[email protected] your payroll tax resolution kit · a lien subordination is the process...

304 S. Jones Blvd #4297 Las Vegas, NV 89107

(602) 649-4779

[email protected]

Your Payroll Tax Resolution Kit

INTRODUCTION

Our payroll tax resolution toolkit will support your efforts in removing the stress of dealing

with the IRS and get your business back on track. It includes additional instructions,

forms, and professional guidance to get your tax problem in check.

KIT PARTS

• 3-Steps to Obtain a Collection Hold Guide

• A Guide to Federal Tax Lien Removals

• The Payroll Tax Collection Process Illustration – Where Are You in the Cycle?

• A Step-By-Step Guide to Completing Form 433-B& the IBTF-E/IBTF Processes

• Special Report: 5 Questions to Ask Any Tax Resolution Firm Before Paying Them A

Dime – in case you do want to hire a professional

STRONGER TOGETHER

We know your job keeps you busy all hours of the day. But the IRS is keeping you up all

hours of the night! Do not lose another sleepless night by fighting the IRS on your own.

Let's face the brunt force of the IRS together.

Jacob Merkley, EA

Founding Partner

3 Steps to Obtaining an IRS Collection Hold so they Don’t Go After Your

Customers & Vendors

© Copyright Western Tax Alliance, LLC

The IRS can do a lot of nasty, but legal, things to you:

• Federal tax liens

• Federal tax levies

• Trust Fund Recovery Penalty (they can piece the corporate veil and touch you personally)

Once the IRS decides that you are too far in tax debt and they start going crazy with your case,

they will start contacting customers that owe you money (and asking for them to pay them

instead) and vendors that you have lines of credits with. They will seize a business truck and

liquidate it or even put a lien on your receivable list that you are factoring for cash flow.

All of this will ultimately screw up inventory orders, your receivables, resulting in major cash

flow or revenue issues that you desperately need to survive. In other words, they will wreak

havoc for you and your business

IRS Collection Hold

Luckily, in their gracious little way, the IRS will typically allow a collection hold for certain

reasons. Most often its to allow time for the business to get their crap together: bookkeeping,

financial statements, complete the financial analysis, obtain financial documentation, and so on.

3 Steps to Obtaining a Collection Hold

Call the IRS at 1-800-829-1040 or call the phone number on your bill or notice and say

these words, “I would like to request a temporary collection hold. I have received the

notices and bills and would like to get on a resolution pathway. I’d like some time to put all of

the necessary items together to get current and compliant as well as provide everything that will

be needed for resolution. Can I have 120 days to get this done?” (they will likely only offer 30-

60 days, but that should be enough to get things situated.

Call your local IRS officer, ask to speak to a Group Manager, and request that your case

get assigned to a Revenue Officer in the field. This automatically gets you pushed into

an order with the Revenue Officer and will create a time gap that you can use where collections

will be on hold.

Call our team of specialists for your Tax Debt Settlement Analysis – It’s normally

$175 just to speak with a licensed team member, but I’ve made it free of charge for the

first 8 analyses each month. Schedule here: www.westerntaxalliance.com/settlement-analysis

http://www.westerntaxalliance.com/settlement-analysis

Federal Tax Lien Removal Guide


IRS Notice of Federal Tax Lien A Notice of Federal Tax Lien (NFTL) is an encumbrance that establishes a legal claim by the

government. It does not result in the physical seizure of your property. A levy, on the other hand,

allows the IRS to actually seize business cash, assets or property. In general, a tax lien gives the

IRS a claim against everything the business owns, from office equipment to work trucks to bank

accounts.

A Federal Tax Lien also impacts your business credit score, since it shows up on the business

credit report. Therefore, the tax lien can impact your ability to obtain loans, rent an office space,

and can even impact your business insurance rates.

In most cases, a tax lien will jump ahead of many other liens against your business assets and

property after a 180 day period, unless a particular piece of property is used as collateral for a

loan. For example, a tax lien does not jump ahead in priority position over a work truck loan or a

first, second, or third mortgage against a business property. It will, however, usually jump ahead

of, say, a mechanic's lien against your property.

You may have circumstances where having the lien released would be of benefit to helping you

resolve the tax situation. There are three types of lien releases available to a business that may

help you resolve tax liabilities with the IRS.

