Tax Penalty Attorney
Explore options for reducing or removing IRS and New York State tax penalties with guidance from an experienced tax attorney and CPA.
Have You Been Hit with Tax Penalties?
Our Experienced Tax Penalty Lawyer Can Advise You Whether You Qualify to Have Them Reduced or Removed.
The Internal Revenue Service (IRS) and state tax authorities can penalize taxpayers who do not pay their taxes on time or file their tax returns on time. These penalties can be very expensive and make it even more difficult to get out from under tax debt. Fortunately for taxpayers, under some circumstances tax agencies allow penalties to be reduced or removed altogether. Whether you may qualify to have the amount you owe in penalties decreased or waived depends upon your unique tax situation. Our experienced tax penalty attorney at Timothy S. Hart Law Group, P.C., can help you understand your possible options for penalty relief.
Contact Timothy S. Hart for a Free Consultation
To learn whether you may be able to have tax penalties reduced or eliminated, contact tax penalty attorney Timothy S. Hart to arrange a free consultation. Call our Albany office at (518) 213-3445 or our New York City office at (917) 382-5142 today. Timothy S. Hart is licensed to handle IRS issues in every state in the country and can help with your New York State tax problems. Don't wait when penalties and interest owed to the IRS or state are continuing to add up—get help today.
Methods for Getting Tax Penalty Relief
There are a few methods for having penalties reduced or waived by the IRS. They include obtaining a first-time penalty abatement, demonstrating reasonable cause or getting a statutory exception.
First-Time Abatement Administrative Waiver
As the name implies, this abatement method is for individuals and businesses who have never had a tax penalty before. The first-time penalty abatement waiver requires that you paid all your taxes on time for the three years prior to the tax year for which you were penalized and that you filed all of your returns on time. If this is the case for you, the IRS will normally remove the tax penalty because you have demonstrated that the issue was a one-time event and not a pattern. While the first-time abatement is the most common administrative waiver, there are other types that could potentially apply for some taxpayers.
Reasonable Cause
In general, to demonstrate reasonable cause you would have to show that you took ordinary and reasonable steps to follow the rules and file and pay your taxes on time, but something outside of your control made that impossible. Reasonable cause is very subjective and takes into account the unique situation of the taxpayer.
Some examples of what may be considered reasonable cause for having a penalty abated include disasters such as fire and flood, death or serious illness in the family, riots and other civil disturbances, or even technical problems with the e-filing system that delayed processing. If you made a mistake on your taxes and were penalized, you may be able to get penalty relief depending on the specific reason for the error.
If you believe you have reasonable cause to have a tax penalty abated, it is important the reason is developed to put it into the best light to prove you were being reasonable under the circumstances.
Statutory Exception
Tax law also allows for statutory exceptions to penalties. Penalties may be waived for these reasons:
- You lived in an area that was declared a federal disaster zone.
- You were serving in a combat zone as a service member or a civilian.
- Your return was e-filed on time or mailed on time through the U.S. Postal Service or using specific DHL Express, FedEx or UPS services.
- You asked for information from the IRS, received written information that was wrong and relied on the incorrect information.
You can read more about statutory exceptions in the IRS Penalty Handbook.
Automatic COVID Tax Penalty Relief
Additionally, as announced in August 2022, the IRS is providing tax penalty relief related to the COVID-19 pandemic for certain 2019 and 2020 returns. Refunds for penalties already paid or abatement of unpaid penalties is automatic, so you do not have to apply. If you feel you were due a refund or abatement because of COVID-19 issues and did not receive one, Timothy S. Hart can review your situation and advise you about your options.
Appealing a Negative Penalty Relief Decision
If you have already applied for relief from a tax penalty and received written notice that you were denied, you may be able to appeal the decision. You have 30 days from the date on your notice to file an appeal, and there are certain criteria you will have to meet in order to be eligible to appeal.
Get Help Today with Tax Penalties
When you don't have the money to pay your taxes, having additional penalties slapped on top of the debt you already owe can make a difficult financial situation seem hopeless. With the help of a highly skilled attorney who has assisted many taxpayers in having penalties reduced or removed, you could greatly improve your tax situation. Tax penalty attorney Timothy S. Hart has years of experience resolving tax penalties and negotiating tax settlement plans that help taxpayers get out from under the burden of IRS tax debt. To speak with him in a free consultation, call one of our offices today. To reach our NYC office call (917) 382-5142. Call (518) 213-3445 for our Albany office. The New York Department of Taxation and Finance has similar relief options for NYS penalties that our NY tax attorney can advise you about.
Why You Should Choose Tax Penalty Lawyer Timothy S. Hart
Timothy S. Hart is both an accomplished tax attorney and a skilled Certified Public Accountant, which provides him well-honed insight into federal tax laws and in-depth understanding of how the IRS operates and the authority that agents have to eliminate tax penalties. He is licensed to practice before the IRS in all 50 states, so he can help you no matter where you live. He is also licensed to handle New York State tax matters. With his extensive background, Timothy S. Hart offers a comprehensive range of tax resolution legal services tailored to meet the unique needs of his clients. His commitment to achieving favorable outcomes is evident in his meticulous approach to each case, ensuring that clients receive personalized attention and expert guidance throughout the process. By leveraging his vast experience, he effectively navigates complex tax situations to secure the best possible results for those in need of assistance.
