Have questions regarding tax laws and your IRS tax debt? Visit this page. Our Tucson tax attorneys answer commonly asked questions about IRS tax problems.
My accountant says that he can help me with my tax debt resolution problem. He knows me and my taxes. Why shouldn't I just let him help me?
Accountants are good at crunching numbers, knowing laws about taxation and doing taxes. Some may even be willing to help you do tax planning. They can also legally represent you in front of the IRS for your tax debt resolution problem, but that doesn't mean that they should or even that they are the best person to represent you.
Tax debt collection law is not something that most accountants are really familiar with, nor should they be. Tax collection representation may very well take into account other areas of law such as marital dissolution law or marital property law. There may be real estate law issues or even constitutional law issues. Not only do most accountants not have any background in these areas, most of them don't even know that there are other legal issues that may come into play. Also, most accountants are not schooled in negotiation methods and most are certainly not experienced in negotiating with the IRS. This just is not where most accountants spend their time.
You would be better off to let your accountant do your taxes and hire a knowledgeable tax resolution lawyer to handle your tax debt problem. If you do you will most likely obtain a better resolution of your problem in the vast majority of the cases.
Isn't it best to hire an ex-IRS agent to handle my tax debt problem?
Not necessarily. Just because someone is an ex-IRS agent doesn't mean that they really have the appropriate knowledge or temperment to handle your tax debt matter appropriately. There are many divisions of the IRS. They do not all have to do with the collection of taxes. For example, the audit division never deals with tax collection. All that they deal with is checking the accuracy of various types of tax returns. An IRS auditor is called a Revenue Agent. A person who works for the IRS in the tax collection division is called a Revenue Officer. Obviously an ex-revenue officer is going to know more about tax collection matters than an ex-revenue agent. There are many other types of IRS employees. Some IRS employees, when they quit or retire from the IRS want to get into the business of representing tax debtors. All they have to do is take a test to become what is known as an Enrolled Agent and then they can take on representing people with tax debt collection problems.
This doesn't mean that they have any practical experience in tax debt collection matters even though they used to work for the IRS.
There are a couple of other issues that you need to consider when hiring someone to represent you in tax matters. Many times there are other legal issues involved such as State marital and divorce laws, real estate laws and business laws. The only type of representative that is qualified to recognize these other types of legal issues as they affect tax debt collection is an attorney. There are many times that State legal matters must be dealt with before appropriate relief can be obtained under the Federal tax statutes. Only a duly licensed attorney can handle these matters. Also, there may be a question as to whether you may need to think about bankruptcy. Again, the only qualified person to advise you is a licensed attorney.
The last issue to consider is not always a problem, but when it is you won't be able to see it. Many people who work for the IRS for their entire adult lives have trouble seeing tax issues from the side of a person who has not paid their taxes. Sometimes this attitude prevents such a person from effectively coming up with creative ways to solve your tax problem.
Always ask questions about a persons specific background and work in the IRS. However, it is normally best to be represented by an attorney who will be able to see all legal issues that might be involved and will then have the ability to deal with them.
Do I really need a tax lawyer to represent me for tax problems or can I just deal with the IRS by myself?
The short answer is that you may not need a lawyer to represent your interests with the IRS. However, you should arm yourself with all the information that you can get about your situation. If you owe less than $10,000 to the IRS and can afford to pay the entire amount either in one lump sum or through an installment agreement, then you probably don't need representation. There are also other situations where it might be o.k. to deal with the IRS by yourself. However, for the vast majority of cases it might be foolish for you to talk to and deal with the IRS by yourself. What I would advise would be to amass as much information as you can about your specific problem and then at least consult with a qualified tax lawyer to determine whether you really need representation. Many tax lawyers will give you a free initial consultation. I emphasize talking to a lawyer because, by law, anything that you say to an attorney will be confidential. This is not true with other types of representatives such as CPAs and Enrolled Agents. Attorney Sheldon Lazarow does provide a free, no-obligation, half-hour consultation. Contact him at 520-623-5856 to discuss whether representation would be appropriate in your situation.
I have already paid for representation from a company that advertises tax relief representation on T.V. They didn't do anything to help me. How do I know that it won't be the same if I hire your firm?
We are sorry that you had trouble with your tax representation by another company. The Lazarow Law Firm has represented a large number of people in your shoes. We can do nothing to get your money back from the other company, but we can and do represent our clients to the best of our abilities until we find a way to resolve their tax problems. Sheldon Lazarow has been practicing law since 1976 and has an AV Preeminent rating from Martindale-Hubbell, the largest and oldest attorney rating company. This is the highest rating that an attorney can get. Of course, no representative can truthfully guarantee any particular outcome with the IRS, but we have not been in business all these years with the recognition that we have obtained without being very well respected and successful. Call us now at 520-623-5856 to see how we can help you.