Certificate of Discharge A Certificate of Discharge (COD) is the process of removing a single piece of property from

being subject to the tax lien, usually so that the property can be legally transferred. For example,

if you are trying to sell a piece of business property but the presence of the lien is preventing this

from occurring, then you would need to obtain a Certificate of Discharge to release the tax lien

against your that property.

In the vast majority of cases, the IRS will not release a lien against a particular piece of property

unless they are somehow going to benefit from it. They will generally approve a Certificate of

Discharge if the lien discharge will facilitate the sale of the property in such a way that the IRS

will get some money out of it. In other words, releasing the lien will facilitate collection of the

tax.

If the government isn't going to see any money out of releasing a piece of property from the lien,

it's possible to still obtain a Certificate of Discharge if there is a valid reason. In particular, if the

IRS won't be receiving any money, but getting rid of the property will free up business cash flow

and put the business in a better financial position in regards to income and expenses so that later



on down the road you can start paying down the tax debt, then the IRS will likely approve a

Certificate of Discharge.

If the property in question has no significant fair market value, the COD may also be granted, but

this is much more of a hit-or-miss situation.

Lien Subordination

A lien subordination is the process of moving the tax lien down a notch in the prioritization of

claims against a piece of property. For example, if you own a business work truck free and clear,

and the tax lien is in first position against the truck, you can't obtain a mortgage against the truck.

No lender in their right mind is going to loan you money against that truck unless their lien is

going to take first position.

The answer to this problem is the lien subordination. The IRS will usually approve the

subordination of their lien against a property (in this case the truck) if the lien that will be taking

first position ahead of the tax lien will result in money going to your tax liability.

In the truck example, obtaining a subordination of the tax lien in order to obtain a loan against

the truck will result in cash coming from that loan. At closing, that cash will go directly to the

IRS, the loan will move into first position, and the tax lien gets re-recorded in second position.

Remember, paying interest on a loan is almost always going to be cheaper than paying penalties

and interest to the IRS.

There are other conditions where a lien subordination will still be approved, even if the IRS isn't

going to obtain direct proceeds from doing so. For example, some commercial electrician

companies will finance their accounts receivable through a process called factoring. In factoring,

a lender pays the electrician company some percentage of their accounts receivable (usually 75%

to 90%) up front, and then the lender takes the responsibility of collecting on that account

receivable when it's due, usually 30 to 90 days down the road. This way, the electrician company

gets money now so that they can buy equipment, inventory for projects, and to make payroll.

When a tax lien is filed, most factoring lenders stop funding. In that case, the commercial

electrician company suddenly loses much of its on-going cash flow. In order to enable the

funding to continue, a lien subordination can be obtained that moves the tax lien to a position

below the factoring lender, thereby protecting the lender's claim on those accounts receivable.



Lien Withdrawal

There are rare occasions when obtaining an outright release of the entire Federal tax lien is

actually the best way to progress towards a resolution of your tax liabilities. If a case can be

made that the withdrawal of the lien will facilitate payment of the tax liability or is otherwise in

the best interest of both the business and the government, then the government may be open to

this.

Another case where a lien withdrawal can be applied for is when the business has entered into an

Installment Agreement to pay the Trust Fund taxes and the agreement did not mandate that a lien

be filed, particularly a payment plan where the payments are directly withdrawn from the

business bank account. In these cases, you can often get the lien released as long as you are

current with payments and other tax obligations.

Certificate of Release of Paid or Unenforceable Lien

The IRS is required to issue a certificate of release of lien no later than 30 days after one of the

following events occur:

● The tax liability is paid in full.

● The tax liability is no longer collectible. In other words, the 10-year statute of

limitations on collections has expired.

● The IRS accepts the bond of a surety company or payment of all taxes owed is to be

made no later than six months before the expiration of the 10-year collection statute.

● The taxpayer delivers a cashier’s check to the IRS and receives a Certificate of Release of

Tax Lien.

--------------------------------------------------------

Don’t want to deal with the IRS yourself?

Hire our specialized team. We only work with construction and trade contractors to

resolve specific tax situations and are experts in resolving your case with the IRS.

Discover your tax resolution options now:

www.westerntaxalliance.com/discover

--------------------------------------------------------


The Payroll Tax Collection ProcessWhere Are You in the Cycle?

