FAQs

Q?

During the Internal Revenue Service audit the Agent informed me that I was not entitled to any of my expenses because I did not have 100% of receipts or documentation. The Agent sent me a report that I must sign. Can the Agent do this?

A.

Yes, the Agent can refuse to accept these expenses. However, you have the opportunity to have another Agent or an Appeals Officer review your expenses. There are documents that the Internal Revenue Service will give you to sign that could limit your rights. Do not sign any document with the Internal Revenue Service without reading it thoroughly and having a professional review the document.

Q?

The Internal Revenue Service contacted me for an audit but I did not appear. Is there anything that I can do to reduce my liability as I have information I believe will reduce my liability?

A.

Yes, There are ways to have the Internal Revenue Service consider documents and evidence that the Agent was not privy to during the Audit.

Q?

Can I file bankruptcy and discharge/wipe away my payroll tax obligation?

A.

No, If you are deemed to be a responsible officer this tax liability is not dischargeable in bankruptcy.

Q?

The company I worked for had Federal Payroll Tax Debt. I was never an owner of the company, can I be held liable for the Federal Payroll Tax obligation?

A.

Yes, a person can be a responsible officer and liable for Federal Payroll Tax debt even if they are not an owner of the company. However the Internal Revenue Service must make this determination and the Internal Revenue Service must contact you via certified return receipt to give you an opportunity to contest its determination.

Q?

I heard on radio, televisions and internet advertising that you can settle your debt with the Internal Revenue Service for a fraction of what you owe them. Is this true?

A.

The Internal Revenue Service has an offer-in-compromise program that allows individuals and businesses to settle their outstanding tax liability for less than the full amount outstanding. However this process is not simple and it strictly based on a case by case basis. What these advertisements fail to mention is that there is a low acceptance rate and while your offer is pending the Statute of Limitations will be frozen. Thus if your offer is not accepted the Internal Revenue Service will have longer to collect on the outstanding debt. It is extremely important when considering an offer-in-compromise to have a professional make the determination to see whether you qualify for an offer.

Q?

Can the Internal Revenue Service seize my personal residence?

A.

Yes, the Internal Revenue Service can seize your primary residence if you have an outstanding tax liability. The Internal Revenue Service must go through several steps and gives the individual opportunities to prevent this from occurring.

Q?

Will the Internal Revenue Service seize all of my assets if I am the primary earner for my family?

A.

The Internal Revenue Service can seize all of a person’s assets with issuance of a levy. However, an individual (whether he/she has a family or not) has certain expenses that they are allowed under the Internal Revenue Manual. The Internal Revenue Service does not utilize these assets when they levy or attempt to seize. A levy, garnishment or seizure of funds is a measure by which the Internal Revenue Service forces an individual or business to contact them regarding their outstanding tax liability.

Q?

What happens if the Internal Revenue Service sends me a certified return receipt letter and I refuse or do not pick up that certified letter?

A.

It is imperative that whenever you receive a certified letter you sign or pick up that letter from the Post Office. The Internal Revenue Service is required by law to send certain notices by certified return receipt. The law only states that they have to send it to your last known address NOT that you must sign or pick up that piece of mail. Usually the dates of these letters are extremely important and the time frames to assert certain rights are calculated by the date contained in the letter. Thus you should always sign or pick any piece of correspondence from the IRS as quickly as possible.