When you trust Timothy S. Hart with your request to have your tax penalties abated, you will receive responsive service and straightforward guidance to your problem. He will work extremely hard for you and will make the strongest case possible to the IRS on your behalf. He can also assist you in potentially seeking a tax settlement plan with the IRS or a tax payment installment agreement to further help alleviate your tax debt. You will never be left feeling confused or unclear about your options. You can count on our attorney to be there to answer your questions and alleviate your fears about facing tax penalties from the IRS. In addition, Timothy S. Hart brings valuable expertise in understanding IRS tax appeals process, ensuring that you are well-informed about each step involved. His dedication to advocating for your rights means you can confidently navigate through complexities, armed with a clear understanding of your options. With his support, you can approach each phase of your case with assurance, knowing you have a knowledgeable ally by your side.
Reasons that Tax Penalties Are Imposed
There are several reasons for tax penalties. Some of them are:
- Paying late and unfiled returns. Both the IRS and states charge a harsher penalty for not filing a tax return than they do for not paying the tax. Therefore, it is important to file your tax returns on time to help minimize penalties, even if you do not have the money to pay the taxes owed. When you file, you can apply to pay the tax through an installment plan or potentially an offer-in-compromise debt settlement that reduces the amount of tax you owe.
- Filing inaccurate returns. If you file an inaccurate return that takes deductions you aren't qualified to take or underreports how much money you make and results in your paying less than you really owe in taxes, you could face penalties. If done by mistake, you may be able to get relief for reasonable cause depending on the error and circumstances. When people file inaccurate returns intentionally to avoid paying higher taxes, they may be guilty of tax fraud, which in addition to high penalties may also result in jail time in some circumstances. Penalties for underreporting income by $100,000, which is an extreme example but does happen, can lead to a fine of 75% of the unreported amount or $75,000, plus interest on that amount.
- Not paying enough in estimated payments or tax withholding. Small businesses that do not pay enough tax during the year through estimated tax payments may be subject to underpayment penalties. This is also true of individuals who do not have enough tax withheld.
- Failing to pay employee taxes to the IRS. Businesses with employees may also be subject to an expensive trust fund tax penalty, also called a trust fund recovery penalty, if they knowingly fail to pay withheld employee taxes to the IRS.
Sometimes a combination of tax issues can result in penalties. And if issues are not resolved, penalties and interest will keep adding up, making tax burdens even larger. Whatever the reason you have been assessed a tax penalty, attorney Timothy S. Hart will pursue the best outcome for you based upon your unique circumstances.
How You Can Reduce Tax Penalties and Interest
First, do not be afraid to communicate with the IRS. If you are told that you are being assessed a penalty and you believe it is unfair, gather the evidence that supports your position and file a written request for penalty abatement. Be sure it is in writing so you have hard proof that you made the request. We can guide you through this step, including advising you about how best to present your evidence and then filing the request for you. In your request, clearly explain the reasons why you did not file your tax returns, why you paid late or why the other issue occurred that led to the tax penalty.
IRS agents are tasked with the job of collecting unpaid taxes, but they are also human. When you have a compelling reason as to why the issue occurred that led to your being penalized, the IRS agent may reasonably consider your situation and work with you by reducing or erasing your tax penalty.
If your request for penalty abatement is unsuccessful, consider appealing the decision. Our attorney can assist you with the appeal.
When is an Offer In Compromise a means for penalty relief?
I had a recent client that owed about $30,000 to the NYS Tax Department. The taxes related to late filed income tax returns for a few years, where he sold a sizable asset. We went through the normal procedure of filing the unfiled tax returns, and once the tax assessments were received we attempted to get the penalties abated. It was somewhat hopeless (to be honest). I felt bad since the client only makes about $20,000 a year in income so the penalty relief would have been very helpful to him. The Tax Department was very willing to listen, but they never granted any meaningful relief. Despite our efforts, the client's financial situation remained precarious, which was disheartening given his limited means. I advised him to explore options for tax evasion legal representation, as this could provide him with guidance on navigating his circumstances and potentially mitigating the consequences he faced. It was crucial for him to understand his rights and the possible avenues available to alleviate his tax burden.
Then I had an idea. The client owned a piece of real estate that made him clearly solvent (assets greater than liabilities). One requirement, or method, of qualifying for an offer in compromise in NYS is that your insolvent (liabilities greater than assets). However, that said, the offer in compromise group is more willing than the NYS collections group to see the realty of a persons financial ability to pay, and in my case a person who owes more than one years worth of gross income is going to find it very hard to pay back the debt. I submitted an offer in compromise even though I knew it would be rejected since he did not qualify, but I had a hunch. The Tax Department called me to reject the offer, as I expected, but to my "surprise" agreed to remove all the penalties. The outcome was all that I could have hoped for.
Conclusion
There are means to reduce the penalties assessed as described above. To head off more penalties and interest charges, pay off any back taxes you owe as soon as possible. Penalties and interest will keep accruing even if you have an installment agreement, unless you are able to negotiate otherwise, but you will pay a reduced penalty rate if you filed your tax return on time.
Frequently Asked Questions About Tax Penalty Attorney
Answers to common questions about tax penalty relief, available options, and working with an experienced tax attorney.
In some cases, yes. Exchanging one digital asset for another or using cryptocurrency to pay for goods or services can be a taxable disposition. Merely holding a digital asset or moving it between wallets you own generally is not taxable, although paying a transfer fee with digital assets can create a reportable transaction.
Form 1099-DA reports certain digital-asset sales or dispositions to taxpayers and the IRS. Broker gross-proceeds reporting generally began for transactions on or after January 1, 2025. Basis reporting is phased in for certain transactions on or after January 1, 2026. You remain responsible for reporting taxable digital-asset income, gains, and losses whether or not you receive the form.
