^{Statute of Limitations on IRS Collections}

CPA Serving Atlanta GA & Beyond

^{Knowing the ins and outs of tax law can do much to help you along the way to make sure all of your tax issues are well understood and handled. Tax law is complicated, understanding some of the individual nuances will always be of great assistance. One way to be sure that you do not run afoul of a few of the basics will help you make wise and informed decisions. Just as a physician first strives to get a good understanding of the patient, their history and their symptoms before offering a diagnosis, so it is critical for a CPA to understand the underlying causes and tax problems, to address their causes and effects and to review original source documents that originally caused the liability to start with. If the taxpayers proceeds with haste rather than wise and judicious discernment, they may well lead themselves to far greater financial pain than originally existed. These basic tenants of IRS Statutes of Limitations will do much to enlighten potential tax opportunities and planning:}

^{Statute of Limitations on Refunds}

^{If you file a corporate or personal income tax return more than three years after the original returns due date, then any attendant refunds are lost forever. You cannot apply them to other outstanding years, you can not apply them to future years, as you get absolutely no credit for them at all. This is perhaps one of the greatest tax tragedies as I have personally witnessed taxpayers who would have otherwise received thousands and thousands of dollars of refunds forever legally lose their claim to any potential refund. Unfortunately there are no appeal options and once the three year statue lapses, it is over, you “cannot pass go” and your refund is forever lost.}

^{Ten Year Collection Period}

^{There is a ten year Statute of Limitation on the Internal Revenue Service ability to collect taxes. The ten year statute begins generally form the date the original return was filed or when the tax was assessed by the IRS. During the ten year tax period the IRS is able to use all of its collection tools including liens, levy, garnishment and seizure to protect the rights and interest of the Treasury Department/United States government. After the ten year period lapses the tax is no longer assessable by the Service. However during the ten year period, the taxpayer and the IRS may jointly agree to waive the ten year statute and extend the collection period. This may be advantageous when a taxpayers ability to pay may be improving and enforced collection efforts might prove to have disastrous effects.}

^{Suspension of the Waiver Period}

^{Generally speaking the statute of limitation period lapses after ten years after the return is originally due, filed or assessed. However there are several items which can legally extend the time period that the IRS has to collect outstanding monies. For the items below, the ten year statue is extended for the time the following events were occurring.}

^{Installment Plans. The time that a taxpayer  is on a on a plan making regular monthly payments/an Installment Plan is not counted as part of the ten year periods lapsing and is therefore added to and extends the ten year original period.}

^{Suspension of Collection Efforts. If the IRS suspends collection efforts for a time in a effort to work with the taxpayer during legal or tax filings, this period as well is added to the ten year period when determining the statute of limitations. The most common examples of these would be time periods covering Installment Plans, submission and consideration of an Offer in Compromise and the periods covering that of a Bankruptcy filing.}

^{Tax Fraud. In the event that a taxpayer commits tax fraud there is no statute of limitations on either collections or for the auditing of applicable returns.}

^{Often toward the end of the ten year period, taxpayers will discover that collection efforts intensify as the Internal Revenue looks to collect any open tax monies due.}

^{Written by author John Dillard CPA of His CPA at 770 814 9304 and visit http://www.hiscpa.com/ (a Christian CPA firm). At His CPA we march to the beat of a higher drummer where we put the “Golden Rule” to work each and every day by “Serving Him by Serving You…One Tax Return at a Time.”}

^{We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Payroll Administration, Bookkeeping.}

^{Serving New York, Los Angeles, Chicago, Houston, Philadelphia, Phoenix, San Antonio, San Diego, Dallas, San Jose, Detroit, Indianapolis, Jacksonville, San Francisco, Columbus, Austin, Memphis, Baltimore, Fort Worth, Charlotte, El Paso, Milwaukee, Seattle, Boston, Denver, Louisville, Washington D.C., Nashville, Las Vegas, Portland, Oklahoma, Tucson, Albuquerque, Long Beach, Atlanta, Fresno, Sacramento, New Orleans, Cleveland, Kansas City, Mesa, Virginia, Omaha, Oakland, Miami, Tulsa, Honolulu, Minneapolis, Colorado Springs, Arlington}