Collection starts through a tax deficiency, when…

1. Business files a return with a

balance due

2. The IRS creates a Substitute for

Return (SFR) because you didn’t file a

return, creating a balance due

3. The IRS completes an examination

and determines a tax debt

The Never-Ending Cycle

*SNOD – Statutory Notice of Deficiency

*NFTL – Notice of Federal Tax Lien Filing

*CP-504 – Notice of Intent to Levy

*Letter 1058 – Final Notice of Intent to Levy

SNOD – Bill #1

SNOD – Bill #2

NFTL

CP-504

Letter 1058

New Tax Deficiency

START HERE:

Each quarter you

don’t pay enough

or at all

How to Break the Cycle?

Ask the IRS for a Temporary Collection Hold

They will typically allow a 30-60-day window when you negotiate (use the time to

fix everything!)

Get Current with Federal Tax Deposit Payments

Pay the most recent deposit payment amount for the most recent payroll

Get Compliant with Filing Requirements

File the next Form 941 on time for the current quarter

Finally, Seek Resolution

Form 433-B – Collection Information for Businesses


Form 433-B is what the IRS uses to determine if you are eligible for an installment agreement,

an offer in compromise, to be put in currently non-collectible status, and so on.

Let’s go through this form section by section.

Section 1 – Business Information

This section is used to provide the necessary contact information for the business, as well as

essential information regarding the company, type of business, how many employees are

employed, the type of entity, date of incorporation, the amount of monthly gross payroll, etc.

They are also looking for payment processors that you use to conduct business.

My advice is to be thorough here. If you don’t include something that should be included, it will

look fishy. If it is not applicable, don’t leave it blank (again fishy) but instead use “N/A”.



Section 2 – Business Personnel and Contacts

Section two asks you to list out specific groups of people. Partners, officers, major shareholders

should all be used. If you can’t tell, you will be providing personal information here. Know what

that means? They are looking for potential Trust Fund Recovery Penalty people here.

My advice is to be transparent, but don’t add people just for the sake of adding people. Each

person on this list will ultimately get an interview regarding the Trust Fund Recovery Penalty. If

someone really doesn’t need to be on here, don’t add them.



Section 3: Other Financial Information

The general theme of this section is to get to know how you operate regarding your finances. Do

you use a payroll company? Have you ever filed bankruptcy? Do people owe the business money

or assets? Are there other affiliated companies with the same ownership group (they are thinking

evasion of taxes here)?

They ultimately are trying to get to know where the company is at today regarding lawsuits,

money still coming in, and who is paying payroll out.



Section 4: Business Asset and Liability Information

In this section, include cash on hand, information about any safes on the premises and bank

account information. Keep in mind they are looking for levy sources here, so don’t give them

anything more than they absolutely need.

In the accounts and note receivable area, again they are looking for potential levy sources.



As a contractor, you likely aren’t holding on to a bunch of bonds or commodities, but you can

include them here if you do.

The IRS wants to know how much credit you can tap into. In other words, can you actually pay

the full amount of the debt by financing it through someone else? If yes, they can legally force

you to get that loan.



Here they are looking for real property owned, leased, or rented by the business. Again, they are

looking for levy and lien potential properties.



This is the area where I see most of the information provided by contractors. You may or may

not own property, but you almost always own trucks or some time of vehicle to haul supplies to

and from jobs. Be very thorough here because they can access this information anyways with

database. Show some transparency in this section and it will put a check mark in your favor.



This is where you need to specify business assets, equipment, and intangible items that have

value. Be specific with the item and the FMV.



Finally, review the business liabilities of the business. This could be exhaustive, and you may

need an additional page to add as an attachment. Liabilities ultimately reduce owner’s equity, so

provide every reasonable liability here to counteract that equity, high valued assets, and income

that you will provide below.



Section 5 – Monthly Income/Expenses Statement

If you remember, I mentioned that you can provide a P&L and balance sheet to the IRS in lieu of

this section. I highly recommend that you do that. Again, it makes you look like you have your

crap together.

If you must fill out this section, be prudent to only use the cash method and only include

reasonable and ordinary business expenses.

Then make sure you sign and send it in.



General Concepts & Ideas

1. Necessary and Ordinary

The first concept is likely the most important. The IRM dictates that business expenses must be

“necessary for the operation of the business”. IRM 5.15.1.15(3) takes it a step further by saying,

“allowable business expenses are the cost of carrying on a business or trade”. Thus, the

necessary and ordinary business expense rule comes about.

Well, what is considered a necessary and ordinary expense? As you can tell, it’s a much greyer

area than you might think initially.

