 days for a response from the Credit Reporting Agency. They should reply with a copy of your Credit Report that reflects the new changes.

Don't let Tax Liens remain on your credit report forever. If seven years have passed since you paid your tax debt in full, get it removed.

Real Ways to Stop a Tax Levy

Getting This Far: You were warned. The IRS sent you notice after notice, which were promptly ignored. Then the “Final Notice and Intent to Levy” arrived. It's certified mail, and it looks serious. And it is. The IRS can seize your assets or garnish your paycheck if you don't act fast.

Can you Stop a Tax Levy? Absolutely! But don't be taken in by all the myths are rumors about stopping or avoiding IRS Tax Levies or Asset Seizures. It's a lot harder than it looks.

Myth 1: To keep the IRS from levying your assets, just transfer the ownership!

Not so fast. If you already received that Final Notice, the IRS is keeping a close eye on you and your assets. If you transfer your assets to a friend, coworker, family members, the IRS can follow your paper trail, seize the asset, AND try to levy their assets, too!

Myth 2: You can lie to the IRS about your assets, they will never find out.

The IRS can and will find out. You don't have to answer their questions, but it's a violation of Federal law to lie to the IRS about your assets. Additionally, the IRS can search public records to find out what you really own.

Myth 3: File For Bankruptcy and the IRS can't touch you!

Bankruptcy is a terrible tool for combating Tax Debt. Depending on which chapter you file, you assets could be liquidated to satisfy the debt! Isn't that what you were trying to prevent in the first place? Here's some additional reasons to avoid Bankruptcy for resolving Tax Debt:

-The Tax Lien remains
-The Statute of Limitations on your Tax Debt is extended
-Interest and Penalties continue to accure behind the scenes< So 5 years after your Chapter 13, your Tax Debt could be waiting for you, bigger and badder than ever!  

The Real Deal: There's only one way to stop an IRS Levy. And that's working with the IRS to pay the debt. You can submit an Offer in Compromise, propose an installment agreement, or request a hardship plan. None of this will be easy, but they are the only real options for stopping a levy. Act fast, you don't want the IRS to seize your assets or wages.

The Truth about Tax Liens

Tax Liens are devastating, so why would the IRS continue to impose them? The answer is simple; the IRS will continue to impose Tax Liens because they work. As long as Liens are being filed, taxpayers will be strained into paying their Tax Debt!

Ruined Credit
Once a Lien is filed your credit rating will be harmed and it will be nearly impossible to buy a house, buy a car, get a new credit card, or even sign a lease. Consequently, it is very important to work to resolve your Tax Debt before a Lien is filed against you.

Tax Liens Defined
Basically, Tax Liens give the IRS legal claim to your property as security or payment for your Tax Debt. When the IRS files notice of the Tax Lien, creditors are publicly notified that the IRS has a legal claim against your property. This includes:

• Property acquired after the Tax Lien is filed
• Accounts receivable
• House, Car, or Real Estate

Releasing a Tax Lien
There are several options for releasing a Tax Lien. Unless you are paying your Tax Debt in full, it will be hard to remove the Tax Lien without professional help.

Options for Releasing a Tax Lien:

• Payment in full: The Lien will be removed when the Tax Debt is paid in full.

• Withdrawing Liens: You can file to have your Lien withdrawn if Notice was filed too soon, you enter an Installment Agreement with the IRS, or if withdrawing the Lien will speed up collection of the Tax Debt.

It’s a good idea to consult a professional to see which option would be best suited to your case with the IRS.

Statute of Limitations, the Ten Year Rule

Usually, Tax Liens are automatically released ten years after the Tax Debt is accessed. If you feel that the IRS has negligently failed to release a Lien and that the Statuary period has passed, you should consider working with an attorney to have the Lien removed. You can even sue the Federal Government for damages incurred by the Lien.