Missing records do not remove the reporting obligation. A tax professional may be able to reconstruct transaction history from exchange exports, wallet records, blockchain data, bank records, and prior returns, then document reasonable basis and gain-or-loss calculations using the available evidence.
Most reporting problems are handled through civil tax procedures, additional tax, interest, and possible penalties. Criminal exposure generally requires evidence of willful conduct, such as intentional tax evasion or filing a false return. The outcome depends on the facts, so seek legal advice promptly if you are concerned about willfulness or an investigation.
This is a hardship designation that the IRS gives to applicants who cannot afford to pay their tax debt without suffering significant financial hardship. It pauses collection activity while the taxpayer cannot pay.
Yes. Taxpayers often use both of these terms, but they are the same type of relief.
Generally, the IRS pauses enforced collection while an account remains in hardship-based Currently Not Collectible status, and an active wage levy may need to be released. Refund offsets, lien filings, interest, and penalties can still apply.
Yes. While you are in Currently Not Collectible status, penalties and interest continue to accrue.
The IRS may periodically request documentation of your financial status. As long as you qualify for Currently Not Collectible status, the IRS will continue to pause collection efforts.
Revenue officers typically do not visit without warning, but there
are limited exceptions. They may visit your home or business to serve
summonses, assess your assets, or force communication if you have been
ignoring their attempts to reach you.
No, officers collect. Revenue agents handle IRS audits. But our firm
can help you deal with both revenue
officers and agents.
Yes. The IRS (and by extension, revenue officers) has the right to
levy accounts, seize assets, and pursue aggressive collection actions if
voluntary payment is not secured. They can't take away your state
business licenses, but they can strip all your assets so you can't
operate.
Ignoring a revenue officer is generally the worst way to handle this
situation. They may move forward with aggressive enforcement actions,
including seizing the funds in your bank account, garnishing your wages,
and seizing other assets. If you respond in a timely manner, you may be
able to negotiate a more beneficial solution.
Yes, and for many taxpayers, this is one of the main benefits of
retaining an attorney. They can avoid the stress of communicating
directly with the IRS.
The DTF generally starts by issuing notices and assessing penalties. If the notices do not result in payment or resolution, the DTF may pursue enforced collection through garnishment, levies, tax warrants, and other actions.
Yes. The DTF has legal authority to garnish wages, levy bank accounts, and seize assets in certain situations.
New York generally has a 20-year statute of limitations to collect tax debt, which is significantly longer than the IRS collection period in many federal tax cases.
In some cases, the Department of Taxation and Finance may accept an offer in compromise. However, strict eligibility requirements apply.
A tax warrant acts as a civil judgment and perfected lien on a taxpayer’s property. It protects the state’s interest in collecting the unpaid tax debt.
Yes, a tax lien is a bad thing. A tax lien is put in place to help ensure that the IRS can collect your tax debt. It gives them first claim to your property over other creditors. Should you not pay the taxes you owe or make debt settlement arrangements with the IRS, your home or other property that has a lien on it may be levied. A levy is when the IRS seizes your property. State governments, including New York State, can also file tax liens for nonpayment of taxes. People with seriously delinquent tax debt who have had federal liens filed and levies issued may have their passports revoked or denied.
The consequences of a tax lien are serious. A tax lien can be attached to almost all property, such as real estate, personal property, cash, stocks, vehicles and even future acquired assets. It can affect your ability to sell your home or other property. If you file for bankruptcy, the tax lien will often continue and be a valid issue that is not extinguished in the bankruptcy.
In the past, tax liens were also reported on consumer credit reports, which could negatively impact credit scores. This changed in 2017 with an agreement between consumer credit reporting bureaus to remove tax liens from reports. However, businesses with tax liens against property and assets may still have negative consequences to their credit scores.
How long the IRS can have a lien on you depends upon the circumstances. If you pay off your taxes, the lien will be removed within 30 days of payment. If the IRS accepts an installment repayment plan, it may remove the lien within 30 days. If you don't pay your debt, the general statute of limitations on IRS collections is 10 years.
There are limited methods to get an IRS tax lien removed if you cannot pay your debt in full. If the tax amount you owe can be reduced to below $25,000, and a direct debit payment plan has been established, the IRS will typically agree to remove the notice filing within 30 days, as long as all your tax returns are filed. Other methods that may enable you to get the tax lien removed include an offer in compromise if accepted by the IRS. Our attorney will explain possible options for getting a tax lien removed when he learns about your situation.
A tax lien withdrawal can happen after the tax lien has been released. A withdrawal is where the IRS agrees to remove the tax lien notice filing from the public records.
A protest is a written request asking the IRS to send a disputed matter to Appeals. Depending on the case, the protest may need to list the disputed issues, identify the tax periods, explain the facts, state the legal reasons for disagreement, include supporting documents, and be signed under penalties of perjury. The IRS letter usually explains whether a formal written protest, small case request, or specific appeal form is required.
Generally, no. The IRS instructs taxpayers to send the protest to the address listed in the letter that provides appeal rights. The IRS office that made the decision usually reviews the protest first and then forwards the case to Appeals if the dispute is not resolved. Sending a protest directly to Appeals can delay the case and may create procedural problems.
Yes, settlement is a central function of Appeals. Appeals may consider the facts, documents, law, litigation risk, collection alternatives, and practical resolution of the dispute. A settlement may involve compromise on liability, penalties, collection terms, or other disputed issues. Settlement is not guaranteed, and the strength of the presentation matters.
