Tax Representation and Problem Resolution
Bailey Tax & Accounting has a team of Enrolled Agents who specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service.
Kenneth L. Bailey, EA is specialized in representing taxpayers who need help with back taxes due to the IRS and state tax authorities. With over a decade of experience and focus on tax resolution, there isn’t anyone who can better come to your rescue in a time of need. He is also a Fellow of the prestigious National Tax Practice Institute¹ and a Certified Tax Resolution Specialist², recognized as the foremost expert in the field of IRS representation.
The tax resolution industry is full of fly-by-night companies that will say anything to make a sale and often open and close within a few years. Those companies will promise quick solutions that they will not be able to deliver on. Bailey Tax & Accounting is different! We can offer you a comprehensive solution to your tax nightmare by a family-owned practice that has been in business over 40 years.
Stopping Wage Garnishments & Bank Levies
The IRS has the authority to take collection actions against you. This can include bank levies or wage garnishments. These actions may prevent you from paying your necessary bills and living expenses. Each has their own complexities in releasing, and Bailey Tax & Accounting has experienced professionals that specialize in getting these actions released.
A bank levy is a onetime action that seizes the balance of your bank accounts on a specific date. You only have 21 days from the date the letter was issued, or about two weeks from when you realize that your funds are missing, after considering the time it takes for mailing the levy notice and the time required by the bank to process it.
A wage garnishment is a continuous action. It will continue to take up to 100% of your net income until it is released. Once they start taking the money, those funds are not recoverable under most circumstances, so it is important to act quickly to get them released.
You may have to comply with certain requirements from the IRS before you can get a levy or garnishment released. You may be required to file delinquent returns and/or fill out a collection information statement that discloses your financial situation to the IRS. It is important to hire our company as soon as possible to allow time to for our professionals to comply with these requirements. Every day you wait is a day later that it will get released, and a higher chance that your funds will be unrecoverable or continue to be taken.
Assistance with Revenue Officers
Revenue Officers are the most active and invasive collection personnel at the IRS. A Revenue Officer is a single individual collection agent who has been assigned to your case. They are located locally to you, and they are required to make visits you your home or work. When a Revenue Officer is assigned to you case, you often will face shorter deadlines and more frequent levies and garnishments.
If a revenue officer has been assigned to your case, it is usually due to one of three possible reasons;
- The IRS has classified your account as a “high dollar” case,
- They have not been successful in collecting through other means, or
- The IRS believes you have had a history of non-compliance or tax evasion.
It is imperative that you have representation as an intermediary between you and the Revenue Officer. Anything you say to this individual can be used against you and can be a very costly mistake. Bailey Tax & Accounting will talk to the Revenue Officer so that you don’t have to, and prevent enforced collections from taking place through bank levies or wage garnishments.
Filing Missing Returns
If you intentionally do not file your returns, then you are committing a crime, and you could potentially be facing up to a year in prison or a $25,000 fine for each unfiled year. It is not a crime to owe the IRS money if you have filed a return with a balance due and are unable to pay the taxes owed. The IRS has taken a stance that collection is more important than prosecution, so they will typically try to get you to file or file a return for you if possible, rather than going through the hassle of criminal prosecution.
In many cases the IRS will file a substitute return for you if you do not do so yourself. They will file at the least favorable tax rate and not allow you the credits or deductions you deserve. If you owe money on a substitute return, then you can file the return yourself to replace it. However, the IRS will assume that you owe the amount they have assessed until your return is processed.
The expert tax preparers at Bailey Tax & Accounting will find every deduction and credit allowable under the tax code, giving you the most favorable return legally possible. We know the specific deductions allowable for your specific profession and life circumstances.
Penalty Abatements, Waivers, and Reductions
Under many circumstances, the IRS will abate penalties assessed on your account if you did not file a return or pay the tax due for a reason beyond your control. In addition, they will often abate penalties on a single year if you have had a long and ongoing history of compliance, and that year was an abnormality.
The problem is that you usually only have one chance to abate penalties for each balance owed. If you do not prepare the abatement properly, the IRS may not abate all the penalties that you rightfully deserve. It is important that you have a professional prepare the abatement(s) who has extensive experience in doing so. We know the verbiage that the IRS is looking for to abate the maximum penalties allowable.
In some circumstances, it is either required or more favorable to attempt a penalty abatement after setting up an installment agreement.
Offer in Compromise
In limited and specific situations, the IRS will accept a settlement for as little as 1% of what you owe, or “pennies on the dollar” as you may have heard on a million radio and TV advertisements. An Offer in Compromise requires that you have inadequate income and assets to pay the balance due to the IRS, and allows the IRS to accept a payoff that you can afford. The Offer in Compromise process takes extensive substantiation and can take up to a year or more to fully process an acceptable proposal.
Do not be fooled by most companies that promise an Offer in Compromise! Many companies will file an offer for individuals that do not qualify, knowing that the offer will be rejected, and then they will charge you more for additional services after the offer is rejected. Bailey Tax & Accounting will evaluate your case and see if an offer is right for you. We will not suggest an Offer in Compromise unless you really do qualify for one.
Streamline Installment Agreements
In many cases, the IRS allows a specific monthly payment depending on your balance owed. The number is set by the IRS, and they will accept any amount requested over that number with
little or no information needed to prove your financial situation. This kind of agreement will pay the balance owed in full within a six year period. This is the preferable and simpler solution if you qualify and are able to make the given payment. In addition, this method will prevent the filing of liens. A lien will be filed any time you are unable to set up a streamline agreement.