You need to be critical in this area. Business expenses that don’t directly impact business income

may be examined more thoroughly and ultimately not be allowed in the final analysis. When you

start down the resolution path, you need to be willing to make some business adjustments and

that first starts with this concept.

2. Audit Technique Guides

Audit Technique Guides (ATGs) were developed by the IRS to help IRS personnel complete

examinations of businesses within a specific industry. In other words, it puts forth what a

Revenue Officer should look for when analyzing a business within an industry sub-category.

These ATG’s walk the IRS personnel through common scams, common assets that people

attempt to hide in that industry, pretty much all the bad things. It also talks about common

business expense items.

Luckily, there is a construction industry specific ATG. You can find that here:

https://www.irs.gov/pub/irs-utl/Construction_ATG.pdf

This ATG is exhaustive. In fact, it has 258 pages to it! But if you really want to represent

yourself before the IRS, then you need to read this ATG. Afterall, the Revenue Officer who is

examining your business has read it and you need to know what they are going to look for before

they are there looking.

The entire thing is a healthy read, but I would specifically target chapters 3, 6, 8, 9 and then

Appendix 1, 3, and 6.

3. Scrutiny

Another concept we should review. In short, the IRS does not trust you.

Is that mean and uncalled for?

Potentially, but in their eyes, you are the one in tax debt and that means they can justify having a

lack of trust.

https://www.irs.gov/pub/irs-utl/Construction_ATG.pdf



Because of this lack of trust, you need to expect scrutiny in all matters with the IRS: reviewing

of bank statements, tax returns, verification of assets, and other records with line items. If

records show that you have the cash to full pay, the buck will stop there! If records show that you

can’t pay the debt, they will force you to provide ample evidence to prove that.

When they ultimately verify assets, expect scrutiny. They will scrutinize all sources of revenue,

all liquid assets, any equity in assets and available sources of credit.

This all leads to me telling you to get your crap in order, because the IRS will poke and prod

their way to the truth through the eyes of scrutiny!

4. Adjust Immediate Expenses

You should know right up front that the IRS will expect to receive any and all money in excess

of ordinary and necessary business expenses.

What this means is that when you start putting your financial analysis together, you need to

know that whatever amount you have left over after reasonable expenses, the IRS is keeping. But

the trick is “whatever amount you have after reasonable expenses”.

There are likely reasonable expenses that you do not currently pay for that could enhance your

company and keep money out of the IRS’ hands. Yet, there are other expenses that the IRS will

not let stand in this computation.

But by taking advantage of legal and ethic additions to the reasonable expense category, you can

ultimately absorb more of the amount that should have gone to the IRS and lower your long-term

required payment amount regardless of installments or one-time cash payment.

A few general ideas to consider that would seem reasonable and ordinary right from the get-go:

• Legal, payroll, and accounting fees

• Increasing reasonable compensation to Employee-Shareholders. In fact, I would

recommend going above and beyond (within reason) given that you are:

o Working 80 hours a week

o The added stress of being an owner

o Extra time and skills in the industry

o Etc.

• Safety compliance training for staff members (you are in construction after all!)

• Business, Errors & Omissions Insurance and premiums for health insurance for

employees

• Marketing and advertising to get additional business

• Mileage and auto expenses getting employees to and from the job site.



• Federal Tax Deposits (yes, start paying your deposits right away)

As you can see, many of these are traditional business expenses that you may not be capitalizing

on currently. If you pick apart each of these, for the most part, you can make a reasonable claim

that they ultimately lead to an increase in revenue:

• i.e. - Legal, payroll, and accounting fees – better contracts and accounting lead to

increased accounts receivables

• i.e. - Safety compliance training for staff members – keeping people safe lowers injuries

on the job and therefore lower workers compensation insurance and increased efficiency

for employees

• i.e. – Health insurance premiums for employees – better employee retention, leading to

happier employees and therefore more efficient employees

• i.e. - Marketing and advertising to get additional business – no example needed!

Hopefully you get the picture. By adjusting immediate expenses, you will have less in excess

going to the IRS when you reach resolution. At the end of the day, the Revenue Officer assigned

to your case is going to really be looking for the excess profits to swoop up and pay off your

debt. Lower that profit (reasonably, ethically, legally) and you will pay less.

5. Bookkeeping & Documentation

I think it goes without saying but I’m going to say it anyways. Bookkeeping, accounting, and

documentation are incredibly important while putting your financial analysis situation in place.