Your options depend on the type of case and the notice you receive. Some cases may proceed to the United States Tax Court, while others may require payment and a refund claim before litigation. Collection Due Process cases may preserve Tax Court review if the hearing request was timely. Because court rights are deadline-sensitive, it is important to review the Appeals outcome promptly.
Yes, if the IRS rejects an offer in compromise, the rejection letter generally explains appeal rights and the deadline. The appeal should address the specific reason for rejection and may require updated financial documents, corrected calculations, or arguments about special circumstances. Visit our page on offers in compromise for more information about tax debt settlement options.
A federal tax lien attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
Seek help promptly after receiving a notice, learning of a filing problem, or facing a deadline or collection threat. Early action generally preserves more time to evaluate the available options.
Gather the relevant tax returns, agency notices, account transcripts, prior correspondence, payment records, and financial documents. The exact records needed depend on the issue.
The available response depends on the facts. It may involve correcting filings, responding to an agency, requesting an appeal, arranging payment, pursuing a settlement, or seeking court review when applicable.
Timothy S. Hart is both a tax attorney and a CPA. That combined legal and financial perspective can help identify the issues, evaluate practical options, and communicate with tax authorities on the client’s behalf.
The IRS pays out refunds to taxpayers every year. There are some instances in which taxpayers who neglected to file their returns for various reasons are owed refunds. However, in order to get a refund for over-paying on taxes, you first have to file your return. Though it is impossible to predict whether you will owe an amount or get a refund on your return, you must prepare and file to be certain. You may be entitled to tax credits and deductions that could help reduce your taxes. Taxpayers have the right to refunds for previously unfiled tax returns as long as they file within the three-year statute of limitations from the date the return was due.
You can see that if you fail to file your tax returns, there could be several negative effects. You could pay a lot more money to the IRS by not filing on time once penalties and interest are factored in. Besides the financial impacts, you could also expose yourself to criminal prosecution. And if you neglected to file and were owed money, you could forfeit your tax refund. Do not let the problem of unfiled tax returns linger any longer. Turn to Timothy S. Hart for assistance today.
You should recognize that the problem of your unfiled taxes will not go away and take the initiative to begin resolving the problem. If you do not and the IRS begins an investigation, you could face criminal charges. It is smart to start addressing the problem with the help of an experienced tax attorney. We will complete your unfiled returns to make sure they are accurate and file them with the IRS and the state. We will communicate with tax agencies for you. Our tax lawyer will negotiate with the IRS to arrange a workable solution for you to be able to meet your back tax obligation.
There is a general 10-year statute of limitations for collecting on an unpaid return. But the clock begins running when the IRS determines that you owe taxes and files a return for you or takes other action, or when you file the return, not when you miss the deadline for filing for that tax year. However, if your period of non-filing is longer than six years, we can often negotiate a resolution requiring that only the last six years’ returns need to be filed.
You resolve unfiled tax returns by facing the problem head on, not by ignoring it. To start the process, gather all the documentation and data you have available for the year or years you have not filed. If you are missing information, our unfiled tax returns attorney can assist you in collecting it. Usually, if you voluntarily file your past-due returns, our attorney will be able to negotiate a payment plan over time or an offer-in-compromise that reduces your taxes owed.
When you have many years of unfiled taxes, the financial and legal implications grow more complex. If you owed taxes on some or all of those years, you will now probably owe a large amount more because of penalties and interest. You might also be facing a criminal investigation if you have let your tax filings lapse for many years. When you have years of unfiled taxes, get assistance from an attorney who will help file your returns, including collecting lost and forgotten filing information, and work to negotiate a solution for paying your taxes.
Yes. You can appeal the denial if you disagree. To appeal, you will fill out another complex form (Form 13711, Request for Appeal of Offer in Compromise). However, this can be a very complicated and lengthy process. You may get frustrated while completing the formalities of this procedure, which is where our attorney Timothy S. Hart can help. Call today to arrange a free consultation about applying for an offer in compromise or getting help with the appeals process if your initial application was denied.
In addition to the payments you make with your offer, you must pay a non-refundable application fee for the amount shown on Form 656. Most recently, it is $205. You must pay the fee for each Form 656 submitted. If you meet certain low-income guidelines, or are filing based on doubt as to liability, you do not have to pay the application fee.
If you hire an offer in compromise tax lawyer, you will also pay an attorney fee. While you may want to save the money by not getting professional assistance, it can be to your great benefit to consult with a skillful tax attorney. Should you file on your own and leave out needed information or make other errors, your application may very well be returned for more documentation or be denied completely. In the event of rejection of your OIC application by the IRS, you can't reapply for the same year.
There are many payment options, but they all are variations of a lump sum cash option or a periodic payment option. The lump sum cash option requires that you submit an initial payment of 20% of your offer amount with your application. You then wait until you receive a written acceptance of your offer and then you pay the remaining balance of the offer amount.
The periodic payment option requires you to submit your initial payment with your application and continue to pay the remaining balance monthly while the IRS considers your offer. If your offer is accepted, you would continue to pay monthly until the balance is paid in full. There are additional options as well. As long as you live up to your end of the agreement, your payments will not change once your offer is accepted.
What is a good offer in compromise depends upon your case. In general, the IRS will typically accept an offer when, based upon the evidence submitted...
