A huge percentage of all individual tax returns processed by the Internal Revenue Service's modernized account information computer system. Known as the Customer Account Data Engine, or CADE. This system is the centerpiece of modernization efforts at the IRS. CADE is handling significantly more tax returns each year. CADE, which is at the core of the effort to replace many of the agency's aging systems, dramatically speeds up internal IRS processing, permitting taxpayer accounts to update on a daily basis. This helps the IRS better administer the nation's tax system. The IRS is rolling out CADE in a series of "releases," each improving on and adding to the system capabilities. CADE was envisioned to replace the legacy Master File system, parts of which date back to the Kennedy Administration and will eventually house the account information of more than 200 million individual and business taxpayers.

The IRS will process nearly 140 million individual tax returns in 2008 and collect approximately $2 trillion in federal government revenue with the help of this system. Once processed by CADE returns are then analyzed by the computer system and compared against IRS data. As the computer processes each return error notices, balance due statements and audit alerts are all automatically generated. Each return requiring further collection is placed into a "notice queue" to receive a series of timely notices, each designed to increase compliance. If the computer notice is not successful in collecting past due tax or encouraging the taxpayer to file past due returns, the account is then assigned to the automated collection system (ACS), or in more extreme cases assigned to an IRS agent for collection.

Wage and bank account levies as well as federal tax liens can all be issued through the computer system. This highly impersonal way of enforcing the collection of taxes is often problematic and compounded by the "not so friendlier" IRS agents that man the phones at call centers. It's not an uncommon experience for a taxpayer to get lost in this complex "maze" and the pure frustration can become maddening. Often the frustration factor alone results in increased collection by the IRS because it's simply easier and more time efficient for some taxpayers to pay the computer generated bill, rather than fight it, even when the IRS is wrong. While the automation of an agency that employees nearly one million people makes sense from an efficiency standpoint, it likely spells continued frustration from a "customer service" standpoint. Taxpayer disagreements with computer notices and errors inevitably mean the involvement of a real live IRS agent after weeks or even months of frustrating phone calls.

Furthering taxpayer frustration as time passes, interest and penalties are accumulating. A simple tax problem can become a complex tax problem at blinding speed. Unfortunately the procedural steps to exercising these rights are often confusing and further must be implemented in a short period of time (usually 30 days or less). A competent professional can save you time, stress and money. Why? A tax professional deals with the IRS and taxpayer problems all day, every day. Most taxpayers only have limited contact with the IRS regarding their own personal circumstances. A competent tax professional on the other hand has seen a wide variety of tax problems regularly. In the long run you'll spend less time and SAVE money by hiring a competent professional to handle your tax problem, even the "minor" ones. Plus you'll have peace of mind and sleep a lot better each night. Why not give us a call tollfree at (888) 438-6474? We represent taxpayers in all 50 states and around the world.

Welcome to Tax Collection Tyranny in the Computer Age is a post from: IRS Tax Problem Solver Blog - IRS Help

The IRS may generally file a Federal Tax Lien against your personal and real property to secure the government's interest in your outstanding tax debt so it has priority over other creditors. If you receive a notice of federal tax lien, how can you get it removed? Outside paying off your tax debt in full or having the statute of limitations expire, removing a federal tax lien is a difficult task. Hiring a qualified tax professional to advise you and work on your behalf is almost always necessary if you cannot pay the debt in full, or if you cannot post a bond guaranteeing you will pay the debt in full. By law, a filed notice of tax lien can be removed if: the notice of federal tax lien was filed too early or violated IRS procedures, you enter into an installment agreement to pay the debt and the agreement provides for removal of the federal tax lien, removing the federal tax lien will speed up collection of the liability by the IRS, or removal of the federal tax lien would be in the best interest of both the taxpayer and the government.

