IRS Collections and Tax Settlements
Baltimore Tax Attorneys help Maryland and Washington D.C. area residents facing IRS collections reach tax settlements.
The IRS has extensive authority and tools to collect outstanding federal tax liabilities. These include the right to issue a notice and demand for payment, file a Notice of Federal Tax Lien, (thereby creating a public record of the liability and damaging a taxpayer’s credit rating), levy financial accounts, garnish wages, seize accounts receivables and assets, foreclose real property, offset refunds and federal benefits, and contact third parties.
It is crucial in these circumstances to know and understand your rights and responsibilities as a taxpayer, including any defenses available under federal law. For example, IRS collection efforts should not jeopardize a taxpayer’s ability to meet their monthly expenses or operate their business.
Tax help in Maryland
In tax collection matters, a taxpayer has a range of options that should be fully considered in light of the particular facts and circumstances. Rosenberg Martin Greenberg are tax lawyers in Maryland with years of experience helping those facing IRS collections reach affordable tax debt settlements. We’ll help you file your back taxes, get current on your debt, and help you remain in compliance moving forward.
Several options are available to those in tax collection status including:
- Filing an extension to pay
- Entering an “Installment Agreement” or partial pay installment agreement
- Making an Offer in Compromise
- Obtaining “Currently Not Collectible” status
An installment agreement is more than just arranging a payment plan. The goal of federal and state tax authorities is to secure the largest downpayment and the largest monthly payment to satisfy the liability in full and in the shortest period of time. These goals often conflict with a taxpayer’s ability to pay their tax liabilities while maintaining their business and meeting their personal monthly living expenses.
At Rosenberg Martin Greenberg, we work with our clients and the tax authorities to negotiate the best possible agreement for a client’s individual situation. In certain cases, our team of tax lawyers are able to negotiate a total payment of less than the full amount in collection.
Offer in Compromise
An Offer in Compromise is a settlement of a taxpayer’s federal and state tax debts for less than the amount owed. Offers are carefully reviewed and the financial information provided thoroughly investigated. Information submitted with an Offer is done so under penalties of perjury, so all Offers should be carefully prepared and reviewed for accuracy prior to filing. Moreover, the filing of an Offer tolls the statute of limitations on IRS collections, and not every assessment is subject to compromise, so a thorough analysis of a taxpayer’s current and potential liabilities is required before any Offer is submitted.
Offers filed with the IRS are often denied at the initial level of review. In those cases, taxpayers should file an administrative appeal and seek independent review of the information submitted. It is critical that the taxpayer remain in current compliance while an Offer is pending and for at least five years after an Offer is accepted and fully satisfied. Failure to do so can result in a default of the Offer and reinstatement of all related liabilities. Our Batimore-based tax attorneys can help you monitor your status as we wait for the outcome of your appeal.
Currently Not Collectible Status
When a taxpayer cannot afford an installment agreement or an Offer in Compromise based on their individual financial situation, their federal tax accounts may be placed into “currently not collectible” status, during which enforced IRS collection activity is terminated and payments are suspended until the taxpayer’s financial situation improves. During this time, the taxpayer’s refunds are applied to the outstanding liabilities and interest and penalties continue to accrue.
State tax authorities also employ a number of techniques to collect unpaid individual and business taxes. Under state laws, taxpayers often have fewer rights and defenses to aggressive collection efforts. For example, in Maryland, the Comptroller can prevent the renewal of a professional or business license, renewal of driver’s license, and renewal or transfer of vehicle registrations until a taxpayer comes into compliance and initiates an acceptable payment arrangement. Failure to address these issues can result in substantial civil penalties and potential criminal prosecution for operating with a license.
Start Working on Your Tax Settlement Today
Baltimore tax attorneys Rosenberg Martin Greenberg have extensive experience in federal and state tax collection matters, including reaching tax settlements with the IRS, pursuing collection alternatives, addressing federal and state tax liens and preventing the levy of accounts, garnishment of wages and seizure of assets.
We work with our clients to identify available collection alternatives, determine which alternative or combination of alternatives is best for their individual facts and circumstances, and assist in the execution of that strategy, ensuring that the client’s rights are protected along the way.
If you need assistance with a tax collection matter, please call Brian Crepeau at 410.649.4981 or email email@example.com.
Talk to a Baltimore Tax Attorney Today
If you are seeking counsel for a tax related legal matter, contact the Rosenberg Martin Greenberg Tax Controversy experts.
Tax Controversy News
The extended government shutdown is adding to the anxiety that some taxpayers feel with respect to when they will get their refund. The tax attorneys at Rosenberg Martin & Greenberg LLP cannot answer that question with any degree of certainty. We can, however, provide some guidance that will help taxpayers avoid the problems that can…
Taxpayers who own business or rental properties will have legitimate questions about the aggregation rules for Section 199A of the Tax Cuts and Jobs Act of 2017. The tax attorneys at Rosenberg Martin & Greenberg LLP in Baltimore note that the IRS did not issue guidance for Section 199A issues until mid-January 2019. Taxpayers are…
Collection – Pre-Notice Levies: When the IRS Can Levy Before Notifying Taxpayers of Their Right to a Hearing
This article was originally published in the Journal of Tax Practice and Procedure, December 2018 – January 2019 edition. A. Introduction One of the most important rights a taxpayer has during the Internal Revenue Service (“IRS”) administrative collection process is to be notified of their right to a collection due process hearing before the IRS…