The 433-B dictates that 6 months of income and expenses be provided. Cases that are less than

$25,000 and are in IBTF-E don’t need to submit financials; however, expect the enforcement of

the 6-month rule with those who have tax debts above this number.

*Special Note - I would never fill out the income/expense portion of the 433-B. In full

transparency, I never do that for clients. The IRM allows for a business P&L and balance sheet

in lieu of the income/expense section of 433-B. The reason I recommend this is that it creates a

sense of organization with the Revenue Officer. It will look like you have (or are putting) your

crap together. You’ll have a better resolution experience, I promise.

*Special Note - If something indicates to the Revenue Officer that a major change in your

finances has occurred, they will request a new 433-B.

--------------------------------------------------------






--------------------------------------------------------


Step-By-Step Guide to Completing the IBTF-E Process


Roughly 75% of all business tax debtors will be placed on an installment agreement. This is the

predominant resolution pathway, not the OIC or CNC program.

I recognize that might be shocking in a way, given that so many companies out there have

“Pennies on the Dollar” advertising which means the Offer in Compromise program. Only 1/3 of

1% actually qualify on the 1040-individual side, and even less qualify on the business side.

Most IRS tax debt cases are resolved through an appropriate payment plan. With tax debts, this

equates to a few different Installment Agreements.

Before we jump into each of these, I want to point out that besides making installment payments

on time, the terms of an Installment Agreement will always dictate that you file all tax returns on

time and that you make any other required tax payments due during the life of the agreement on

time as well.

Those payments include Federal Tax Deposits for payroll taxes moving forward. Failure to make

an FTD can void the Installment Agreement in its entirety, so its incredibly important to stay

current and compliant with filings and payments.

In-Business Trust Fund Express Installment Agreement (IBTF-E)

The express option is the streamlined option for businesses still in service to pay their payroll

taxes. Only employment tax debts (code MFT55 on the account transcripts) can be resolved with

this agreement.

It’s the best option and really the way to go if you can qualify for this option if you haven’t let

the problem linger for a long time. There are some qualification criteria for this installment

agreement, namely:

• The total tax, penalty, and interest (TPI) cannot exceed $25,000, not including accruals.

o You can pay down the total to less than $25,000 before you apply as a voluntary

payment and applied to “trust fund only” and to the most recent quarter.

o The pay-down option must be paid before a Revenue Officer is assigned. If a RO

gets assigned, they won’t allow you to do this.

• The payment term limit is capped at 24 months, meaning that the entire tax liability needs

to be paid within 24 months, and must come to conclusion prior to the expiration of

CSED.

• The Group Manager or ASC Supervisor will need to sign off on the agreement, and

• Direct Deposit agreement is required if the amount is between $10,000 and $25,000.

Let’s talk through a few pros of this installment agreement option:

1. The financial disclosure through Form 433-B is not required. No probing through bank

account statements or financial documents to verify anything!

Step-By-Step Guide to Completing the IBTF-E Process


2. A lien is not required to be filed but is only avoided if the IBTF-E installment agreement

is granted before the normal lien process is completed.

3. Collection Field Function is not required to make a field visit to categorize inventory and

verify assets at the business.

4. A Revenue Officer does not need to be assigned, since the case can be finalized by ACS.

5. Lastly, asset disposal (the sale of assets) is not required.

*Special Note: You can often get around the Trust Fund Recovery Penalty within an Express

installment agreement. The Trust Fund Recovery Penalty in many situations can entirely be

avoided. For this to happen, the business must meet all the IBTF-E requirements above, the debt

can only include current or prior calendar year quarters, and they can’t have already initiated

a 4180-interview process (the Trust Fund interview) prior to agreeing to the IBTF-E installment

agreement. It’s a timing issue, but if you are eligible make sure to take full advantage.

Negotiate Installment Agreement

Once you have decided that you qualify for this option, you need to request (negotiate) an

installment agreement. You can do that by:

1. Be current and compliant with all tax filings and payments

2. Request the installment agreement preferably through a letter that includes:

a. The specific installment agreement type that you are requesting

b. The specific tax types and periods involved (yes, be specific)

c. The amounts you will be paying each month based on the 433-B

d. Date of payment

e. Whether or not you want it to be Direct Debited (if so, provide bank info)

3. Send in the 433-B along with the letter

4. Be ready with all necessary financial documents, bookkeeping records, proof of assets,

etc. for when the IRS comes the review everything.