The law requires the IRS to notify a taxpayer in writing not more than five business days after the filing of a lien. The IRS may give a taxpayer the notice of federal tax lien in person, leave it at the taxpayer's residence or usual place of business, or send it by certified or registered mail to the taxpayer's last known address. A taxpayer has the right to appeal a federal tax lien and can do so by requesting a Collection Due Process hearing by filing Form 12153 with the office listed on the notice of federal tax lien. A request for Collection Due Process Hearing must be postmarked by the date shown on the notice of federal tax lien. Some of the issues that can be discussed at the hearing include: the tax liability was paid in full before the IRS filed the lien; the IRS assessed the tax and filed the lien when the taxpayer was in a bankruptcy and subject to the automatic stay during bankruptcy; the IRS made a procedural error in an assessment; the time to collect the tax (called the statute of limitations) expired before the IRS filed the lien; no prior opportunity to dispute the tax owed was given to the taxpayer; there are alternative resolutions to satisfying the outstanding tax debt; or the taxpayer wishes to claim an innocent spouse defense.

If removal of a federal tax lien cannot be accomplished, at times the government will agree to a lien subordination which could allow you to get a second mortgage or refinance your real property in order to pay your outstanding tax bill. When the outstanding tax bill is paid in full, the government will remove the federal tax lien. There is no standard form available for an application for a Certificate of Subordination of Federal tax lien. A taxpayer must prepare the request in the form of a typed letter and included supporting documentation. Information on this process is found in IRS publication 784. Not all lenders will consider a mortgage that includes lien subordination and the process is complicated, consulting a qualified tax professional to help remove a federal tax lien is recommended.

Removing a Federal Tax Lien is a post from: IRS Tax Problem Solver Blog - IRS Help

Yesterday I was contacted by Gerri Detweiler who is associated with credit.com She had some questions about Federal Tax Liens, credit and how to get them released. While I was typing her answer, I thought that my blog visitors might benefit from this information as well.

1. When you pay or settle a tax debt, how long does it take the IRS to release the lien? What is the procedure for doing so?

Answer: The statute says that they have 30 days to release the tax lien. See Internal Revenue Code 6325. That's how it's supposed to work but in reality they often overlook it and it doesn't get done. If this happens then a taxpayer can contact the Lien Desk by phone ( 800) 913-6050 fax (859) 669-3805. If you look at a copy of an actual Form 668(Y)(c) Notice of Federal Tax Lien you will notice a bold black box about half down the page on the left hand side. It says that if the lien is not refiled by the refile date in column (e) then the lien is releaseable on its face. That sounds complicated but what it means is that if another lien wasn't filed before the dates in column (e) then the lien is no longer enforceable. This sometimes complicates matters because the IRS is often reluctant to issue a release for an expired lien.

2. Does the IRS automatically notify the credit agencies that the lien has been released? If not, what do consumers need to do to make sure their credit files are updated?

Answer: When the Certificate of Release gets filed in the courthouse where the lien was originally filed, theoretically the release should get picked up by the credit reporting agencies. A much better practice would be to order three official copies of the release and proactively send them into the three credit bureaus. It could take months or years for them to be automatically picked up by the bureaus.

3. What if you find an tax lien on your credit file and don't recognize it as yours? How do you research it to find out if it is valid?

Answer: This is a much trickier question. What you would need to do is research the public records offices of every county that you have lived in since the issuance of the Federal Tax Lien. The official name for this records office varies by state. In Florida it is called the Official Records of the Clerk of Circuit Court. In California it's called the Office of the Recorder. Some states have most if not all of these records online and some states have none of them online.

4. What if you find an old tax lien on your credit file and aren't sure you have paid it? What is the procedure for investigating it with the IRS?

Answer: You can call the IRS to inquire but this can sometimes exacerbate a problem that has long been dormant. The best way by far to investigate such a situation is to contact a tax professional, well versed in handling tax controversy cases and have them file a Freedom of Information Act request. This is very discreet way to inquire without setting the IRS Collection machine lose on a taxpayer.

5. What if you find an old tax lien on your credit file, believe you paid it but don't have records anymore? What is the procedure for investigating it with the IRS?

Answer: Similar answer to question 4. You will ultimately have to check with the IRS to see if the liability has been paid. It's important to note that there is a 10 year statute of limitations for the collection of the tax. The ten years begins to run from the assessment of the tax and there are many exceptions to this rule and circumstances that can cause the statute time to be extended (sometimes very significantly). This is another situation that is best left to a professional to decipher.