Processing an Offer in Compromise

CPA Serving Atlanta GA & Beyond

If you have worked with your CPA and have determined that you are a good candidate to submit an Offer in Compromise, then it is time to begin addressing the many nuances and specific details required. Failure at any level to satisfy Internal Revenue rules and regulations can mean that the IRS will return the whole of your Offer and its many attendant documentation requirements. The details, forms and collaborating information for any sound Offer is both exhaustive and time consuming. Statistics of the acceptance rates of Offers are very low thereby illustrating both the difficulty in the processing of a successful Offer. Though I have seen no statistics to bear this out, I believe that most failed Offer attempts are for two predominant issues. Foremost, the IRS will not process an Offer in Compromise for a taxpayer who does not qualify. Thus it is critical to begin the process of the rules of determining who is and who is not a candidate. Secondly, Offers frequently fail for lack of a good understanding of all of the forms, procedures and documentation required. To gain a good understanding of the rules for qualifying for a proper Offer submission visit http://www.hiscpa.com/offer-in-compromise.htmlmit Form 656 (The Offer in Compromise Form): This is the form the Internal Revenue has prepared for taxpayers to utilize to submit  and document the Offer itself.

Section I of the Offer form is where a taxpayer lists their full name, address and Social Security number. If the Offer is being done in the business name then the corporation name, address and Federal ID/EIN number would be listed.

 Section II of the Offer form will delineate the specific type of tax for which you will be seeking abatement. Boxes are to be checked reflecting both the years/periods and class of tax for which you are seeking relief. Some of the more common categories designated are Form 1040/Personal Income Taxes, Form 1120/Corporate Income Taxes for an C Corporation, Form 941/Employers Quarterly Federal Tax Return and Form 940/Employer’s Annual Federal Unemployment (FUTA). There is also a section for Trust Fund Liabilities, which are those assessed against a responsible taxpayer personally for trust fund monies (dollars collected by a company “in trust” as an escrow agent for the IRS).

Section III of Form 656 is where a taxpayer/tax advocate lists as to the reason for the offer. One of the options that a taxpayer can select is “Doubt as to Collectability,” which is signifies that the taxpayer has insufficient assets and income to pay the full amount. The other option that can be selected is “Effective Tax Administration” which was is an acknowledgment by the taxpayer that there are exceptional circumstances which would lead an examiner to consider the collection of such taxes as being unfair and inequitable. Under old Offer forms this box was previously referred to as “Doubt as to Liability” (i.e., you believe there are substantive reasons as to why you do not owe the tax). It is possible to check both boxes in this section, if applicable.

Section IV of Form 656 is where a taxpayer documents their proposed payment plan. Generally speaking the IRS wants all of the Offer money when the Offer is accepted, but by tax law, the IRS can consider and accept a payment plan covering up to two years. IRS Offer rules require that with each Offer Form that a $150 processing check should be enclosed along with at least 20% of the total amount being offered. The initial fees to be paid along with the forms are a critical and integral component of this process, and failure to pay these will ultimately result in your Offer being rejected.

Section V of the Offer Form sets out the rules and procedures of the Offer confirming a taxpayers understanding that, as a condition of their Offer’s acceptance, that taxpayers have to remain in compliance with all of their tax filings and payments for five years after the Offer is approved and processed. Otherwise, these previously abated Offer monies, penalties and interest will be reinstated and collection efforts resumed.

Section VI, VII and VIII are where the taxpayer documents how the unpaid tax monies arose, where the funds will be procured to pay the Offer and the taxpayers signatures respectively.

Tax Problems, Liens, Levies and Garnishments dictate the intervention and level of service you will need from your CPA. Understanding the basis tenants of the Offer Process, its rules and guidelines will do much to ensure that you will help your case along the way. The IRS process is tedious, detailed and exhaustive. Having a CPA who is familiar with the process is your best protection to help your Offer to its successful completion. To read more about this process visit http://www.hiscpa.com/irs-representation.html

Written by John Dillard CPA of His CPA at 770 814 9304 and visit http://www.hiscpa.com/ (a Atlanta Christian CPA firm). At His CPA we march to the beat of a higher drummer where we put the “Golden Rule” to work each and every day by “Serving Him by Serving You…One Tax Return at a Time.”

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Payroll Administration, Bookkeeping.

