Frequently Asked Questions
1) What if I don't owe much money in back taxes?
First, the amount that one owes is relative to cash flow or income. An amount that would be a considerable burden to one person or business, may be manageable to another. That said, if less than $10,000 is owed, you may be better off trying to deal with the IRS yourself rather than seek outside help. The exception would be if you are under severe enforced collection action.
2) What can I do if the IRS informs me of a collection action?
You have several options, but the IRS may not make them evident. There are ways to negotiate releases from these collection actions. Often you have appeal rights against any collection action. Furthermore, there are governmental entities outside the IRS that can work with you on releasing levies and stopping garnishments.
3) What's the best way to take control of my tax liability?
Proactively contact the IRS and state taxing authorities and let them know that you are addressing the situation and are willing to work toward a resolution. Don't avoid the problem. Professional advice will help you negotiate a better settlement and will ease the burden of dealing with the IRS. Taxes are not a good "do it yourself" project.
4) Can I deal with the IRS on my own?
Yes you can, and Larson Financial often recommends that you advocate on your own behalf, as long as you are armed with the right resources. Basic information, including your strategy options, collection division procedures, the correct forms and IRS contacts, is essential and we can help you obtain this information.
5) Can you find out how much I owe?
Larson Financial can order your account transcripts from the IRS and state taxing authorities. When we receive this information, you may find that much of the information is difficult to understand, because it uses non-intuitive codes and identifiers. Our experienced staff can break down the file into an easy to understand document that clarifies your principal liability, along with any penalties and interest.
6) Can you find out if I have deadlines?
Three things are certain with the government: Paperwork, procedures and deadlines. But it's tough to know who to contact and how to ask the right questions. Larson Financial makes it simple by handling the paperwork, understanding the procedures and clarifying deadlines. We will proactively contact the IRS to determine where you stand in the collection process. Furthermore, we can prevent collection action. Larson Financial is a full-service firm and we can handle all correspondence and negotiations with the IRS and state taxing authorities.
7) Can you negotiate down my taxes?
Yes. Through penalty abatement requests and settlements of the debt we can work toward reducing the amount owed to the taxing authorities.
8) Can you help release a wage garnishment?
Yes, Larson Financial can help release wage garnishments executed by states or the IRS.
9) What is the difference between a levy and a lien?
A lien is a claim on an asset that the government uses to secure a debt and may be used to enforce collection. When a levy is issued, the government actually takes money out of your bank account or collects money owed to you or your business.
10) How are taxes, penalties and interest calculated?
Unfortunately, this topic is beyond the scope of what we can address here. Each tax and each taxing authority has its own set of rules and variables.
11) Can I go to jail for owing taxes?
The federal government eliminated debtor's prison long ago. Nowadays, people usually only go to jail for tax evasion, or the willful exercise of not paying taxes on money earned.
12) Why can't my accountant or attorney do this for me?
In theory, accountants and attorneys may represent you in state or federal tax issues. In reality, however, it depends upon their specific area of practice. Unless your accountant or attorney regularly works with collection authorities, they may not have the practical understanding of someone who does this type or work on a daily basis. The consequences could be grave if your representative doesn't follow the correct procedure.
13) How does Larson Financial operate nationally?
Because of our expertise in collection procedures, we can effectively communicate with revenue officers across the U.S. via fax, email and phone. In fact, revenue officers tend to prefer such contacts because it eliminates the need for time-consuming and uncomfortable face-to-face visits. Similarly, our approach saves clients valuable time and money.