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Greensburg, Batesville, IN: How Does the IRS Determine How Much I Can Pay Against My Tax Debt

Taxpayers who owe back taxes to the IRS or Indiana Department of Revenue often wonder if they can file an Offer in Compromise to settle their tax debt, and if so, how much will they need to pay. For taxpayers in Greensburg, Batesville, and Southeastern Indiana, this is a situation where Tax Issues Resolved can help. 

In order to determine the amount a taxpayer can ‘afford’ to to pay against their tax debt, an involved formula, called the Reasonable Collection Potential, or RCP, is used. It combines the Net Equity in Assets currently owned with the Future Income. 

For the Net Equity in Assets portion, the IRS uses the market value of all the taxpayer’s assets combined, less any loans owed on them. Assets are anything owned of value, including bank balances, automobiles, real estate, investments & retirement accounts, life insurance cash surrender values, collectibles, etc. This makes up the first half of the calculation.

The IRS calculates the Future Income by determining what income the taxpayer receives monthly. First, gross income from all sources is calculated, including wages, business income, rental income, alimony, pension income, etc. Then the allowable expenses are deducted. These include the standard amount for housing and groceries, automobile or transportation expenses, loan payments, delinquent state tax payments, necessary child care expenses, life insurance premiums, etc. Not every expense is allowable! The amount after deducting allowable expenses from gross income is what can be paid to the IRS to settle the tax debt.

These calculations can be long and complicated. Many offers submitted are not accepted. If you are interested in increasing your odds of the IRS accepting an Offer in Compromise to settle your tax debt, contact me at [phone] or email me at [email protected]. 

Dawn Krekeler, CPA

Tax Issues Resolved, LLC

Greensburg, IN

Ph. [phone] 

[email protected]

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Greensburg, Batesville, IN: Extended Return Due Date Coming Quickly

2020 has brought many changes with it. Tax return filing and estimated payment due dates were extended by the IRS from April 15 to July 15. There has been news of extended tax return due dates being delayed beyond the usual October 15 deadline. Unfortunately, for residents of Greensburg, Batesville, and Southeastern Indiana, this will not be the case. Virtually all extended returns will still be due on October 15. The only exceptions are victims of wildfires in the West, and hurricane victims on the Gulf shore.

After the outrageous year we have had, this may cause panic for some taxpayers. Cash flow for many has been disrupted, and a tax bill that is normally run of the mill may be a major concern this October.

Even for a taxpayer who is unsure of how to make the payment, the best course of action is to still file the return on time. Once filed, options can be evaluated as to what the best method of repayment may be, such as an Installment Agreement, Offer in Compromise , or even requesting Currently not Collectible status.

If you have any concerns about how to pay the 2020 tax due, contact me at [phone] or email at [email protected].

Dawn Krekeler

Tax Issues Resolved, LLC

Greensburg, IN

Ph [phone]

[email protected]

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Greensburg, Batesville, IN: Ways to Qualify to Pay ‘Pennies on the Dollar’

After watching the late night commercials, taxpayers often want to know if they can pay pennies on the dollar for their tax debt. For Greensburg, Batesville, and Southeastern Indiana residents that we serve, this can be a way to resolve their tax debt with the IRS.

Offers in compromise are one of the methods the IRS uses to resolve a tax debt with a taxpayer. There are 2 reasons to request a compromise.

The first type of Offer in Compromise is Doubt as to Liability. In this case, there is a question regarding the amount of tax that was charged. Generally, the IRS has attributed more income to the taxpayer than was legitimately earned. In order to resolve this, proof must be submitted as to the correct amount of income, and why the tax should be lowered. 

The second type of Offer in Compromise is Doubt as to Collectibility. This is the most common type of compromise, and applies when the tax is correct, but the taxpayer is not able to pay the amount due. To request this compromise, a taxpayer must calculate their Reasonable Collection Potential, or RCP, in order to determine how much they can afford to pay. 

Once these requests are filed with the IRS, the taxpayer will be notified if their request has been accepted, rejected, or adjusted. With the ultimate goal of resolving the tax debt, the offer continues by beginning payments, or being renegotiated. 

If you are in a situation where an Offer in Compromise could help your situation, contact me to evaluate your case at [phone] or email at [email protected]. 

Dawn Krekeler, CPA

Tax Issues Resolved, LLC

Greensburg, IN

[phone]

[email protected]

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Greensburg, Batesville, IN: Streamlined Installment Agreements

While I do prepare tax returns for individuals and businesses, the focus of my business is to resolve back tax debts for taxpayers in Greensburg, Batesville, and Southeastern Indiana. The most common way to resolve a tax debt with the IRS is to make payments over time; otherwise known as an installment agreement.