I owe back taxes to the IRS. Am I going to go to prison?
Just owing back taxes simply because you cannot afford to pay them is not a criminal offense. There is no possibility of prison. However, if you have actively done something to evade paying your taxes, commonly known as tax evasion, then there is a possibility that you may be criminally prosecuted by the Department of Justice. Also, it is a Federal criminal misdemeanor to fail to file your income tax returns. People have been prosecuted for this. But, if you get your past due tax returns filed now, the IRS will usually forgive your prior failure to file. Talk to a tax attorney about whether your particular situation brings up any criminal concerns. CAUTION. YOU MUST ONLY TALK TO AN ATTORNEY ABOUT CRIMINAL CONCERNS. By law, when you talk to an attorney everything that you say is strictly confidential and under most circumstances cannot be divulged to other parties including the IRS. This kind of legal confidentiality is not available to you if you talk to a CPA or an enrolled agent about your problems. Contact Attorney Sheldon Lazarow, now, to discuss any concerns you might have about criminal prosecution. He can be reached at 520-623-5856.
Can the IRS close my business if I owe back employment taxes?
The IRS certainly has the power to close your business and seize all of the business assets including the accounts receivable. However, you don't have to let it get that far. The IRS is greatly concerned about businesses keeping current with their employment tax deposits even if the business owes back employment taxes. If you are currently depositing all of the required employment taxes on the time schedule that is required by law, then the IRS will be willing to work with you on the back tax debt. You must do everything that you can to be current with all future deposits. Then, don't ignore the fact that you owe back taxes. Contact a tax lawyer who can help you resolve the problem with the IRS. Contact the Lazarow Law Firm at 520-623-5856 for ideas about how to become current with your employment tax deposits and to discuss resolution of the back tax debt.
Can I really pay only pennies on the dollar to settle my back tax debt with the IRS?
You are most likely referring to all of the advertising hype that fills the country's T.V. and radio airwaves these days. The reference to paying pennies-on-the-dollar usually refers to an Offer in Compromise. This is a remedy for past tax debts that is allowed by U.S. tax law. The problem is that not everybody meets the qualifications set out by tax law to file a valid Offer in Compromise. Many tax debt resolution companies will falsely lead people to believe that they can file an Offer in Compromise with the IRS and offer to pay a lesser amount than they owe. Also, they really can't tell if you are a proper candidate for an Offer in Compromise by asking you a few questions over the phone. A deeper analysis is required. Although they can file the papers for an Offer in Compromise, what these companies fail to tell you is that the majority of “Offers” are denied by the IRS. The greatest reason for this is that the Offer was not the appropriate remedy in the first place. Although Offers in Compromise are definitely good remedies in the right situation, there are many remedies available to deal with delinquent tax problems. Some of those remedies may even be better for you depending on your particular situation. It takes a professional that is knowledgeable and experienced in tax debt matters to be able to analyze your situation appropriately and present the best possible remedies to you. Contact Attorney Sheldon Lazarow at 520-623-5856 to discuss the remedies that might be available to you.
Can I discharge my back tax debt by filing a Chapter 7 Bankruptcy?
It is possible to discharge some income taxes in a Chapter 7 Bankruptcy, but we do not recommend that you start with a bankruptcy proceeding if the only reason that you are filing is for your tax debt. There are too many other remedies under the tax law that might resolve your situation without going through the pain and credit problems of a bankruptcy. The rules for discharge of income taxes in bankruptcy are complex. Newer tax debts are usually not dischargeable. If all else fails to resolve your tax debt problem then you may want to look to a Chapter 7 bankruptcy. It should be the last thing that you try.
You can never discharge Form 941 Employment taxes that you may owe from a business that you own or have owned in the past. Nor can you discharge a tax debt called a civil penalty.
What kind of bankruptcy can I use to help me with my business employment taxes?
You may be able to use a Chapter 13 or Chapter 11 reorganization bankruptcy to help with employment tax debts. In these types of bankruptcies you cannot discharge or get rid of the taxes. You will wind up paying all or almost all of the taxes over a period of years under a plan sanctioned by the bankruptcy court. These types of bankruptcies can be helpful but they can also be very expensive. Other tax resolution methods should be tried before considering these types of bankruptcies. Contact the Lazarow Law Firm now at 520-623-5856 to discuss what other tax resolution methods might be available to you.
