Glossary of Tax Terms

August 31, 2011 — Leave a comment

Bank Levy Release – If you find that you wake up one day and see your bank account completely drained and your identity was not stolen, then the IRS probably issued a bank levy on your account. The IRS will send letters of intent to levy to you and your bank. Normally a period of 21 days will be given to pay off your debt, or the IRS will take money from your account to pay off your taxes plus interest accrued on those taxes. We routinely secure bank levy releases by having our clients become compliant in their filing obligation (e.g. file unfiled returns) and by placing them on a payment plan, OIC, or CNC status.

Currently-Not-Collectible (CNC) – CNC is a temporary or permanent hold against collection of taxes from the IRS. In order to be eligible, you must prove that you do not have assets that allow you to pay any of what is owed. During CNC, interest is still accrued and the IRS still monitors your financial statements regularly.

Installment Agreement Taxpayers who cannot afford to pay back their tax liability can be offered to pay their taxes back in monthly increments by the IRS. Again, each taxpayer has a different financial situation, thus the IRS will determine the eligibility and amount of each installment on a case-by-case basis. Furthermore, a taxpayer must be compliant with all past tax filings in order to qualify for an installment agreement.

Full Pay Service – Sometimes it is hard to determine what a taxpayer actually owes to the IRS. With our Full Pay Service, we can assist you in determining what you exactly owe and how you can pay it off in a timely and efficient manner. We will also follow up with the IRS to assure your account has been paid in full and you are free of tax liability.

Offer in Compromise (OIC) – Taxpayers who cannot afford to pay back their tax liability can offer to settle for less than what they owe. In order to determine whether you are eligible, the IRS looks at your past, present, and future financial situation. It is essential to pre-qualify for an offer in compromise because everyone has different financial situations that distinguish them from their eligibility.

Wage Garnishment Release – Wage garnishment is essentially a deduction in wage that is allocated to the IRS as a result of tax liability. Up to 25% of your paycheck can be confiscated! A situation like this will occur if the taxpayer fails to pay their taxes or respond to the IRS’s request to pay taxes. At JDKatz, we negotiate for the release of wage garnishments and transition to an easier and better means of payment options, like an offer in compromise, or installment agreement.

Payroll Tax Representation – Payroll taxes encompass the Medicare tax and Social Security tax taken out of your income. Employers allocate a sum of payroll taxes from the money earned by employees to the IRS by law. These withholdings must be sent to the IRS with Form 941 (Employer’s Quarterly Federal Tax Return) and Form 940 (Employer’s Annual Federal Unemployment Tax Return). Without representation, an employer who has not fully paid payroll taxes could increase their liability significantly. At JDKatz, our tax professionals act as liaisons between the employer and IRS to provide Payroll Tax Representation for a favorable outcome to our clients.

Revenue Officer Assistance – A revenue officer is a representative from the IRS who collects taxes for accounts that still have tax liabilities. The officer has the authority to garnish wages, levy bank accounts, file Federal tax liens, and seize assets. Although, as a citizen, you must know your rights and privileges when dealing with revenue officers, you generally should avoid dealing with the agent directly, having the agent visit your home or business, or speaking with your friends or co-workers. Revenue Officers are not your friends—they are trained to recover as much money as possible for the US Government. They may also refer your case to a Department of Justice prosecutor if they believe that you are trying to evade your tax filing obligations. While you should not make false or misleading statements to the agents. We generally advise our clients to avoid making any statements in the absence of counsel. Our tax professionals work closely with the revenue agents, to provide a buffer between you and the agent.

Tax Account Review (TAR) – The Tax Account Review Service (TAR) assists taxpayers in specific information about their accounts from the IRS. Taxpayers often find themselves wondering what they are actually paying for and why a lump sum of money is going straight to the government. At JDKatz, we give clear, concise and specific information to clients about the status of their accounts.

Taxpayer Advocate Service (TAS)– The Taxpayer Advocate Service (TAS) is an independent organization within the IRS. TAS helps taxpayers who are experiencing economic harm, such as not being able to provide necessities like housing, transportation, or food; taxpayers who are seeking help in resolving problems with the IRS; and those who believe an IRS system or procedure is not working as it should. TAS provides emergency access to the IRS to help resolve tax issues which Taxpayers are unable to resolve on their own. JDKatz often works with the TAS to help resolve Taxpayer issues where traditional means have been unsuccessful.

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