As a tax attorney, I see people with IRS tax problems that have lasted for years. Yet they only get serious when tax time rolls around. It most likely is the case because during tax season you hear everyone talking about it.
This places focus on the subject and creates a great deal of stress for delinquent taxpayers. January happens to be the “resolution’ month for all kinds of things imaginable, including taxes. It’s when people want to do something to change or improve their lives. The only thing is there’s that nagging thought that they haven’t paid taxes in decades!
Actually, I can’t recall a time of year that people are more active than in January.
As an attorney, my job is to realize the very best outcome for my clients with IRS tax problems. I advocate for my clients just as IRS employees advocate for the IRS. Their goal is to win—it’s the same as mine.
With IRS Tax Problems, It Pays to Know the Laws
It pays to know the laws of your state. Take, for instance, here in Florida, there’s a strong homestead exemption law that has two definitions. The first definition deals with tax breaks that you can get for homesteading your real estate. Then, there is the definition that refers to your home being exempt from all creditors if a lawsuit judgment is levied against you.
In so many words, a homeowner can’t be forced to sell their house to pay for a judgment. A good example of this is when O.J. Simpson moved to Florida from California.
On the other hand, there’s a thing called the supremacy clause. This upholds the proposition that when there’s a conflict between state and federal law; federal law reigns supreme. So, in reality, you can lose your house to the IRS when there’s an unpaid debt, but it’s rare.
I’ve represented thousands of people, and there are occasions when a person will lose their home. However, it usually happens to those who fall under the category of being tax protestors.
These are people who don’t think taxes are constitutional. The reality is I just don’t prescribe to all the excuses that people throw on the table. My job is to represent the client and work toward the best tax solution possible.
These are people who will file 1000 or more pages with the IRS over a ten-year period rebutting the system. What happens is the IRS finally gets fed up and decides to make that person’s life a living hell. These are the folks who may end up losing their home. Otherwise, as an attorney, I can safely say that it’s rare for the IRS to take a person’s home to satisfy a tax debt.
The Difference Between a Lien and a Levy
Believe it or not, the majority of people don’t know the difference between a lien and a levy. They’re not the same, even though people use them interchangeably. Lien is the good one, and levy is the bad one. Levy means the IRS is going to seize something.
A lien is simply when the IRS files paperwork stating that a person owes them money. This lien actually gives formal notice to the world that an individual owes a debt. The lien will show up on your credit report and can hurt your chances of getting loans or purchasing things.
People should know that a lien damages their credit for about 50 points and that it can attach to property that’s real or personal. The lien can attach itself to anything a person owns—even socks in their underwear drawer.
The Taxpayer Bill of Rights
There is something called the taxpayer bill of rights, and it actually discourages the IRS from seizing a person’s property. This works for people who have pushed the IRS too far, for years even. This clause prevents the IRS from just unilaterally seizing property.
They have to file a lawsuit and a district court must sign off on the lawsuit. Then, a whole set of procedures and processes must be observed. There’s a strong government bias about throwing people out of their primary home, and that’s a good thing. But, if there’s a tax lien against someone’s home who dies, the IRC can get involved in state proceedings.
The IRS Taxpayer Advocate Service
This is an independent brand of the IRS. Their job is to help unravel bureaucratic snarls where nothing is getting done. People are locked up in a mess when using this service. As a tax attorney, I know that I can solve a problem because the IRS may have done something inappropriate, or even illegal.
This is not coming down on the IRS in a bad way, but things do happen. Even though these advocated do work for the IRS, and are more like a liaison than anything else.
National Taxpayer Advocate
Take it up another notch and there’s such a thing as national taxpayer advocate that’s appointed by Congress. This person’s name is Nina Olsen, who has been in office a long time. Providing a valuable service each year by putting out an annual report to Congress outlining problem areas in dealing with the IRS.
She also outlines solutions and helps to solve problems on a daily basis. Those of us deeply involved in the business tend to agree with her. When she releases a report, we read it because we’re serious about helping clients.
Systematic IRS Tax Problems
Systematic problems are those that keep occurring over and over. An example would be when filing an Offer in Compromise (OIC). We make sure all the client’s paperwork is up to speed. Things go wrong when the IRS doesn’t include information in our filing.
While the Offer in Compromise is pending, they’re supposed to stop all collection action. Sometimes they don’t, and that can present a problem. As tax attorneys, we want everything to stop so that our client has time to recoup.
Imagine the horror of someone who hasn’t filed in decades, even 30 years or more. The fear must be numbing. The person will have to file for the last six years, at least. It’s possible to find W-2 forms but it complications come up for those who are self-employed.
Just think of all the expenses, mileage that could be filed, income earned, and everything else that has to be gathered. Throw in the fact that most people aren’t good bookkeepers. This only makes matters worse.
We’re Not Just Numbers Guys
Unfortunately, people often delay paying their taxes and they compound their problem by thinking of us tax attorneys as just being numbers guys. But that’s not the case, and it’s not that cut and dry. My own background started as a criminal defense attorney.
I became a tax attorney due to a special set of personal circumstances. I studied IRS rules and now I know them better than most IRS employees. My mission is to always apply my knowledge to a client’s problem and offer them the best solutions to solve their IRS tax problems.
It’s not about the numbers or money. It’s all about helping people out of a tight situation. I have a particular skill that many people simply don’t have. And that makes the skill a valuable commodity.
What to Expect from a Qualified Tax Attorney
The first thing I tell clients is that their situation may not be as bad as they think. The fact they’re considering using my service is a step in the right direction. I calm the client down and try to first remove the fear.
Fear makes people do crazy things. Many of my clients worry about going to jail. That’s a rare scenario. They’re late on their taxes, so we concentrate on bringing everything up to speed. Once things are in motion, my clients can see that their fears were ungrounded and that things are well on their way to a solution. As I’ve said time and again, my mission is to provide solutions.
If you’re interested, you can learn more about it during my podcast episode, “Are You Going to Lose Your Home Over Unpaid Taxes“.