- The government is unlikely to collect the liability owed in full
- And the amount offered equals at least the amount that the IRS calculates it can collect from the taxpayer's 1) equity in assets such as bank accounts and other property and 2) disposable monthly income over the statutory collection period.
This determination is often referred to as the "reasonable collection potential." If your offer is too low and does not meet the reasonable collection potential, you could find your application rejected outright. Our tax attorney Timothy S. Hart, who understands the formula the IRS uses in calculating what is reasonable, can help you determine what you can afford to pay and what the IRS (or state) will accept and file the application on your behalf.
The IRS offer in compromise application filing process involves several forms that must be accurately completed. They include the following:
- Form 656, Offer in Compromise. This form is for individual and business tax debt. If you have both that you are seeking an OIC for, you will need to fill out separate forms for each. The form also contains a section where you explain your circumstances and why you should be considered for an offer
- Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individual
- Form 443-B, Collection Information Statement for Businesses]
- A non-refundable application fee of $205
- A non-refundable initial payment for each Form 656 (as needed)
For paying the application fee and initial payment for the form 656, you will get certain payment options that are Lump Sum Cash and Periodic Payment plans. You can choose any of these two payment methods as per your financial ability. Typically, the quicker you can pay the better the discount.
You will also have to submit the comprehensive details of all your income, expenditures, income sources, assets, and equity for documentation purposes. While there are instructions for filling out these forms, it is highly recommended that you seek the advice of a tax attorney familiar with the offer in compromise filing process to assist you.
The IRS will evaluate your application. If they accept your offer, the tax debt settlement process will begin. The IRS and you will come to an agreement of what maximum percentage of tax debt you can afford to pay to the IRS.
For a New York State offer in compromise, there are also complex application forms to fill out (DTF-5, DTF-4 and DTF-4.1) and documentation to provide, including copies of federal tax returns, bank account statements, retirement account statements, a credit report and other supporting information.
Even if you don't think you have enough money to pay your tax liability, it is crucial that you still file your returns. Timothy S. Hart can help guide you in this situation and will negotiate with the IRS or NYS to try and find a payment plan that may work for you. If the IRS believes you are not financially capable of making any payments at the present time, they will not accept the payment plan and may delay collecting taxes from you until you are in better financial health.
Yes. There are situations in which the IRS may not agree to a payment plan. If the taxpayer defaulted on a past installment agreement or provided financial or other information that wasn't true, they may be turned down for a tax payment plan. Or if the IRS, after reviewing the taxpayer's income and expenses, believes that some of the expenses are non-essential, the installment agreement proposal may be turned down. If this has happened to you, reach out to our tax attorney who may be able to negotiate with the IRS on your behalf or counsel you about other potential tax relief options.
Interest continues to accrue on the diminishing unpaid balance of tax debt until it is paid off. Interest on unpaid debt and penalties for late or non-payment can add up to as much as 10% per year. Our tax attorney may be able to negotiate a reduction or waiver of interest and/or penalties depending upon the circumstances, in order to get you the lowest monthly payment possible.
You do not have to work with an attorney to apply for a tax payment plan with the IRS or state. You can contact the tax agency directly and handle the process on your own. However, because tax laws are so complex and ever-changing, by working with a skilled tax attorney who has in-depth understanding of federal and NYS tax laws, you increase your chances of negotiating a more favorable installment agreement. A tax lawyer is especially beneficial if you owe a large amount of tax debt, have unfiled returns, had an existing installment agreement on which you have defaulted or have a lien against you or are being threatened with a levy.
Our attorney knows how stressful it is to owe the IRS money. Timothy S. Hart wants to help you get a tax payment plan that is workable for your individual situation. Contact us today for a free consultation.
A tax payment plan attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
If your offer in compromise is rejected, you have the right to appeal the decision but must do so within 30 days of the date on the rejection letter. If you were turned down and you are not already working with an attorney, it is very important at this stage to get legal help for your appeal. Your appeal is your chance to change the rejection to an approval, and you stand a better chance of doing that and getting the tax settlement help you need with a skilled attorney at your side. Call Timothy S. Hart in Albany at (518) 213-3445 or NYC at (917) 382-5142 to schedule a free, no-obligation consultation.
Yes—you can still apply for a payment installment plan if you were rejected for an OIC. Our attorney will work hard to negotiate a payment plan that is realistic for your financial situation.
There are situations in which the IRS may not agree to a tax payment installment plan. These generally apply in cases where taxpayers have signed installment agreements and then not made their payments or were late in making payments. If incorrect financial information was provided, taxpayers may be turned down for installment plans. In other cases, the IRS, after examining a person's financial records, may determine that some expenses are not essential and turn down installment proposals.
Our tax settlement attorney knows how stressful it is to owe the IRS money. Attorney Timothy S. Hart wants to help you discover an IRS settlement program that is workable for your individual situation. Contact our law firm today for a free consultation.
A tax settlement attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
Seek help promptly after receiving a notice, learning of a filing problem, or facing a deadline or collection threat. Early action generally preserves more time to evaluate the available options.
Because of the almost unlimited timeline of when tax records could potentially prove to be useful, it is always best to keep your tax records for life. Yes, it does sound like a long time -- and it is -- but it is even more painful trying to prove some fact to the IRS when you do not have the tax records available. Our attorney Timothy S. Hart represented a client who was audited in 2012 and was asked for tax documents going back to the 1980s. The client had saved the records and was able to produce them, resulting in our tax audit attorney's winning the client's case and saving them a lot of money.