The simplest agreement is the streamlined installment agreement. This requires a minimal amount of information to be submitted to the IRS. If a taxpayer owes $50,000 or less, they MAY qualify for this streamlined agreement, if they can pay their tax debt in full within 72 months (6 years). The taxpayer must also have all tax returns filed, and be keeping up with their current year tax payments, by making their estimated payments or having the correct amount withheld from their paycheck.

If you think you might qualify for an installment agreement, or need other help with resolving a back tax debt, contact me for help at [phone] or email [email protected].

Dawn Krekeler, CPA

Tax Issues Resolved, LLC

Greensburg, IN

[phone]

[email protected]

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Greensburg, Batesville, IN: How Did the IRS Collection Division Find Me?

Taxpayers are routinely identified by the IRS Collection Division, and will receive a letter, urging them to clear up their tax debt. My business focus is helping taxpayers in Greensburg, Batesville, and Southeastern Indiana to resolve their tax debts with the IRS or Indiana Department of Revenue. How does a taxpayer come to be identified by the Collection Division?

Their are two common ways this happens.

First, taxpayers can file a tax return with a balance owed. If a payment is not included with the return, a tax debt is born. Once this happens, a taxpayer can request an installment agreement, apply for an offer in compromise, or, of course, pay the balance in full, if they have the financial ability to do so.

Second, taxpayers can be identified by the IRS Collection Division for multiple years of not filing a tax return. Once a letter (or letters) for non-filing have gone out, it is in the taxpayer’s best interest to file any and all returns that remain unfiled - or at a minimum the previous 6 years - as soon as possible.

If you have been contacted by the IRS and need help figuring out what to do, contact me for help at [phone] or email [email protected].

Dawn Krekeler, CPA

Tax Issues Resolved, LLC

Greensburg, IN

[phone] 

[email protected]

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Greensburg, Batesville, IN: What is Uncollectible Status?

I help taxpayers in Greensburg, Batesville, and Southeastern Indiana resolve their tax debts with the IRS and Indiana Department of Revenue. Often these tax issues take over a person’s life. If a taxpayer owes a large debt that they are unable to pay, what can be done?

The IRS has a Currently Not Collectible (CNC) status, also known as Uncollectible status, for taxpayers who do not have enough income and / or assets to make a lump sum or periodic payments toward their tax debt. If a taxpayer meets the criteria for CNC, the IRS will not file any levies against them. However, interest and penalties will continue to accrue, and any liens will remain, and be enforced. 

This strategy can be useful in buying some time, especially during the current pandemic, while income can be uncertain. If you need help resolving a tax debt with the IRS or Indiana Department of Revenue, contact me at [phone] or email at [email protected].

Dawn Krekeler, CPA

Tax Issues Resolved, LLC

Greensburg, IN 47240

[phone]

[email protected]

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Greensburg, Batesville, IN: Which is Right for You: Offer in Compromise, Installment Agreement, or Uncollectible Status

I assist taxpayers in Greensburg, Batesville, and Southeastern Indiana with resolving their tax debts with the IRS and Indiana Department of Revenue. There are various methods offered by the IRS when settling a tax debt with them. These are Offer in Compromise (OIC), Installment Agreement, and requesting uncollectible status.

An Offer in Compromise is used to make a kind of “deal” with the IRS, agreeing to pay a portion of the tax debt that is owed. The unpaid amount is essentially forgiven.

An Installment Agreement is a payment program, where the taxpayer makes an agreement with the IRS to repay their tax, in full, over an agreed upon time frame.

Uncollectible status is the least frequently used method of resolving debts with the IRS. When taxpayers are unable to make any payments toward their unpaid tax, their accounts can be put in Uncollectible Status. Once this is established, the IRS will cease collection actions, and revisit the taxpayer’s situation every 1 1/2 - 2 years. 

All of these methods require application for, and acceptance by, the IRS. The circumstances of each situation dictate which method can be used. Once a new plan has been established, the IRS requires the taxpayer to stay compliant - by filing and paying all future taxes on time, and in full.

If you are facing a tax debt, and need help figuring out how to pay it, contact me for help at [phone] or email [email protected].

Dawn Krekeler, CPA

Tax Issues Resolved, LLC

Greensburg, IN 47240

[phone]

[email protected]

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Greensburg, Batesville, IN: What is the First Step to Resolving Tax Debts

I assist Greensburg, Batesville, and Southeastern Indiana taxpayers in resolving their tax debts with the IRS and Indiana Department of Revenue.

With the disruption to the economy caused by Covid-19, now may be one of the best times to begin working with the IRS to resolve tax issues.

