FREQUENTLY ASKED QUESTIONS

Can the auditor only audit the returns they requested on the letter?


NO. THEY CAN EXPAND THE AUDIT, GENERALLY UP TO THREE YEARS. IF THERE IS SUPPORT TO EXPAND THE AUDIT BEYOND THREE YEARS IT IS USUALLY DO TO CRIMINAL ACTIVITY.




I am being audited by the IRS. They advised me what to bring. How do I prepare?


PLEASE BE ADVISED THAT IRS AUDITORS LIKE ORDER. THEY DO NOT NECESSARILY LIKE TO MAKE ORDER. HAVE YOUR DOCUMENTS IN DATE ORDER. DO NOT THROW THEM INTO A BOX. IF YOUR TAX RETURN HAS SCHEDULES PUT THE SCHEDULES IN ORDER, I.E. SCHEDULE A, B, C, ETC. DO NOT BECOME CREATIVE. DEAL WITH THE FACTS. BEFORE YOU GO TO THE AUDIT ASK THE AUDITOR WHERE YOU CAN REVIEW THE LAW ON THE REQUESTS THEY HAVE MADE. OTHERWISE, HIRE A PROFESSIONAL AT THE BEGINNING OF THE AUDIT NOT MIDWAY.




What is the difference between an LLC and Subchapter S Corp.?


PRIMARILY THE LLC IS STATE SANCTIONED ENTITY AND MUST CHOOSE HOW IT WILL FILE ON THE FEDERAL LEVEL. IF AN LLC DOES NOT CHOOSE HOW IT IS TO FILE, IRS HAS “DEFAULT RULES,” THAT IT MUST FOLLOW. A SUBCHAPTER S CORPORATION IS A FEDERAL ENTITY THAT IS QUITE POPULAR WITH SMALL BUSINESS BECAUSE OF THE “FLOW THROUGH” PROVISIONS. IT PROVIDES MORE FLEXIBILITY THAN THE REGULAR CORPORATION BECAUSE OF LOWER TAX RATE.




Currently I am a single member Limited Liability Company, can the IRS seize my personal assets?


YES. LLC’S ARE STATE SANCTIONED ENTITIES AND THE IRS DOES NOT RECOGNIZE THEM. THEY DO HAVE GOOD PURPOSES AND MUCH FLEXIBILITY BUT IT DOES NOT MAKE YOU SEIZURE PROOF.




I owe back taxes, what should I do?


RESPOND TO THE NOTICES. OR GET A “QUALIFIED” PERSON TO DO SO. QUALIFIED MEANS AN ENROLLED AGENT, ATTORNEY OR CERTIFIED PUBLIC ACCOUNTANT.




Can I make an installment agreement on back employment taxes?


YES WITH THE CORRECT DOCUMENTATION. THE DOLLAR AMOUNT OWED DICTATES HOW MUCH FINANCIAL INFORMATION YOU MUST PROVIDE.




Is it possible for me to get an Offer in Compromise for pennies on a dollar?


MORE THAN LIKELY NO. IT HAS BECOME MORE AND MORE DIFFICULT TO GET AN OFFER THROUGH. THE RULES HAVE CHANGED DRAMATICALLY. CURRENTLY, YOU MUST PUT 20% DOWN. THAT IN ITSELF ELIMINATES MANY PEOPLE. THERE IS A $150.00 PROCESSING FEE AND YOUR FINANCES ARE SCRUTINIZED VERY CLOSELY. DO NOT BELIEVE THE “I CAN GET YOU PENNIES ON THE DOLLAR” THAT IS HYPE. I TAUGHT OFFER AND COMPROMISE CLASSES FOR THE IRS WHILE EMPLOYED THERE.




Can the IRS file a lien on my property and levy my bank account?


YES. AT THE SAME TIME.




I filed bankruptcy, are my taxes discharged?


PROBABLY NOT. IT NOT ONLY DEPENDS ON THE CHAPTER OF BANKRUPTCY YOU FILED, THE “TIMING” OF THE FILING OF THE BANKRUPTCY IS CRUCIAL. IT ALSO DEPENDS ON THE TYPE OF TAXES YOU OWE. SOME TAXES ARE NEVER DISCHARGED IN BANKRUPTCY.




The IRS said that they will file a lien against me. They did, but I feel no effects.


THE FEDERAL TAX LIEN IS THE MOST DAMAGING DOCUMENT THAT IS ISSUED BY IRS, PROBABLY THE REASON THAT YOU HAVE NOT “FELT” ANYTHING YET IS BECAUSE YOU HAVE NOT TRIED TO MAKE A LARGE SCALE PURCHASE; SUCH AS A CAR, REFINANCE YOUR HOME, EXPAND YOUR BUSINESS. THE FEDERAL TAX LIEN IS RECORDED ON YOUR CREDIT REPORT.




What can I do to not get another levy or granishment?


READ YOUR MAIL. OFTENTIMES CLIENTS ARE ACTUALLY AFRAID OF READING THE MAIL FROM A GOVERNING AUTHORITY. THIS MAKES THE ACTIONS TO BE TAKEN AGAINST YOU SEEM SURPRISING. GENERALLY IT TAKES ACTION, TO GET TAX PROBLEMS RESOLVED.




Can STA get a notice of levy/granishment released on my wages or bank account?


CERTAINLY, IN MOST CASES. THE LONGER YOU DO NOT REACT TO A NOTICE OF LEVY OR GARNISHMENT THE MORE DIFFICULT IT BECOMES TO GET THEM REMOVED.





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