Serving Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain

 Metro Atlanta CPA                                    www.HisCPA.com   

Corporate Income Taxes                  www.hiscpa.com/tax-services.html

Personal Income Taxes                     www.hiscpa.com/tax-top-ten.html
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Financial Reporting                        www.hiscpa.com/attestation-services.html

Strategic Business Checklist         www.hiscpa.com/business-checklist.html    

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Contact John Dillard CPA of His CPA at 770 814 9304 and visit www.hiscpa.com/

At His CPA we march to the beat of a higher drummer where we put the “Golden Rule” to work each and every day by “Serving Him by Serving You…One Tax Return at a Time.”

We serve clients that are located in Atlanta GA, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, and Beyond.

Have you ever wanted to work with someone whom you felt really cared about you, your business, your retirement, and planning for your family? I have a heartfelt conviction that I really want to “serve” my fellow Business Owners and to give advice that hopefully you will feel are beyond the scope of CPA services you ever experienced. Do you want that ole’ time feeling of being served by someone sensitive to you? I welcome meeting with you FOR FREE to discuss you and your business’s plans.  

I work exclusively with business owners whom are striving to maximize their profit and potential. I bring to the table twenty years of experience as a CPA and 18 years of managing my own successful practice. My credentials include passing most of the CPA exam while still in school, graduating Magna Cum Laude, several honor societies, obtaining the Upcoming Junior Award, working with small rapidly growing privately held companies, a history of success on IRS representation issues, and recently I won the SBA’s Accountant Advocate of the year in Georgia. I strive to anticipate bumps in the road so that you might be able to focus on the business of running your business. I would welcome meeting with you for a free consultation. 

Services Offered

Financial Statements, Tax Planning, Corporate Income Taxes, IRS Representation, Strategic Advice, Personal Income Taxes, Entity Selection, Critical Business Decisions, Banking Relationships, Attorney Relationships, Part Time-CFO

We serve clients that are located in Atlanta GA, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, and Beyond.

No, we are not perfect but we strive to bring the Good News of Christ to our business and to our clients each and every day. We “Serve Him…by Serving You”. Looking to advise our clients on each and every issue taking on the task of walking in our clients shoes being willing to look out for the best interests of our clients and not that of our own.

In many of our free initial client meetings we often share strategic and never before heard of advice that they take back to their present advisers and utilize. Though this might often upset others we feel our responsibility is to impart wisdom and advice to our clients without having to hold them ransom or under contract. We feel that our relationships should be open and not one sided allowing our clients the freedom each and every day to chose what they should do. No, we do not bend on our principles as they are handed down to us from on High, but we do not hold our clients hostage making them bound to continue to use our services. We constantly advise clients on changes in tax law keeping them abreast of changes which they utilize in their business and financial planning. Our long term goal is your financial security and we work hard to accomplish this each and every day.

We serve clients that are located in Atlanta GA, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, and Beyond.

At HIS CPA P.C. we strive to serve all of our clients each and every day utilizing all of our talents, resources, and wisdom to your best advantage. Striving to price our services in the big fat happy middle with many being below and many being above our fees we strive to make an honest day’s wage and in return serve our clients to the highest standards possible. Our motto…”Serving HIM…By Serving You, One Tax Return at a Time”

By planning ahead you can avoid having unnecessary tax fines and penalties from being assessed. Being sure to pay your taxes as you go will enable you to properly budget your living expenses while also being sure to legally maintain the tax and legal responsibilities of your business. If you show up at year end hoping for your tax professional to work a miracle you are expecting the impossible. However, if you show up at your CPA’s door well before the year is over and before the tax clock has wound down, you CPA can help you not only plan but help ensure that you have legally claimed all of your tax deductions. During these meetings you can also set up and fund, if you do it early enough, retirement plans for you and your employees so as to maximize your retirement benefits in the future and your tax deductions today. Planning and not compliance are one of the best investments you will make in your financial future.

We serve clients that are located in Atlanta GA, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, and Beyond.

Penalty Abatement

There are a myriad of penalties which the IRS can use to encourage compliance ranging from information return penalties, non-filing, non-payment, estimated payment, and failure to deposit penalties. If you are assessed penalties for any reason you still have options. Both the IRS and states will work with you to address your outstanding taxes, interest, and penalties. One of the first defenses to explore is whether you have reasonable cause for your original failure to address you past returns and outstanding monies. If you are to be granted relief under these provisions you will need to be able to show that you have exercised ordinary business due diligence and care in calculating your tax obligations. You will need to be able to illustrate that obligations were generated when circumstances existed which were beyond your control contributed to the monies being owned and assessed.

