Frequently Asked Questions

Yes, the IRS can and does levy social security income. Typically, 15% of your check. In some extreme cases, the IRS can levy 100%.

Report of Foreign Bank and Financial Accounts (FBAR) is now known as FinCEN. It is an annual report that is filed to disclose any foreign interest and/or assets. This includes bank accounts, brokerage accounts, mutual funds, trusts or other type of foreign financial account.

An Offer In Compromise is an offer to resolve your IRS tax problems.

The Collection Statute Expiration Date (CSED) is the date after which the IRS can no longer collect tax from you. It is typically 10 years following the date the tax was assessed. The tax must be assessed before the CSED starts. So, if you did not file a 2012 tax return until 2014, the 10 years will not begin until 2014. Certain events can prolong the CSED.

Currently Not Collectible (CNC) is essentially a IRS hardship status. You owe the IRS a certain amount of money, but you have no way of paying it. The IRS has checked your assets and your monthly income and expenses. This can be temporary and is often subject to review every couple years.

A transcript analysis is a detailed review of your tax history. Including, but not limited to: balances, payments, penalties, interest, CSED, etc.

If you cannot afford to pay the amount on the notice, don’t worry. There are other options. You can get more time, get a payment plan, or potentially qualify for a settlement. First thing to do is contact a professional to get a free analysis. They can tell you how urgent it is and what you need to do.

There are a number of ways to have the IRS issue a release of levy to your employer. Namely, there are 3 ways:

1. Levy issued in Error – if the IRS has erroneously issued the levy, then contacting the department that issued the levy to let them know should yield a release. Be careful when contacting the IRS.
2. Alternative Resolution – if the levy is justified, then you can set up an alternative resolution, such as a payment plan, then get a release faxed to your employer.
3. Hardship – if you can show that not having your full income paid is causing a hardship, then the IRS may release the levy. Unfortunately, your definition of hardship and the IRS’ may be different. This means you need to make sure you know what the IRS limits are on certain expenses. For example, you may pay $3,400 per month for rent, but the IRS may only allow $2,600 in your County. These discrepancies can yield a non-hardship result for the IRS even though you are paying that total.

Yes, but not without ample warning. It takes a lot for the IRS to resort to seizing your home. The IRS does not want to make people homeless or uproot American lives. They will do so in cases where there is no alternative action. The fastest ways to get your house seized are ignoring the IRS and/or continuing to add to the problem year after year.

Many individuals prepare their tax return and realize that they have a tax balance. Unfortunately, it is a larger amount than expected. What do you do? File the return. If you do not file the return, you will get hit with extra penalties for failure to file. At least by filing you can avoid that penalty.

The IRS has many options for repayment of the tax balance. Depending on how much you owe this can be quick and easy or a bit more detailed, but a very manageable process. You may qualify for some of the IRS streamlined programs, which depends on how much you owe and how much you are willing to pay. Alternatively, you may have to provide a financial statement to show what you can afford to pay monthly.

The streamlined programs are much easier to navigate. Non-streamline programs requiring a financial statement can get problematic. That is a situation requiring assistance from a tax professional.

Yes, the IRS may remove penalties. Typically, either for prior good history or if you can establish reasonable cause (illness, disaster, divorce, etc.).