The first step a tax professional will take when reviewing a taxpayer’s situation is to get the current transcript from the IRS. This contains all the information that has been provided to the IRS, including tax returns that have been filed, returns that are missing, amount of tax, interest, and penalty owed, refunds due, and even wages, other income, and mortgage interest paid. 

With this information, the tax pro can guide the taxpayer through filing the required tax returns and settling their tax debt. The best solution may be an Offer in Compromise, Installment Agreement, or requesting Uncollectible status. The specific circumstances of the situation will determine which is best. 

If you are ready to settle your tax debt with the IRS, contact me at [phone] or email at [email protected]

Dawn Krekeler, CPA

Tax Issues Resolved, LLC

Greensburg, IN 47240

[phone]

[email protected]

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Greensburg, Batesville, IN: When Will the IRS Letters Stop?!

I assist taxpayers in Greensburg, Batesville, and the Southeast Indiana area in filing back tax returns, Installment Agreements, and Offers in Compromise with the IRS.

When a taxpayer files multiple tax returns at once, they may feel like they have come a long way in getting caught up with their tax troubles. However, in some cases, this causes a new set of problems, if there is a balance due on each return. The IRS will now begin a letter writing campaign to encourage the taxpayer to pay the tax due.

Once a tax return is filed, the IRS has exactly 10 years to pursue the taxpayer for payment of the tax. They can send letters, file liens against property, or levy assets owned. After that date, however, the IRS has no right to further pursue the taxpayer, even if the debt has not been paid. 

While determining whether to request an Installment Agreement, Offer in Compromise, or Currently not Collectible status with the IRS, one of the first considerations should be how long is left until the 10 year date is reached. A date less than 3 years away has a different strategy than a date 5 years or more away. A tax professional who is familiar with these rules can help navigate the best action to take. 

If you have a tax debt that needs resolved, contact me at [phone] or email at [email protected].

Dawn Krekeler, CPA

Tax Issues Resolved LLC

Greensburg, IN 47240

[phone]

[email protected]

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Greensburg, Batesville, IN: 2019 IRA Payments Can be Made Until July 15

One of the ways we assist taxpayers from Greensburg, Batesville, and Southeast Indiana with resolving back tax issues with the IRS and Indiana Department of Revenue is by preparing and filing tax returns.

Under normal circumstances, taxpayers have until April 15th to make contributions to IRAs and still take a deduction on their tax return. This year, the deadline to file a tax return was extended until July 15, as was the deadline to contribute to a traditional IRA. One of the first steps of getting right with the IRS is making sure all tax returns have been filed. When filing a timely return, one tax reduction strategy is to contribute to your IRA, effectively saving money for yourself instead of giving it to the government.

One part of resolving a tax issue with the IRS requires that the taxpayer become compliant. This means that all returns are filed, and current year taxes are being paid or withheld in the right amounts and on time. Bringing a client into compliance is one of the first steps to resolving the debt. 

If you owe back taxes and want to finally settle the tax debt, contact me at [phone] or email at [email protected].

Dawn Krekeler, CPA

Tax Issues Resolved LLC

Greensburg, IN 47240

[phone]

[email protected]

[intaxhelp]

Greensburg, Batesville, IN: Notice of Levy - Now What?

My practice focuses on resolving tax debts with the IRS and Indiana Department of Revenue for taxpayers in Greensburg, Batesville, and Southeast Indiana.

When taxpayers are behind in filing tax returns or in paying tax debts, the IRS or state departments will send a series of letters, attempting to notify them that there is a problem, and the taxpayer needs to contact them to work out a solution. 

After the IRS has made multiple attempts to contact a taxpayer, and receives no response, they will issue a Notice of Levy. This letter is to inform the taxpayer that an asset, such as their checking account, is going to be levied (taken) on a specific date. Once that date arrives, if the taxpayer still doesn’t contact the IRS, all funds in the checking account that day will be taken, and applied to the tax debt.

Even though it is a dire situation at this point, if the taxpayer works quickly, it may be possible to get the money back. They should immediately contact a professional who is familiar with how the IRS works, and provide the information requested. If the IRS feels that the issue is on its way to being resolved, they may release the levy and return the funds taken.

If you, or someone you know, is being threatened with a levy, or has already been levied, by the IRS, contact me at [phone] or email at [email protected] for help with this matter.

Dawn Krekeler, CPA

Tax Issues Resolved LLC

Greensburg, IN 47240

[phone]

[email protected]

[intaxhelp]

Greensburg, Batesville, IN: Tax Payments due July 15

My practice focuses on assisting taxpayers with resolving back tax issues with the IRS and Indiana Department of Revenue in Greensburg, Batesville, and the Southeast Indiana area. 

