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IRS COLLECTIONS LAWYERS
IRS collections is a term taxpayers dread to hear. It means that you owe the IRS money and it’s time to pay up. For taxpayers who have plenty of money to live on, this might not be such a big deal. For those taxpayers who are going to need more time to pay their taxes, things become complicated in a hurry. Tax problems don’t go away overnight. For some people, they can drag on for months or even years before they’re resolved. Obtaining a good IRS collections lawyer will give you the ability to understand the collection actions taken against you and how to resolve them in a way that is both legal and less time consuming.
Both individuals and businesses have a very good reason to get a lawyer when they have outstanding tax debt that they are unable to pay right away. The IRS can take many actions actions against your property and wages if you fail to repay them for outstanding tax debt. What a good lawyer will do for you is make sure that the payment plan you work out or the collections actions taken against you will be taken where it will hurt your finances the least. No one wants to realize that they’ve had their wages garnished when they could ill afford to do so. A simple payment plan might have prevented the IRS from taking that action. So it’s important to contact a lawyer about any collections notifications you receive from the IRS so that you can take care of them in your own way, without hurting your finances in the meantime.
Good legal offices typically have experts on IRS tax law. They may even have former IRS agents who are familiar with the laws that govern collections. These experts will immediately know if the IRS is violating any of its agreements OR if there is a way to extend tax payments before collections actions are taken. High dollar delinquencies especially call for an experienced IRS tax lawyer that has handled these types of cases before.
The good news is that if you have outstanding debt owed to the IRS, your lawyers have a large amount of options to choose from before they resolve your case. They will discuss the specifics with you and go over all of your options for delaying payment. Perhaps the most attractive is installment payments which don’t take anything directly out of your paycheck but leave it up to you to pay the installment payments on time. This allows you to negotiate further down the road in case your financial situation changes. Secondly, your lawyers can make offers in compromise to the IRS which they often accept. This means you’ll end up settling your debt for a lump sum payment that won’t even require payments. This is preferable for those who can’t quite afford to pay the full amount but can get close.
Your lawyer will be well-versed in specific scenarios as well, such as when a husband or wife is in deep tax debt because of a spouse that ran up a criminal debt or negligently avoided paying taxes (ex-spouse only). Sometimes you can get your amount reduced or even forgiven completely if you’re lucky and if the lawyer you hire is particularly good at what he does. If you don’t use one or more of these techniques to resolve the debt, it’s likely that the IRS will directly take funds from you. This includes liens on homes, cars, and property, plus possible wage garnishment now and in the future. This is a prospect that no legal client wants to face and with a good lawyer on your side, you won’t have to face it at all.
It’s easy to get overwhelmed over tax collection efforts by the IRS. You’re not the first person to go through this and you certainly won’t be the last. With the aid of a good lawyer, you’re going to successfully resolve this conflict. While technically you can resolve some of these scenarios yourself, if you’re dealing with a larger debt than you can play, it’s wise to get a lawyer and let them handle your case before things get out of hand.
Should I Consult an Attorney If I Am Accused of Tax Fraud
Tax fraud is a serious charge that can carry substantial penalties. If the Internal Revenue Service (IRS) is accusing you of tax fraud, the smartest thing you can do for yourself is consult with a skilled attorney. An attorney can look over the charges against you, help you put together a defense to either get the charges dismissed or lessened, and represent you during the case.
For more on how tax fraud works, potential penalties and why you need an attorney, read on for a full guide.
What Constitutes Tax Fraud?
Mistakes on a tax return can be separated into two basic categories, which are tax fraud and negligence.
When the IRS accuses you of tax fraud, it’s charging you with intentionally taking illegal action to avoid paying taxes that you either did owe or thought you owed at the time.
Negligence, on the other hand, means that you made one or more mistakes on your taxes, but they were unintentional and you weren’t trying to lower your tax obligation. They’re what most people would call an honest mistake.
Here are some examples of actions that could be considered tax fraud:
• Reporting your income as lower than it actually was or neglecting to report income from certain clients.
• Making up false deductions.
• Deducting more than you should.
These are just a few of the many ways a person could commit tax fraud. One thing you may have noticed about the above actions is that depending on the circumstances and the evidence available, they could be considered tax fraud or negligence.
You could have intentionally underreported your income, or it could have been an unintentional math error. The same is true with deductions. And you could have made up a false deduction, or you could have thought you qualified for a deduction without verifying it.
The line between tax fraud and negligence isn’t always easy to determine, and that’s one reason an attorney is so important. Your attorney can argue that any mistakes made were simple negligence and not willful tax fraud. That can make a huge difference in the penalties you face.
Penalties of Tax Fraud and Negligence
You’re looking at a much larger penalty if you end up convicted of tax fraud than if you’re found guilty of negligence.
With negligence, you’ll need to pay whatever taxes you failed to pay because of your mistakes in your tax return, plus a civil penalty for 20 percent of the amount that you underpaid your taxes.
Although that can be expensive, it pales in comparison to the penalty for tax fraud. Again, you need to pay whatever taxes you failed to pay the first time around, plus a civil penalty that is typically for 75 percent of the amount that you underpaid your taxes. This isn’t always the case, though, and the penalty can be up to $250,000 for individuals and $500,000 for corporations.
The IRS usually focuses on civil penalties, because there’s a lower burden of proof required for these and building a case won’t require as much in the way of resources. However, there can also be criminal penalties involved. If your tax fraud becomes a criminal case, the maximum penalty is five years in prison.
Start Setting Up Your Defense Immediately
Many tax return inaccuracies slip through the cracks because of limited IRS resources, but when the IRS does charge someone with tax fraud, it puts a considerable amount of resources towards that case. Trying to defend yourself in this situation is often a big mistake. Remember that the difference between tax fraud and negligence can be tens of thousands or more in civil penalties, along with a prison term.
For accusations of tax fraud, you need to be proactive in preparing your defense, and that all starts when you consult with an experienced attorney. Your attorney can look for evidence that shows you didn’t commit tax fraud, and help you prove to the IRS that any mistakes or inaccuracies were the result of simple negligence. If there weren’t any mistakes in your tax return, your attorney can help you demonstrate that and, with any luck, get the charges dropped.