California licensed tax attorney Elizabeth Gonsalves presents thoughts on how to address and deal with Default Assessments as they might be assigned to you by the state.
What is a Notice of Deficiency? What do they indicate? And, what can it mean to you for timing and scheduling your conversations with the IRS?
California licensed tax attorney Elizabeth Gonsalves offers some understanding about Audits, and how they might effect you.
California licensed tax attorney Elizabeth Gonsalves presents an insightful understanding of what an Offer in Compromise is, how to know if you might be eligible and how they effect the conversations with the state and fed tax authorities.
WHY YOU SHOULDN’T WAIT TO ADDRESS YOUR TAX BALANCES
By: Elizabeth Gonsalves, Esq.
You have just received notice of a certified mailing waiting for you at the post office. You haven’t had a chance to pick it up yet. Perhaps you should just ignore it? You’ll get to it tomorrow or Saturday… Fast forward a few months and all the money in your accounts has been absorbed by a tax levy. More embarrassing is the morning you come in to work to find a wage garnishment order has been issued to your employer, now you’re trying to avoid the eyes of co-workers in the payroll department. Worse still is learning a professional or driver’s license has been suspended. It does not pay to wait, it costs much more when one procrastinates with the IRS, the FTB, the Board of Equalization and the EDD.
If you are fortunate enough 1) to contact my office for help, and 2) happen to fall within one of the many criteria I can work with to obtain a release, you are still looking at a bill for the time I spent working to release the levy, which on the high end can take many hours over several days. Money comes back and your reputation can be restored but money is also lost and a lot of anxiety ensues in the interim. If you are not fortunate, a mini financial crisis occurs in your immediate household. It is not pleasant. I do not recommend it to my clients and I do not protect my clients from new problems this way.
AVOIDING COLLECTIONS ACTIVITY
On the other hand, if you had picked up that certified mailing right away and accepted it was there to notify you of the IRS or state’s final notice of intent to levy, a collections hold would have been something I probably would have been able to obtain before a levy issued and a lot of scrambling was suddenly the order of the day. When I am retained before forced collections occurs I can usually buy us time long enough to produce information the agencies require in a strategic manner that keeps an eye on the outcome while tempering the damage now. Sometimes we have to work together quickly to circumvent a complete emergency but at least we’re working on a long term solution to the problem, fees are saved and levy activity is avoided.
A second complication to waiting is that you, as the taxpayer, do not look so good when I contact the agency to argue a release is in order. Instead, it looks as though the levy did its job, which was to bring the unresponsive taxpayer forward. The agency and its staff are thinking, “Now you want to work with us? You want something from me?” It’s an uphill battle just to get back on track and back to normal life activities. Levies are very disruptive to work and cash flow.
I CAN’T AFFORD PROFESSIONAL ASSISTANCE RIGHT NOW
Of my clients that come in and retain me to address their levy or licensure issues (as opposed to hiring me before the levy or suspension issued), most of them provide a very reasonable explanation for their delay, which is that they are having trouble financially and didn’t feel they could afford to hire an attorney to help them. Days turn into weeks, weeks turn into months and boom! Catastrophe! Now, the taxpayer can’t afford to wait because waiting means up to 25% of their earnings or 100% of the funds in a levied bank account will be lost forever.
It’s the wrong way to look at the problem. Waiting means paying more, it does not mean paying less. Waiting also means stressing out the entire time I’m working to get you some relief. Further, you’re distracted from what it is that we really need to do, which is to gather up your financial information and talk about your goals so I can form a strategy for resolution and get it going for you.
There’s another important reason feeling you can’t afford professional assistance is not a good reason to wait, I get far better results more quickly when you are in a financial hardship. When times are tough, resolutions are far more straight forward and there are more options available to you. I can buy time and lock in something low before the agencies figure out you have turned the corner on your tough spell. My fees are lower because less time is needed to resolve your problem. Time is only on your side with regard to the collections statute and then, only if you have a strategy in place. The IRS has ten years to collect, the state has at least twenty years. If I am retained early we can reach an agreement with the agencies that is more favorable to you. At the same time we can now take advantage of allowing time to pass in a way that works for you, paying lower payments without worrying the whole time. Being direct about solving the problem with my help puts you in the best position to comfortably watch your account move closer to the time when other options for relief are available, such as bankruptcy or an expiration of the collection statute.
WORRY WITTLES AWAY AT HEALTH
The last and most important reason not to wait is your health and peace of mind. The worry that comes with an unaddressed tax balance is not worth the toll on your health nor the strain on your relationships. Financial trouble is the primary reason people break up and part ways. It causes health problems and breaks you down from the inside. Financial trouble muddles your perspective and appreciation for the good stuff in life. Every client tells me pretty soon after I’m retained that they’re relieved, they’re comfortable, they can see they’re going to be okay. Hand me the problem and let me help you with it. It’s not fun, but facing it with me will be worth it. You’ll be able to breathe again.
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