The Internal Revenue Service continues to ramp up the number of tax liens and levies it files against taxpayers, despite a high number of Americans who are unable to pay their taxes. The government agency filed liens against 1.1 million taxpayers last year, up from 168,000 in 1999.
In the past seven years, it has filed more than 5 million tax liens [Hazard, Carol. “Liens, Levies against Taxpayers Rise Sharply | Richmond Times-Dispatch.”Richmond, VA – News, Weather, Politics, Sports, Entertainment and Business Reports | Richmond Times-Dispatch. 20 Feb. 2011. Web. 02 Mar. 2011].
“The IRS is going after ANYONE who owes money, not just the wealthy”, according to National Taxpayer Advocate Nina E. Olson, who works for an independent arm of the IRS. “By filing a lien against a taxpayer with no money and no assets, the IRS often collects nothing, yet it inflicts long-term harm on the taxpayer by making it harder for him to get back on his feet when he does get a job”.
IRS Recognizes the Need to Address a Struggling Economy
“Tax collection requires a delicate balancing of the government’s interest in collecting revenue and ensuring that all taxpayers pay their fair share of tax … and protecting financially struggling taxpayers from unnecessary harm,” Olson testified.
The IRS recognizes that many taxpayers are struggling financially and is taking positive steps to settling tax debt through collection delays, payment plans and tax settlements.
The IRS has recently indicated plans to implement new procedures of the availability of payment programs to those taxpayers who may not have previously qualified, the availability of tax settlement programs to those taxpayers who may not have previously qualified, a more expeditious withdrawal of tax liens – just to name a few.
Demand for Tax Services
The demand for tax relief services has reached an all time high. Business owners whose Companies are struggling have lost their houses and savings. They can’t pay their employment taxes and they still owe money. Taxpayers may owe taxes on debt that was forgiven. Taxpayers may have lost their job or withdrawn money from their retirement accounts and owe early withdrawal penalties in addition to their regular taxes.
The IRS sends a series of notices, each getting more urgent. When the taxpayer is unresponsive, its easier to push the lien or levy buttons that trying to work with someone to set up a payment plan or debt reduction.
Taxpayers often believe they cannot afford tax relief services and try to resolve the problems themselves.
“The layperson is at a significant disadvantage dealing with the IRS”, says Mitch Helfer, CPA, Managing Partner of CPAMiami™; a Florida Certified Public Accounting Firm. Taxpayers are not familiar with debt relief programs and ultimately do not know their options or rights in dealing with the IRS. Too often, this results in paying more than you may actually owe, not applying for penalty relief, not qualifying for payment plans and not exploring settling tax debt or incorrectly applying for settling tax debt for a reduced amount.
“We are a highly-trained, experienced, certified public accounting, who deals with IRS problems on a daily basis”, says Mitch Helfer, CPA. Hiring a local, licensed CPA firm or licensed tax attorney offers taxpayers a distinct advantage over national, debt relief companies, where your case is assigned to a lower-level marketing specialist; unfamiliar with tax law, IRS policy and procedure, IRS negotiations and taxpayer rights.
In many cases you can reduce your tax debt significantly – whether this is the reduction of the penalties and interest that may have been assessed, a correction of errors or underreporting of deduction that may be available or a negotiated settlement amount of the overall tax debt. The key is to have the “right” person on your side; handling your account.