How can I keep the IRS from taking my money, my wages, my property and my house because I owe them taxes and just can't pay them now?
First of all, don't just ignore your situation. Tax problems don't go away by themselves. If you know that you are going to have a problem with the IRS or if you are being chased by the IRS now, contact a tax attorney immediately. A qualified tax attorney can, in most situations, put plans into place that can stop the IRS cold. He or she can then analyze your situation and work with you to obtain an appropriate remedy with the IRS so that you can go about your life in peace. Contact Attorney Sheldon Lazarow now at 520-623-5856 to find out what can be done for you.
We just have a Mom and Pop small business. Do we have to keep every one of our expense receipts to avoid problems if we ever get audited?
The official answer to your question is yes, of course you have to keep all of your receipts. But, I have yet to see a small business person that has actually done that. Look, you need to keep receipts on your big purchases. What does that mean? It means that when the IRS does audits they don't waste their time looking at every little expenditure. The IRS looks at the major expenses that you claim on your tax return. If you are a small business and have expenses for a thousand dollar piece of machinery or ten thousand dollars worth of materials that you use in your business, you had better have proof in the way of receipts for those purchases. If you bought a box of tacks at the drug store nobody really cares about seeing the receipt.
The IRS audited me because they said that I made money in the stock market, but I actually lost money. How can I get rid of the extra taxes that they charged me because of the audit?
This is a very common problem especially if you do your income tax return yourself. It is caused because, at the end of the year, your investment firm or bank sends a Form 1099 to the IRS showing what you sold stock for during the year. The problem is that the IRS doesn't know if the amount that you received from the stock sale was a gain or a loss unless you tell them what you paid for the stock originally. This is done on Schedule D of the Form 1040 income tax return. If you have this problem all you have to do is to file an amended Schedule D that shows the basis (what you paid for the stock originally) for the stock that they are auditing you for. A qualified tax preparer can help you with this.
By the way, there are new laws that now require your investment firm to show the basis of the stock on the Form 1099 that they file with the IRS. Hopefully fewer people will have trouble with this in the future.
What is a tax audit?
On occasion the IRS may have reason to question something on your individual or business tax return as being out of the ordinary. If so, they may take a closer look at the return to verify whether your reported income and the deductions you have taken on your return are accurate. This is called an audit. (Actually some audits are done at random without the IRS having any reason to suspect any abnormalities on the return.)
There are three types of audits. The first type is the Mail Audit. This is the simplest type of audit. It does not require you to meet with an IRS representative. You will merely get a letter in the mail questioning something you did on your tax return. Most of the time the IRS is just requesting further proof or documentation of something on the return. If you give it to them the audit will usually end in your favor.
The second kind of audit is called an Office Audit. This is an in-person audit conducted at an IRS field office with an audit officer. This is a more in-depth audit than a mail audit. You will be asked to bring specific books, records, receipts and information to the audit. At the audit you will be asked to explain any problems that the IRS is concerned with on your tax return. You do have a right to bring a representative such as an accountant or a lawyer with you to this type of audit. However, in our practice we appear at the audit without our taxpayer client. Our clients don't have to talk to the IRS in most cases.
The third type of audit is called a Field Audit. This is the most comprehensive type of audit that the IRS conducts. In these types of audits an IRS auditor, called a Revenue Agent, will conduct the audit at your home or place of business. Revenue Agents are very thorough. They will be questioning your entire return and not just one or two deductions as might occur on the simpler audits. Many times these audits will last days. You are entitled to be represented at these audits as well.
It is never a good idea to go through an Office or a Field audit by yourself. The tax laws are complex and the auditors interpret them in a very strict manner. Saying the wrong thing or failing to be able to prove certain things in an audit can cost you a lot of money in extra taxes, penalties and interest. If you get a notice of audit from the IRS you should contact a tax lawyer immediately before you talk to the IRS. Not to get help in these situations could be very detrimental. Contact Attorney Sheldon Lazarow now at 520-623-5856 to get help with your audit problem.
I don't live in Tucson, Arizona. Can you still help me with my IRS problem?
Yes. Sheldon Lazarow is an Arizona licensed attorney, but he is authorized to represent people in front of the IRS nationwide. He has represented clients from coast-to-coast and Alaska. He has also represented American citizens living in foreign countries for tax problems they have had in the United States. Contact Sheldon Lazarow now at 520-623-5856 for help with your nationwide tax problems.
Does the Lazarow Law Firm accept credit cards for payment of my attorney fees?
Yes. We accept Visa, Mastercard, Discover and American Express for payment. We also accept debit cards. We can also arrange for you to pay your attorney fees in reasonable installment payments.