6. How long should you expect the above to take?

Answer: Such an analysis should take 60 -90 days. A lien release subsequent to a request 30-90 days.

7. What can you do to expedite the process if you are in the process of getting a mortgage, for example?

Answer: You could contact the Office of the Taxpayer Advocate for your local area. See the IRS website at www.irs.gov for the phone number for your local area. The Taxpayer Advocate is an independent branch of the IRS whose job it is to fix bureaucratic snarls and delays. There is no charge for their services. Using the Taxpayer Advocate can be very advantageous, especially from the point of view that you get one person to help you instead of speaking to anyone who answers the phone.

8. Are there any tips you would offer for consumers who find tax liens on their credit files?

Answer: Be very cautious about contacting the IRS about tax liens that may pop up. You can wake the sleeping giant and really turn your financial life into a living hell. It's best to get professional help unless you are sure that you have paid off the lien and it's just a matter of getting a release to clear up that issue.

All about Federal Tax Liens and Getting Them Released is a post from: IRS Tax Problem Solver Blog - IRS Help

If you have suffered the IRS Problem of a tax lien, you are ready to do whatever you need to do to be rid of it.  Your lien amount is a matter of public record until your lien is paid-in-full.  You will want to get this information removed from public record as soon as you can. 

How to Release a Tax Lien

•    Payment of the lien in full including penalties and interest due (payments can be made with a certified check, cashier’s check, or money order)
•    Acceptance of a bond guaranteeing payment of the lien
•    The lien becomes legally unenforceable because it has been 10 years since the tax was assessed
•    All fees charged to file and release the lien have been paid

You should receive a release of the lien within 30 days of payment, acceptance of bond, or it becoming legally unenforceable.  If not, you can request a Certificate of Release of Federal Tax Lien.  

How to Request a Certificate of Release of Federal Tax Lien

•    Use publication 1450 (Instructions on How to Request a Certificate of Release of Federal Tax Lien)
•    Call 1-800-913-6050
•    Write or fax the local Lien Processing Unit at:
             Internal Revenue Service
             CCP – Lien Unit
             P.O. Box 145595
             Stop 8420G Team #___ (number can be found on IRS website)
             Cincinnati, Ohio  45250-5595

             Fax numbers are located on the IRS website, www.irs.gov

Information Needed

•    Date of request
•    Name and address of taxpayer
•    Copy of Notice of Federal Tax Lien
•    Why you want lien released
•    Copy of receipt from the IRS showing paid in full or copy of canceled check or other proof that is accepted
•    Telephone number with best time to call

The IRS will confirm that you have paid off the lien and issue a release. 

If you are in need of a release immediately, visit or call your local IRS office.  You will need to provide proof of payment at that time.

It is important to know that the certificate you receive will not show the official recording information.  If you require a copy of the recorded certificate, you will need to contact the recording office where the certificate was initially filed. 

Resolving IRS Problems is what our office does.  Contact one of our knowledgeable staff for assistance with release of Federal tax liens or any other IRS Problems you may be experiencing.  Call us today.

Requesting a Release of Federal Tax Lien is a post from: IRS Tax Problem Solver Blog - IRS Help

You will receive notice of a tax lien if you owe taxes and the IRS’s attempt to collect them from you has failed. A tax lien gives the IRS the option of filing a notice in all the counties you live, work, and/or own property in stating that you have a tax debt. This lien is attached to all your assets and could affect your credit and your ability to sell or borrow against your assets. If your IRS Problems have come to this point, now is the time to get help.

Initially, the IRS sends out a notice requesting immediate payment. If you ignored this initial mailing for one reason or another then you should have also received subsequent mailings until the dreaded final notice. This notice gives you 30 days from the date of the letter to pay your taxes. You will not receive another notice and should expect action from the IRS anytime after this 30-day period.

If you are unable to pay your taxes in full at this time, you have two options: an extension of time to pay or an installment agreement.