There are also viable non-tax reasons to keep the records. The Form W-2 (your wage statement) can be used to verify that the Social Security Administration has the correct earnings records for you.
For a good explanation of how long to keep records, read IRS publication 552, “Record Keeping for Individuals.”
The IRS typically audits returns filed within the previous three years. They may go back six or more years if they find substantial issues. New York State follows the same general timeline for audits.
The IRS only notifies taxpayers of audit by mail. The notification letter may arrive by certified mail or regular mail. It will contain your full name spelled correctly and your social security number or tax identification number, and it has legitimate contact information for responding to the IRS.
You will not be notified of an audit over the telephone or in an email. If you receive notifications such as these saying you are being audited, it is almost certainly a scam. The scammer may try to use scare tactics to get you to pay them money right away. While being notified about a legitimate audit can provoke anxiety, the IRS and state tax authorities do not demand money over the telephone or via email and do not use scare tactics.
How long an audit takes depends upon the type of audit, reason for the audit and the complexity of the issues involved with individual returns. The availability of information requested in the audit can influence the time it takes, as can scheduling conflicts of the parties involved. If audits are appealed, that adds to the length of the process. The process may take just a few months or much longer, especially if tax authorities find relevant concerns that require them to go back to previous years' returns.
A tax audit attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
The same general payroll tax payments and tax return filing requirements apply to all active employers with employees. These withholding, payment and filing requirements apply whether you operate a corporation, limited liability company, partnership, or sole proprietorship. If you have one employee or 100, you must file payroll taxes.
Audits may be conducted by mail or in person. You might be asked about specific things the auditor wants to have addressed, or the IRS may do an in-depth examination of your business, which could include reviewing how you classify employees, interviewing employees, and looking at several years of payroll records and tax filings to discover whether you were compliant. The audit will conclude with no change to tax liability, meaning all the issues were addressed to the auditor’s satisfaction, or with a change you agree to or a disputed change. If you dispute the change, you may be able to file an appeal. Attorney Timothy S. Hart will advocate for you throughout audit proceedings and negotiate with the IRS on behalf of your business.
Any errors or inconsistencies in filing or paying payroll taxes may cause your business to be audited. Failing to file payroll taxes, inconsistently filing, or paying late, deducting the wrong amount from employee paychecks, and even making math errors in returns may flag a payroll tax audit. Sometimes, according to the IRS, a business return may be selected for audit if the taxes of a business partner with whom you had transactions are being audited. And in some cases, business returns are randomly selected for audit based on a statistical IRS formula. If you have received an audit notice from the IRS, reach out to a payroll tax lawyer who will represent your interests during the audit process.
As tax-exempt organizations, non-profits are typically exempt from federal taxes, sales tax, and property taxes. However, if your non-profit has paid employees on staff, you must withhold employee income taxes, social security and Medicare taxes and pay your portion of the latter two, just as for-profit businesses are required to do. If you have further questions about non-profits and tax responsibilities, reach out to Timothy S. Hart at our Albany office at (518) 213-3445 or New York location at (917) 382-5142.
A payroll tax lawyer can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
Your own actions can determine what happens if you have back taxes. In other words, if you take action to get back taxes paid, you can reduce or avoid penalties and negative consequences. If you ignore the IRS's notices and do not take action, back taxes legal problems and significant fines can begin piling up.
Taxes that were unpaid in the year that they were due are considered back taxes. Taxpayers can owe federal, state, or local back taxes. Just because back taxes are unpaid or old does not mean that they will go away on their own.
If you owe back taxes, whether it's a couple of years' worth or more than a decade's worth, you can still file these taxes and begin making payments. There is no real limit on how many years of back taxes you can file. The longer the taxes go unpaid and unfiled, the greater the penalties and interest can become. So, it's in everyone's best interests that you manage and pay back taxes.
You may be wondering, will back taxes be forgiven under certain conditions? The IRS does not just automatically forgive back taxes. However, it does have tax debt relief programs such as partial payment agreements and offers in compromise that can make tax debt settlement more manageable. The IRS does understand that certain taxpayers are struggling, and it has advice for a variety of “what if” scenarios affecting taxpayers.
The best way to find out if you have back taxes is to check with the IRS directly. To find out, check your online account with the IRS, call them by phone, or visit a local IRS office to ask.
The process of filing an FBAR is different from filing annual tax returns. FBAR is not filed with your tax return. It is filed electronically to the Treasury Department using the BSA-E-Filing System.
If you want to paper-file your FBAR, then you need to call the Financial Crimes Enforcement Network's (FinCEN's) regulatory helpline number to request an exemption from e-filing. If they approve your request, they will send a paper FBAR form to you and you need to complete and mail that to the IRS address provided on the form.
On the other hand, if you want an FBAR lawyer or someone else to file the FBAR for you, you must use the form FinCEN report 114a. This will authorize that person to file FBAR on your behalf.
If you need help filling out the FBAR, there are FBAR lawyers in New York and elsewhere who offer their services. You can also get help filling out the FBAR from a Certified Public Accountant (CPA). Timothy S. Hart is both a skilled FBAR lawyer and a knowledgeable CPA. He is deeply familiar with what information must be given on the reporting form, as well as the online filing process and steps. He can fill out and file the FBAR for you, if you wish.
The FBAR penalty is hefty! If you fail to file your FBAR on the due date, it can lead you (as an individual or business entity) to pay a civil penalty of up to $12,921 on each non-willful violation of the filing requirement. On the other hand, if the failure to file an FBAR is found to be a willful violation, the civil penalty will be 50% of the account balance. There is also the potential for criminal penalties if your violation is found to be willful.