Due to the pandemic, the IRS and most states allowed taxpayers to delay the filing and payment of balances on 2019 tax returns to July 15. The 1st and 2nd estimated tax payments for 2020 were also postponed to July 15. This is creating a perfect storm for taxpayers who may already have back tax issues, and are now looking at owing 50% of their 2020 tax, or more, in less than 2 weeks. 

For a taxpayer that already owes for prior year tax debts, what solutions are available?

When the IRS and state departments consider the collectibility of back tax debts by taxpayers, it is based upon their current financial situation. If the shutdowns have made paying an installment agreement for prior year tax debts impossible, it may be the best time to modify it by placing the account into uncollectible status, or applying to settle the debt entirely with an Offer in Compromise. 

If you owe back taxes and want to finally settle the tax debt, contact me at [phone] or email at [email protected]. 

Dawn Krekeler, CPA

Tax Issues Resolved LLC

Greensburg, IN 47240

[phone] 

[email protected]

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Batesville, IN: Impact of COVID-19 on Tax Payments Due

I represent taxpayers in Batesville and Southeastern Indiana who owe back taxes to the IRS and/or Indiana Department of Revenue.

It isn’t news to anyone that the Coronavirus pandemic has turned the world upside down. According to a survey conducted in May by TaxAudit, many Americans (61%) are worried about how they will make their tax payments on time. More than a third (37%) do not have the funds to pay their 2019 tax bill, even though the payment deadline was extended until July 15.

What will happen if a taxpayer owes the IRS, but doesn’t pay their bill? The IRS will charge a monthly penalty, which can accumulate to as much as 25% of the total bill, plus an interest charge every month. This can add up quickly. If let go long enough, a tax bill can turn into a tax lien, followed by a federal tax levy, which can swiftly destroy a person’s credit and finances.

The best way to deal with this is to contact the IRS, as soon as possible, and work out a solution with them for paying the amount due. There are different possibilities, including a payment plan (installment agreement), offer in compromise, or for dire situations, putting the account in uncollectible status until the taxpayer’s financial situation improves.

If you or someone you know is unable to pay their federal or state taxes, feel free to contact me for assistance at [phone] or by email at [email protected].

Dawn Krekeler, CPA

Tax Issues Resolved LLC

Greensburg, IN 47240

Ph. [phone]

[email protected]

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Batesville, IN: What Does This IRS Tax Notice Mean?!

The main focus of my practice is to resolve back tax issues with the IRS. I represent taxpayers in Batesville and the Southeastern Indiana area.

Receiving a notice from the IRS or Indiana Department of Revenue is very scary for most people. They threaten to garnish wages or put a lien on your assets.

However, the IRS also follows a predictable pattern when they pursue a taxpayer who does not respond to them:

- A notice is sent requesting the tax return(s) be filed

- A balance is assessed using the available information and a notice (bill) is sent

- A notice of lien is filed in the county of residence

- A notice of the intent to levy wages, funds in bank account, etc, is sent

This will continue until the taxpayer calls the IRS, or has a professional call for them. A professional can be invaluable at this point, by advising the taxpayer of the best course of action, such as dealing with the levy, filing back returns, or submitting an Offer in Compromise. By navigating these steps with a tax resolution specialist, this nightmare can become history.

If you or someone you know is having an issue with the IRS or state, feel free to contact me for help at [phone] or by email at [email protected].

Dawn Krekeler, CPA

Tax Issues Resolved, LLC

Greensburg, IN 47240

[email protected]

Ph. [phone]

[intaxhelp]

Greensburg, IN: Do You Need to Catch Up on Filing Tax Returns?

Tax Issues Resolved, LLC

I represent taxpayers in Greensburg and Southeastern Indiana who have past due tax return filings. Due to the pandemic, there has been, and will increasingly continue to be, taxpayers who are not able to pay their taxes. 

The IRS has already identified more than 10 million non-filers, according to their most recent reports. In 2020 they are redoubling their efforts to contact these taxpayers and bring them into compliance. 

Many taxpayers are not aware that failing to a tax return is a federal crime under Internal Revenue Code Sec. 7203. 

What can a non-filer do to resolve their debt with the IRS? There are different options, depending on why the failure to file occurred. Some options can be an Offer in Compromise (OIC), Installment Agreement, requesting their account be placed in Uncollectable status, or making a voluntary disclosure. 

If you or someone you know has unfiled tax returns, or some other federal or state tax issue, feel free to contact me for assistance at [phone] or by email at [email protected]. 

Dawn Krekeler, CPA

Tax Issues Resolved, LLC

Greensburg, IN 47240

Ph. [phone]

[email protected]