Not being aware of a law is not a valid defense which can be successfully used when attempting to request penalty abatement as you are required to be prudent in addressing your obligations and responsibilities. Our tax system is one of voluntary compliance and tax penalties are the vehicle by which the IRS uses to ensure that you are financially motivated to file and pay your taxes as they become due. The IR S’s goal is to provide a consistent and fair methodology to assessing penalties to provide civil tax penalties to ensure ones tax obligations are satisfactorily addressed.

When evaluating penalty abatement issues the IRS will consider whether or not a penalty will cause a significant hardship such as a levy might impair a taxpayer’s ability to acquire needed medical care. As well a death, serious illness, or unavoidable absence may establish reasonable cause for considering penalty abatement. However items such as forgetfulness, ignorance of the law, and making a mistake are not generally allowed as reasonable cause in evaluating penalty abatement issues.

Please be reminded that the IRS will work with you to set up an installment agreement to pay outstanding monies as well as perhaps an Offer in Compromise if you qualify.

We serve clients that are located in Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, Dekalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain and Decatur.

Working with the IRS

IRS rules are set out to assist those who are attempting to comply and to encourage all of us, either willingly or not, to file and pay our just and fair taxes. Tax laws, though complicated to the lay person, are often confusing.  A CPA can help people navigate through the tax maze by making the complicated easier to understand. By seeking and following the advice of a trusted professional we are able to comply with tax law with the least amount of pain and aggravation. By not filing returns, not paying amounts owed when due, and attempting to tackle complex tax issues, we do not have the skill or wisdom to adequately address, many fall prey to our general inability to understand all of the nuances involved. A Good CPA can help address and solve tax issues.

Tax Problems

The best first issue is to review the reasons for the assessment. Many times during this process it is discovered that it is not a payment issue but the original returns filed need to be amended. After the determination of a just and fair tax, one can begin to adequately assess and make arrangements for the monies due. Great care should also be taken during this time to ensure that all payments and credits have been properly applied to the balance owed

Trust Fund Monies

In the event your business has employees or collects sales tax, the monies withheld from payroll and sales taxes collected are technically withheld “in trust.” As such they have legal exposure to both the company for payment, as well as those personally responsible parties who knew about and controlled such payments. A responsible party is generally defined as those who were most/responsible for payments that would well extend to check signers, accounts payable, officers, and financial staff. This assessment is for one personally who collected trust monies which they unduly did not remit to the appropriate taxing/legal authority. As these monies are withheld in trust, they do not belong to the company/business. Both the IRS and individual states take a very dim and stern view of all those who unduly use their money. A 100% penalty may be assessed to the responsible parties making them personally responsible for any collected and unpaid trust fund monies.

If a business is not able to pay its staff payroll taxes/remit collected sales taxes as due, it is a clear warning side that the business model is upside down. Though most times it would indicate that the margins of a business are not adequate to support the business’ present staffing levels and overhead, it could also be an indicator that the business is not properly leveraged/financed.

Installment Agreements

The IRS will work with taxpayers to pay the monies owed over time. This option requires the taxpayer to file a form requesting that a specified amount be paid monthly over time. The IRS then has to accept the plan prior to it becoming effective. Though this is a practical way to address a larger balance over time it does not stop the assessment of penalties and interest which will continue to accrue until all monies are paid in full. Thus, it is most advantageous to consider procuring the funds from other sources as these finance/carrying charges are usually much less than that of the Internal Revenue Service.

Failure to File Penalties

Failure to File Penalties are assessed in addition to normal penalties and interest for those who do not make their payment and filings on a timely basis. Please be reminded that an extension does not allow a taxpayer to pay at a later date, as income taxes are generally due and payable as they are earned. However, a situation is greatly exasperated when a taxpayer does not file their taxes on a timely basis. Thus it is financially most advantageous to file a return even if a taxpayer does not have the monies to pay a return as the monies become due.

We serve clients that are located in Atlanta GA, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, and Beyond.