What happens if you never filed an FBAR and have learned you should have filed? You must take steps right away to correct the situation before you are hit with severe financial penalties and potentially criminal charges, which could happen if the IRS decides that your non-filing was willful. There is a program called the IRS Voluntary Disclosure Program that could help reduce your penalties if you are in this situation. Our FBAR lawyer can advise you of your possible eligibility for this program.
You can correct an FBAR that has already been filed. To correct an FBAR, you will need to file another complete FBAR report online with the revised information and check the "amended" box. If you don't file online, you will have to request another paper FBAR form. If you need help with amending an FBAR report, Timothy S. Hart can assist you.
You are not required to hire a lawyer to resolve your tax debt, but you are far more likely to get a beneficial solution with an experienced tax attorney representing your interests, especially if you owe a large amount of money. IRS agents are well-informed about tax laws and specialize in collecting tax debt. They also have the authority to negotiate tax debt settlements, but this is not something they will tell you up front, because they want to get as much money as possible from debt-burdened taxpayers. Experienced tax attorneys who represent taxpayers understand how the IRS operates and the power that its agents have to negotiate payments and potentially reduce debt owed. Our experienced tax relief lawyer will work hard to get you the best possible outcome.
Our tax relief attorney will help you by carefully examining all the details of your tax situation, including reviewing the accuracy of the debt you are said to owe. He will discuss your overall financial circumstances with you in order to get a clear picture of your income, expenses and other debts for the purpose of reaching a settlement with the IRS or NYS that is workable for you. He will prepare all the complicated paperwork involved and negotiate and communicate with tax authorities on your behalf.
If you don't pay your taxes on time or make tax debt resolution arrangements with the IRS, in addition to owing more in interest charges and penalties, you could have your wages garnished and potentially have your property and assets seized through a levy. If the IRS or state authorities decide that you are intentionally not paying taxes, you could also be subject to criminal prosecution. However, none of this happens in a vacuum. You will have fair warning through written and mailed notices, audits, liens and other actions that may be taken against you. If you have past-due tax debt, even from 1099-C income, reach out to Timothy S. Hart right away for help. Don't wait until you are contacted by the IRS.
If you have unfiled tax returns, you may be subject to expensive financial penalties and interest charges on the unpaid tax debt. The longer you go without filing, the more likely it is that the IRS or state will begin an investigation against you for nonpayment. The first step to take toward resolving the situation is to file all of your back tax returns, even if you have tax debt you cannot pay. The IRS and New York State have voluntary disclosure programs that allow people with unfiled returns to come clean, file their returns and pay back taxes over time if needed, in order to avoid potential criminal prosecution for tax evasion or fraud.
The IRS and state tax authorities do not want to ruin people financially or send them to jail. They simply want to collect taxes that are due or overdue, which means in many cases they are willing to negotiate payment arrangements and settlements with taxpayers. Our tax debt attorney Timothy S. Hart is skilled at negotiating effective tax debt relief solutions on behalf of taxpayers. Reach out to him today to arrange a free consultation about your situation.
A tax debt attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
A tax penalty attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
Seek help promptly after receiving a notice, learning of a filing problem, or facing a deadline or collection threat. Early action generally preserves more time to evaluate the available options.
Gather the relevant tax returns, agency notices, account transcripts, prior correspondence, payment records, and financial documents. The exact records needed depend on the issue.
The available response depends on the facts. It may involve correcting filings, responding to an agency, requesting an appeal, arranging payment, pursuing a settlement, or seeking court review when applicable.
Timothy S. Hart is both a tax attorney and a CPA. That combined legal and financial perspective can help identify the issues, evaluate practical options, and communicate with tax authorities on the client’s behalf.
The innocent spouse relief process can be quite lengthy. After Form 8857 is submitted to the IRS, it can take up to six months before a decision is made. During this time, the IRS will carefully review the taxpayer's provided information, including contacting the non-requesting spouse about the incorrect or fraudulent income tax return or returns.
By law, the IRS must contact the non-requesting spouse, even if there are claims of spousal abuse or domestic violence. The IRS contacts the non-requesting spouse to let them be involved in the process and will inform them of determinations regarding the request for relief. The IRS does not disclose to the non-requesting spouse any personal information that does not relate to the determination.
If you don't qualify for general innocent spouse relief, separation of liability relief or equitable relief and you are unable to afford to pay the additional taxes, penalties and interest owed, you could potentially get a tax settlement that will allow you to pay less than the amount owed or qualify for an installment payment agreement. Speak to our back taxes attorney to learn about your potential options.
Individuals who are married and file joint returns with their spouse and later divorce can still be audited by the Internal Revenue Service or New York State for a return filed when they were married, because it often takes the IRS or state a year or more before they select returns to audit. Innocent spouse relief is typically for individuals who want to separate their taxes from their ex-spouse and were unaware that their spouse underpaid the taxes on their return.
If the IRS audits a taxpayer and their ex-spouse, both may be found liable and face monetary penalties. For example, the IRS can find unreported income during the audit investigation and assess additional taxes. Even when the income that caused the additional tax belongs to the ex-spouse, both spouses can be found responsible since the tax return was filed jointly. The IRS can choose to initiate collection actions against the taxpayer, their ex-spouse or both. The IRS usually proceeds against both individuals on an audit for a married filing jointly return, even if the couple is divorced.