You can send all of this in my mail or fax, and then always follow up with a voicemail to the

Revenue Officer.

Step-By-Step Guide to Completing the IBTF Process


Roughly 75% of all business tax debtors will be placed on an installment agreement. This is the

predominant resolution pathway, not the OIC or CNC program.

I recognize that might be shocking in a way, given that so many companies out there have

“Pennies on the Dollar” advertising which means the Offer in Compromise program. Only 1/3 of

1% actually qualify on the 1040-individual side, and even less qualify on the business side.

Most IRS tax debt cases are resolved through an appropriate payment plan. With tax debts, this

equates to a few different Installment Agreements.

Before we jump into each of these, I want to point out that besides making installment payments

on time, the terms of an Installment Agreement will always dictate that you file all tax returns on

time and that you make any other required tax payments due during the life of the agreement on

time as well.

Those payments include Federal Tax Deposits for payroll taxes moving forward. Failure to make

an FTD can void the Installment Agreement in its entirety, so its incredibly important to stay

current and compliant with filings and payments.

In-Business Trust Fund Installment Agreement (IBTF)

This is the non-express version. In effect, it’s the full installment agreement when businesses are

in service and they don’t qualify for the Express option. They typically have tax debts in excess

of $25,000 or they can’t pay it all down in 24-month payment terms.

Again, only payroll tax debt can be paid down through this agreement, but there is absolutely no

cap on the amount of debt. Business income tax, excise tax, etc. must be resolved separately and

you likely will end up on two separate installment agreements.

The downsides to this installment agreement, compared to the Express option are:

• Form 433-B is required. This means that financial disclosures must be completed, and

assets will be verified. The exception is if the debt is less than $25,000 and can be paid in

full within 5 years. Otherwise, if the debt is more than $25,000 and/or can’t be paid in 60

months or less, then a full financial analysis will need to be done.

• A lien will be filed against business assets and property.

• Asset disposal can be required.

• A Collection Field Function is required to make a field visit to verify assets.

The In-Business Trust Fund Agreement is a big whammy for the Trust Fund Recovery Penalty,

which almost always will be assessed.

If you find yourself in these situations, one of three situations will typically happen:

Step-By-Step Guide to Completing the IBTF Process


1. The ACS will conduct the 4180 interviews (the Trust Fund Recovery Penalty process),

but Form 1153 (the proposed assessment of the Trust Fund Recovery Penalty) isn’t

issued. In other words, they will start the process and then tuck it away in their file as

leverage. They won’t assess the penalty if the liability is going to be fully paid by the

installment agreement at least one year before the earliest ASED period. In other words,

if the business installment agreement is going to properly cover the entire tax liability

before this time period then the Trust Fund Recovery process will be halted. Instead, the

government will request that anyone identified through the 4180-interview process as

potentially liable for the penalty to sign Form 2750 (the waiver extending the Statutory

limitation to assessing the TFRP).

2. If the tax, penalty, and interest are not fully paid before that earliest ASED period (where

most of you will follow into), there will be a full 4180 investigation, a full financial

disclosure will need to be completed (433-A) for each individual. If there is any

collection potential that is identified through your 433-A (aka, your personal finances),

then an assessment will officially be issued through Form 1153 to you personally.

3. Lastly, for repeat offenders who have had employment tax issues in the past will always

be assessed a 1153 assessment personally.

There’s no getting around that. We are talking serial debtors in this situation.

Negotiate Installment Agreement

Once you have decided that you qualify for this option, you need to request (negotiate) an

installment agreement. You can do that by:

1. Be current and compliant with all tax filings and payments

2. Request the installment agreement preferably through a letter that includes:

a. The specific installment agreement type that you are requesting

b. The specific tax types and periods involved (yes, be specific)

c. The amounts you will be paying each month based on the 433-B

d. Date of payment

e. Whether or not you want it to be Direct Debited (if so, provide bank info)

3. Send in the 433-B along with the letter

4. Be ready with all necessary financial documents, bookkeeping records, proof of assets,

etc. for when the IRS comes the review everything.

You can send all of this in my mail or fax, and then always follow up with a voicemail to the

Revenue Officer.

Special Report: “5 Questions to Ask Any Tax Resolution Firm Before

Paying Them A Dime”


When it comes to something as important as resolving your payroll tax liabilities, it is

important to conduct research on the tax resolution firm(s) you are considering before

agreeing to purchase their services.

