2014 IRS Fresh Start Initiative for Back Taxes and Tax Resolution Radio and TV ads

2014 IRS Fresh Start Initiative for Back Taxes and Tax Resolution Radio and TV ads

2014 IRS Fresh Start Initiative

irs back tax help initially discussed the IRS Fresh Start Initiative back in 2012.  The purpose of the program was to expand the options available to pay back overdue taxes.  Lately, there has been a resurgence of radio ads and marketing revolving around the IRS’ program to solve back tax problems.

This is an update on the Fresh Start Initiative if you past due taxes discussion for 2014.

• If you know you need to take action, read my article “IF” you should hire IRS back tax help.  (You may not need to at all.) Titled “Owe IRS back taxes? When, who, and how do I hire IRS back tax help?” before you do anything else.

As usual, If you like the tone of this writing, I would like to refer you to someone who meets irs back tax help criteria.  Please contact irs back tax help for a referral.  Before you email me, please read “About irs back tax help.”

First, here’s the latest update from the IRS 2014 Fresh Start Initiative.  (Updated as of April 10th, 2014)

The federal fresh start initiative for past due taxes affect 3 specific areas:

1.  The threshold for filing of federal tax liens (IRS Form 668y).  The IRS will only file tax liens on amounts over $10,000, but reserves the right to file on smaller amounts if they feel it will aid in the IRS collection process for past due taxes.

2.  IRS Installment Agreements.  You can set up your own  IRS pay plan online if you owe personal income taxes (less than $50,000) and if you owe back 941 payroll taxes (less than $25,000.)

3.  IRS Offer in Compromise (IRS Form 656).  Changes include revised calculations for future income, allowing delinquent taxpayers to pay their student loans, allowing people with IRS tax debt to pay state and local delinquent taxes, and expanding the Allowable Living Expenses allowance category and amount if taxes are owed.  There is also an IRS Offer in Compromise Pre-Qualifier Tool that you can use to see if a tax resolution company is advising the right course of action.

No individual tax resolution company has a special angle on resolving tax problems.  On the other hand, anyone who advertised back tax solutions on TV or radio is spending a tremendous amount of money to place those ads about the IRS Fresh Start Initiative for taxes owed.  A large advertising budget can place stress on a company to take on tax problems or propose a back tax resolution plan that is not in the best interest of the delinquent taxpayer or the IRS.

Overall, there hasn’t been a great deal of change in 2014 to the IRS Fresh Start Initiative.  There have been minor changes for the better.  It seemed worthwhile to discuss the back tax solution programs again since tax resolution company marketing efforts have started to pop back up touting “new” back tax fixes.  The goal of this discussion is to give you a framework for evaluating both the IRS actions in regard to collecting back taxes, and the marketing efforts of a back tax help company.

Can you really abate (remove) IRS penalty? And other IRS Collection Stats

IRS Delinquent Collection Activities for 2011

This is a review of IRS collection actions for 2011.  This includes Offers in Compromise accepted, Filed Federal tax lien, notices of levy served on third parties, IRS seizures, and IRS penalty abated/removed.  If you have questions about this review, please reference:  bp105.

• If you know you need to take action, read my article “IF” you should hire IRS back tax help.  (You should not automatically.) Titled “Owe IRS back taxes? When, who, and how do I hire IRS back tax help?” before you do anything else.

As usual, If you like the tone of this writing, I would like to refer you to someone who meets irs back tax help criteria.  Please contact irs back tax help.  Before you email me, please click on and read “About irs back tax help.”

Interesting stats for 2011 and somewhat contradictory.  IRS acceptance of Offers in Compromise have jumped dramatically.  Is it due to IRS leniency, or because the main offenders of frivolous offer in compromise filers are out of business?  Ronni Lynn Deutch is out of business, J.K. Harris is out of business, and TaxMasters is in bankruptcy. 

Source:  IRS Back Tax Collections, Offer in Compromise, Federal Tax Liens, IRS Levy, IRS Seizures

IRS Offer in Compromise Accepted and Rejected

There has been a large jump in the percentage of accepted Offers in Compromise with no stated equally dramatic change in policy.  By comparison in 2010, only 24% of all offers were accepted. 

Offers in compromise (thousands) [5]:	2011	% Accepted
Number of offers received	59
Number of offers accepted	20
Amount of offers accepted	154,092	34%

IRS Tax Liens, Levy, & IRS Seizure Stats 

IRS Seizures are the real concern here.  IRS tax liens and IRS levies stayed relatively level. 

Enforcement activity:	2010	2011	% Change
Number of notices of Federal tax liens filed [6]	1,096,376	1,042,230	-5%
Number of notices of levy served on third parties	3,606,818	3,748,884	+4%
Number of seizures	605	776	+22%

 IRS Civil Penalty Abatement Statistics, Yes, it does really happen

Everyone always asks.  Can you really Abate IRS Penalty?  Yes.  The IRS admits it officially.  Roughly one-third of all penalty is abated.  It is important to fight IRS penalty.  46% of all civil penalty is abated for employment taxes.  If your Revenue Officer isn’t working with you on IRS penalty, they should be. 