Extension of Time to Pay

You will need to fill out Form 1127(Application for Extension of Time for Payment of Tax). To qualify for this option, you will have to prove that you are entitled to an extension. The IRS typically denies an extension because most people do not know how to provide this proof. You must show:

• That you are unable to pay on time due to circumstances beyond your control even though you did your best to plan for your taxes
• That you will not be able to pay your necessary living expenses and will encounter economic hardship if you pay on time
• That you agree to give the IRS security for the unpaid tax which means it will file a tax lien(which will be the IRS’s next course of action anyway)

If you are granted an extension, you may get up to 6 months more to pay your taxes. One benefit of an extension is that you will not be assessed penalties on your tax debt. You will, however, be assessed interest during the extension period. Another benefit is that the IRS cannot execute any other enforcement action during this time helping you to avoid a tax levy as long as you pay your debt by the due date.

You may also simply call the IRS at the number listed on the most recent notice and ask them for some additional time to pay. If you ask for a 120 day extension to pay, it will almost always be granted.

Installment Agreement

If you are denied an extension, your next step is to obtain an installment agreement. Form 9465(Installment Agreement Request) will need to be filled out. This form should be submitted along with your tax return.

The IRS cannot deny an installment agreement if you meet all of the following criteria:

• You owe no more than $10,000 (not including interest and penalties assessed)
• You have not failed to file, failed to pay, or received an installment agreement within the previous 5 years
• You can prove that you cannot financially pay the tax on time (agreeing to provide a financial statement is essential)
• You agree to complete payment within 3 years
• You will meet all your tax obligations during the agreement

Obviously, your best course of action would be to avoid a tax lien. Our office can guide you through the paperwork and answer any questions you may have about tax liens, extension of time to pay, or installment agreements. Contact us today tollfree at (888) 438-6474 so that you can get the IRS Help that you need.

Critical Information that You Need to Know to Avoid A Notice of Federal Tax Lien is a post from: IRS Tax Problem Solver Blog - IRS Help

Issues with the Internal Revenue Service can be a drag. The following types of IRS Problems can be handled with an IRS Appeal:

Tax audit results

Penalties assessed

Interest accrued

Notice of Federal Tax lien placement

IRS Tax levy placement

IRS Asset seizures

Offer in Compromise rejections

You may be receiving an IRS missive telling you that you can appeal the decision in the event that you're in this situation. If you do not agree with the bureau, then don't sign the agreement form that you received. An appeals hearing may then be demanded.

Take a close look. You may owe the IRS money and got bill. In this case, there is no possibility of an appeal. An appeals hearing isn't a possibility if you can't afford to pay what you owe to the Internal Revenue Service.

Prepare to give your reasons for disagreeing with the IRS decision. You will have to be able to support your reasons with documents.

Peruse the missive to find out how to prepare your request for an appeal, where to send the request, the deadline for receipt of the request, and what details must be included with the request.
Take note that interest and penalties will go on being accrued on your bill, even if you have sent a request for an appeal.

Appeals hearings may be informal, done by correspondence, telephone, or in person. You will be happy to hear that most disagreements with the Internal Revenue Service are fixed in appeals.

Your appeal's timeframe is determined by the type of situation you are appealing and the time it takes for the IRS to review your file. After you have sent your request, it takes 90 days before an appeals hearing happens. Touch base with the Internal Revenue Service office where your appeal was mailed to if you haven't heard from them in ninety days and they should be able to tell you when it was received. The 90-day timeframe for your hearing starts there.

The appeals officer can give you a more accurate timeframe. It could take a year to resolve an appeal.

If you're in the market for a Tampa Tax Attorney who practices all over the United States, give us a call tollfree at (888) 438-6474.

IRS Appeals – the right IRS Problem solution for you? is a post from: IRS Tax Problem Solver Blog - IRS Help

Many taxpayers with IRS Problems use the terms "lien" and "levy" interchangeably. They really are quite different. Learn the difference between an IRS Levy and an IRS Federal Tax Lien in the following video. A Federal Tax Lien is basically notice to the world that you owe money to the IRS and the IRS Levy is essentially a seizure of money or property. Learn more about the differences by watching the video. If you need immediate assistance with an IRS Problem, please visit my main site for IRS Problems.

What's the difference between an IRS Federal Tax Lien and an IRS Levy? is a post from: IRS Tax Problem Solver Blog - IRS Help