Partial Pay Installment Agreements
If you cannot afford a streamline or do not qualify, then you will be required to fill out a Collection Information Statement which requires you to disclose your financial situation to the IRS. If you do this yourself, you will inevitably pay more than you have to. Our professionals understand that the IRS has allowable amounts for various expenses based on where you live. These allowable amounts can be used to reduce the amount available on paper for the IRS to collect each month as an installment agreement. These agreements are based fully on your net expendable income after all allowable expenses and they will require you to pay whatever the statement shows you can pay. That is why it is important to have Bailey Tax & Accounting use our expertise in setting up installment agreements to your advantage. We will get you the lowest payment possible.
If you are unable to make a monthly payment, and the Collection Information Statement shows that your expenses are greater than you income, then you may qualify for a Currently Non-Collectable status. This means that you will not have to make payments for a duration of time. This is a temporary status and can last anywhere from one to four years before you have to start making payments or fill out a new statement showing that you still qualify for that status. It is important to note that this status does not eliminate the balance due, but defers required payments on that debt. If you have an increase in income, or sell property or investments, they may require you to start making payments or remit the proceeds from a sale to be applied to your outstanding tax debt.
Tax Lien Negotiations
Tax liens are a normal course of business for the IRS when you owe taxes for an extended period of time. Liens are filed to protect the interest of the government. They negatively affect your ability to borrow money or sell property. Unless you qualify for a streamline agreement, or owe
under $10,000, a tax lien will be filed and will only be released in a handful of circumstances. Many companies buy lists of tax liens that are filed because a lien is the only matter of public record that you have some issue with the IRS or state authorities. They use these lists to contact potential clients, and often are misleading about what a tax lien means in order to win over business.
Find out the truths about Tax Liens here.
Continued Support and Help Understanding Taxes
Bailey Tax & Accounting will make sure that you know what to do, even after you have a resolution in place. We will ensure that you go away more knowledgeable than before and that all your questions have been answered.
We will set you up with a reasonable solution to your current liability and enough knowledge to keep you out of that situation in the future. One way we do that is through continued annual bookkeeping, accounting, and tax preparation at a reasonable fee.
Often times businesses will get behind on their income or payroll taxes for reasons beyond their control. It is important to understand that the liabilities can be assessed to you personally and will not just go away if a business is closed.
Bailey Tax & Accounting can help you get your business back on track with the IRS and state taxing authorities. We will set up a reasonable payment plan and advise you on how to keep up with current and future liabilities so you don’t fall behind again.
Bailey Tax & Accounting has a team of accountants that can help you set up an accounting system so that you will know where your business is every month, and know how much you should be setting aside for taxes so that you don’t owe at the end of the year.
Entity Structuring for Tax Minimization and Asset Protection
In many situations, a different business structure could be better for you. Bailey Tax & Accounting will help advise you on what kind of entity could minimize your taxes and protect your assets best. Every business situation is different, and there is no specific solution that is good for every business. Let our professionals evaluate your business and offer advice on what entity you should be using.
IRS & State Audit Representation
The IRS can conduct three kinds of audits; Correspondence, In-Office, and Field Audits. All three are very similar in structure and outcome, but vary in length of time and depth. The purpose of an Audit is to assess additional tax over that reported. The IRS is prepared for the audit and knows how to corner you into accepting the reality that they present. In an audit, the IRS has the advantage because the taxpayer bears the burden of proof. In other words, they are right until you prove otherwise.
Correspondence Audits (or Mail Audits) are favorable because they usually look into fewer potential issues, and you have more time to prepare the proof for each alleged change. This is the longest of the three types of audit because there is the time allowed for response and mailing. Some mail audits can drag out for many months. Representation is beneficial so that you don’t have to worry about what is going to happen, and it will give you peace of mind over the course of the audit.
In-Office Audits usually only last a day, but you are required to come prepared. They give you a list of issues, and give you a couple weeks to prepare your proof. The problem is that they take place at an IRS office. This can be very stressful for you if you are not fully prepared and don’t have proper representation. If you forget a single piece of paper or say the wrong thing, it can be a several thousand dollar mistake.
Field Examinations are the most intrusive because they usually take place at your home or place of business. It allows the most freedom for the auditor to examine more issues in depth and create the largest additions to your balance due. If you have representation, they can go to your representative’s office and conduct the audit there, keeping them out of your home or office, and away from additional records that can use against you. These audits usually last anywhere from a single day, and last up to a week or two.
IT IS IMPORTANT THAT YOU HAVE REPRESENTATION! Audits with representation tend to assess less tax than if you were to handle it yourself. In most cases, hiring someone to represent you will more than pay for itself based on the amount of taxes, penalties, and interest that you will save. The IRS will assess either a 20% penalty for negligence in filing, or a 75% penalty for what it considers fraud or intent in underreporting the tax you owe. They assess more 75% penalties in self-conducted audits, versus those that hire representation to articulate that based on tax law the higher penalty is not merited.
1. Fellow of the National Tax Practice Institute: Awarded by the National Association of Enrolled Agents (NAEA), obtaining the NTPI Fellow designation is a multi-year process and evidence of significant expertise in the representation of taxpayers before the IRS. What is an NTPI Fellow?
2. Certified Tax Resolution Specialist: Awarded by the American Society of Tax Problem Solvers (ASTPS), a CTRS is required to be able to secure Offers in Compromise, Installment Agreements, Penalty Abatements, Release of Liens or Levies, and handle Non-Filer issues. What is a CTRS?