What sort of things should somebody do as part of conducting their "due diligence"?

Question #1: Are you licensed to be providing me tax advice?

Many tax resolution firms use unlicensed sales personnel to sell their services. These sales

people do not possess the professional knowledge to be advising you on your tax matters, nor are

they legally allowed to do so. The only people that can advise you on tax matters are Enrolled

Agents (EA), Certified Public Accountants (CPA), and attorneys. Ask the person you’re

speaking to whether they are licensed. If they say anything other than EA, CPA, or attorney, then

they are not licensed.

Some salespeople have even been known to make up something or just give you their title at

their firm (“Senior Tax Analyst”). Several people have received criminal convictions for this

misrepresentation, but it still occurs.

Question #2: Have you ever worked with a business like mine?

Ask the company what industries they have worked with in the past. You are specifically looking

for a practitioner that has experience with your industry and business type. Look for a specialized

firm that has already helped other contractors get out of the pain that the IRS is causing them.

Question #3: Are you the actual person that will be representing me?

Third, before signing a contract for taxpayer representation, be sure to confirm that the firm that

will provide your representation will assign your case to a licensed representative. You should be

guaranteed that your representative is a licensed EA, CPA, or attorney, even if it’s somebody

else in the firm other than the licensed person you’re already speaking to. The IRS will not allow

non-licensed representatives to negotiate for a taxpayer, but you would be surprised at how often

large firms have unlicensed assistants doing the actual IRS negotiation. Before you sign a

contract or send money, make sure you see the IRS Form 2848, Power of Attorney, which lists

the name(s) of the people actually representing you.

Special Report: “5 Questions to Ask Any Tax Resolution Firm Before

Paying Them A Dime”


Question #4: Have you ever actually been involved in negotiating tax resolutions?

In other words, has the person you are speaking to actually worked on tax cases as a

representative. It’s one thing to be licensed, quite another to have actual case experience or not.

Because the government is cracking down on sales practices, some sales closers have actually

taken the Enrolled Agent exam and become licensed. This is better than not being licensed, of

course, but it still does not make them qualified to offer tax advice regarding your IRS debt if

they have no actual case experience. Any case-experienced, licensed salesperson should be able

to walk you through the case proceedings from start to finish.

Question #5: What precisely does the fee you are quoting me include?

The tax resolution industry is notorious for rebilling clients for work that either doesn’t need to

be done, was excessively overbilled for originally, or that should have been included in the

original fee quote.

Many tax resolution firms operate on a “flat fee” basis. In theory, the fee they quote you

should include EVERYTHING necessary to resolve your case. Make sure that fee includes

some of these necessary actions:

● All Appeals files

● Full negotiation of resolution

● Preparation of any missing 941 tax returns

● Removal of any existing liens

● Representation on the Trust Fund Recovery Penalty - This is critical to prevent getting

personally stuck with your business tax bill

● Application for a penalty abatement if you meet “reasonable cause criteria”

If the tax firm you are speaking to works on a retainer basis with hourly fees, rather than a flat

fee, be sure to see a schedule of service fees, and get a copy of their billing policy. Ask for an

estimate of what the total charges will be, and get that in writing.

Understand that hiring a representative to negotiate on your behalf is not a guarantee that your

case will be resolved. You will need to work closely with your representative to ensure that

your best interests are always held in high regard. Although your representative should do

nearly all of the interaction with the taxing authorities, your participation with your

representative is vital to the resolution process, so be sure you select somebody that you are

going to be able to work with without personality conflicts.

Special Report: “5 Questions to Ask Any Tax Resolution Firm Before Paying

Them A Dime”


Lastly, be sure that anything and everything you discuss with a tax resolution firm,

such as fees, covered services, responsibilities, deadlines, etc., are all in WRITING.

Don’t sign a contract, and definitely don’t give them your credit card number without

seeing everything in writing first. Many firms do “rewrites”. This means that after a

firm quotes and charges you for a service, they come back later saying it’s going to

cost more to finish your case. Often, at that point, you either must let them finish or

you walk away losing your money in the process.

The lesson here is to have it in writing. If it is in writing, and the company tries to

rewrite the original quote mid-case, then you’ll have a much better way of keeping

them to their word.

--------------------------------------------------------






--------------------------------------------------------


[email protected] your payroll tax resolution kit · a lien subordination is the process...

Documents