Table 17.  Civil Penalties Assessed and Abated, by Type of Tax and Type of Penalty, Fiscal Year 2011 [1]
[Money amounts are in thousands of dollars]
Type of tax and type of penalty	Civil penalties assessed		Civil penalties abated [2]
	Number	Amount	Number	Amount
	(1)	(2)	(3)	(4)
Civil penalties, total	38,646,963	30,921,558	4,871,988	11,008,638	36%
Individual income tax:
Civil penalties, total [3]	28,749,882	15,580,904	3,067,370	5,241,771	34%
Accuracy [4]	500,472	1,112,671	51,461	252,004
Bad check	296,559	24,795	11,959	5,088
Delinquency	3,736,987	6,344,147	790,190	2,718,565
Estimated tax	7,366,907	1,569,824	263,442	450,376
Failure to pay	16,841,952	6,291,624	1,944,535	1,697,104
Fraud	2,391	186,116	167	107,263
Other [5]	4,614	51,727	5,616	11,371
Business income tax:
Civil penalties, total	1,080,027	1,496,418	250,325	611,457	41%
Accuracy [4, 6]	4,204	191,564	d	d
Bad check [6]	4,679	14,551	210	250
Delinquency [6]	594,265	651,050	170,685	295,428
Estimated tax [6]	198,697	203,923	8,465	99,486
Failure to pay [6]	259,245	304,238	64,793	149,844
Fraud [6]	192	9,383	d	d
S corporation/partnership information [7]	18,662	117,262	1,758	10,547
Other [6]	83	4,447	4,318	38,618
Employment taxes:
Civil penalties, total [8]	7,745,830	5,298,944	1,364,041	2,424,513	46%
Accuracy [4]	2,590	13,638	238	962
Bad check	192,135	25,154	3,610	2,632
Delinquency	1,669,240	1,340,470	291,429	655,989
Estimated tax	3,595	14,182	648	10,878
Failure to pay	4,162,673	1,100,324	673,166	383,485
Federal tax deposits	1,715,095	2,795,325	394,938	1,370,523
Fraud	256	3,404	12	44
Other	246	6,447	0	0

Not happy with IRS back tax results?  

If you feel like you are on the wrong side of all these statistics, it is probably worth seeking a second opinion.  If you would like irs back tax help to be your first or second opinion, I can be reached at irsbacktaxhelp@gmail.com.  I do not pressure people in an already stressful situation.

Regards,

irs back tax help

 

How do I get a Streamlined Offer in Compromise Program (IRS Form 656)

All IRS Back Tax Help comments are in blue.  This post is about the streamlined version of the IRS Offer in Compromise.  (IRS Form 656)  

If you know you need to take action, read my thread about whether or not you should hire someone (You shouldn’t automatically) titled “How do I hire IRS back tax help?”  Here’s the link:

https://irsbacktaxhelp.wordpress.com/2011/10/31/i-owe-the-irs-back-taxes-how-do-i-hire-irs-back-tax-help/

As usual,  If you like the tone of these posts, contact me for consultation.  I can be reached at irsbacktaxhelp@gmail.com.  Before you email me, please click on and read “About IRS BACK TAX HELP”.

Here is the link to irs.gov:

http://www.irs.gov/businesses/small/article/0,,id=239097,00.html

Here are the new guidelines for the Streamlined Offer in Compromise program:

• Fewer requests for additional financial information  This is a big improvement.  Many IRS Offers in Compromise are rejected not because they weren’t valid, but because the deadlines were missed or people gave up.  Once you have submitted your IRS Form 656, you need to commit to all their admin requirements.  
• If necessary, requests for additional information by phone, not by mail
• Greater flexibility when considering your ability to pay  Three ways:  20% down with lump sum, 20% down with payments over 2 years, or a five-year installment agreement for the amount of the offer with the monthly amount  submitted with the IRS Form 656.  

You can be:  

• Wage earners
• The unemployed
• Self-Employed taxpayers with no employees and gross receipts under $500,000

and,

• Your total household income is $100,000 or less, and
• The amount you owe is less than $50,000 when your offer is filed

References/Related Topics

• Offer in Compromise

This also assumes you have filed all of your over due taxes.  You must have those filings complete prior to submitting an Offer in Compromise.  If Substitutes for Returns have been filed for you by the IRS, that is acceptable to them.  Typically, in our industry the minimum fee to do an IRS Offer in Compromise is $2,500.  If it makes more sense for you spend your time and effort, pursue this on your own.  If you don’t have the time, hire someone (us) to do this work for you.  If you don’t address it, it will get worse.