If you are divorced and facing more taxes and penalties because your spouse provided erroneous information on a joint tax return, contact our innocent spouse relief lawyer Timothy S. Hart to learn about possible solutions to your problem.
A innocent spouse relief attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
What is considered tax evasion? The basic tax evasion definition is when people use intentional means to avoid paying taxes. Every tax evasion case is different, but some examples of possible tax evasion can include:
- Inflating deductions when filing returns
- Taking credits that you are not entitled to take
- Underreporting or hiding income when filing
- Failing to file an income tax return
- Concealing your income
- Failing to report a foreign bank account
Both individuals and corporations can commit tax evasion.
If a tax auditor or other IRS agent suspects tax fraud/evasion, they may initiate a criminal investigation against you. IRS investigators are not required to notify people that they are being investigated, so you may learn you are being investigated in other ways. If you were being audited, the auditor may stop contacting you and may ignore any attempts you make to reach them. This can indicate that your case has been handed over to the IRS criminal investigation division. Criminal investigators will gather evidence by speaking with third parties such as your accountant, perhaps you ex-spouse or others to gain information about your tax situation. They may subpoena your bank records and other financial documents. You could be formally summoned to attend an interview with investigators instead of being asked to meet in a more informal way. If an IRS representative shows up at your door and introduces themselves as an IRS special agent, you are likely under criminal investigation.
If you have any suspicions that you are being criminally investigated for tax evasion by the IRS or New York State, get legal help immediately. Our New York tax evasion lawyer will aggressively stand up for your interests. Understanding the nuances of tax laws is crucial, and having an experienced attorney by your side can make a significant difference in the outcome of your case. We also offer comprehensive tax resolution services in Brooklyn to help you navigate any complexities and find the best possible solution tailored to your situation. Don't wait until it's too late; taking action now could protect your future and financial well-being.
What is tax avoidance vs. tax evasion? The basic answer to this question is that tax avoidance is legal, whereas tax evasion is a crime. As far as tax avoidance is concerned, IRS regulations allow taxpayers to claim deductions, credits, and adjustments to income for which they are eligible, such as mortgage interest deductions or credits for childcare expenses, as a couple of examples.
On the other hand, tax evasion is when people intentionally underreport their income, don't file tax returns, or take other illegal actions in order to avoid paying taxes they owe. If you believe you were mistaken in filing your taxes and thought you were taking legal deductions or other actions and are now being investigated, don't hesitate to reach out to tax evasion lawyer Timothy S. Hart for help.
Generally, under federal and New York State law, the statute of limitations on investigating tax returns is three years. However, if income is underreported by 25 percent or more or there are other signs of tax evasion, then the statute of limitations is six years from the date the alleged fraudulent return is filed.
A tax evasion attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
A wage garnishment attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
Seek help promptly after receiving a notice, learning of a filing problem, or facing a deadline or collection threat. Early action generally preserves more time to evaluate the available options.
Gather the relevant tax returns, agency notices, account transcripts, prior correspondence, payment records, and financial documents. The exact records needed depend on the issue.
The available response depends on the facts. It may involve correcting filings, responding to an agency, requesting an appeal, arranging payment, pursuing a settlement, or seeking court review when applicable.
Timothy S. Hart is both a tax attorney and a CPA. That combined legal and financial perspective can help identify the issues, evaluate practical options, and communicate with tax authorities on the client’s behalf.
A audit reconsideration attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
Seek help promptly after receiving a notice, learning of a filing problem, or facing a deadline or collection threat. Early action generally preserves more time to evaluate the available options.
Gather the relevant tax returns, agency notices, account transcripts, prior correspondence, payment records, and financial documents. The exact records needed depend on the issue.
The available response depends on the facts. It may involve correcting filings, responding to an agency, requesting an appeal, arranging payment, pursuing a settlement, or seeking court review when applicable.
Timothy S. Hart is both a tax attorney and a CPA. That combined legal and financial perspective can help identify the issues, evaluate practical options, and communicate with tax authorities on the client’s behalf.
A IRS collection attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
Seek help promptly after receiving a notice, learning of a filing problem, or facing a deadline or collection threat. Early action generally preserves more time to evaluate the available options.
Gather the relevant tax returns, agency notices, account transcripts, prior correspondence, payment records, and financial documents. The exact records needed depend on the issue.
The available response depends on the facts. It may involve correcting filings, responding to an agency, requesting an appeal, arranging payment, pursuing a settlement, or seeking court review when applicable.
Timothy S. Hart is both a tax attorney and a CPA. That combined legal and financial perspective can help identify the issues, evaluate practical options, and communicate with tax authorities on the client’s behalf.
A U.S. Tax Court attorney can review notices and records, explain the applicable procedures, communicate with the IRS or New York State when appropriate, and develop a response based on the taxpayer’s circumstances.
Seek help promptly after receiving a notice, learning of a filing problem, or facing a deadline or collection threat. Early action generally preserves more time to evaluate the available options.
Gather the relevant tax returns, agency notices, account transcripts, prior correspondence, payment records, and financial documents. The exact records needed depend on the issue.
The available response depends on the facts. It may involve correcting filings, responding to an agency, requesting an appeal, arranging payment, pursuing a settlement, or seeking court review when applicable.
Timothy S. Hart is both a tax attorney and a CPA. That combined legal and financial perspective can help identify the issues, evaluate practical options, and communicate with tax authorities on the client’s behalf.
The IRS and State Tax Departments are not your friend, and are looking after their best interest
Stop fighting alone. Call now for your free consultation with Tim Hart.
