Final Notice of Intent to Levy – Now what?

Hi – Michelle Divan here.  I represent taxpayers in Denver, CO (& now Daytona Beach, FL!!)– and nationwide – who cannot pay their taxes or have back tax debt.  Each month I grab a topic that is germane to taxpayers that have debt or issues with the IRS.  Last month I focused on how to remove Tax Liens, and you can see my historic bloc posts here.  This month I am focusing my attention and education on collections and how to handle the letters of intent to Levy.

A quick lesson on the difference between a Tax Lien and a Tax Levy.  IRS will place a Lien to protect their place in line a debtor.  This is the same as the bank holding a lien on a car title for their car loan.  Check out my past blogs to see how get a Tax Lien removed or withdrawn.  An IRS Levy will allow the IRS to seize assets from bank accounts and/or garnish wages.  This is the serious step.

Let’s back up a minute…when the IRS sends you a Final Notice of Intent to Levy, this is actually your final wake up call!  These Letter 11’s and CP-504’s are the sign to pull your head out the sand and get to work.  You CAN have an IRS levy removed or stopped; you just have to deal with it.  But how? 

To have an IRS Levy stopped, you need to get a Form 12153 filed.  You need to prepare for an appeal process, and you need to get any compliance issues cleared up.  See, no big deal.  Yet, the process is scary.  This is where I can help.  I understand the process, how to get the correct forms complete, and how to get you into compliance.

Have you or someone you know received an IRS Final Notice of Intent to Levy? Or do you have other outstanding tax issues that you want solved?  Contact me today and let’s get working on this.  I can be reached at 303-250-0122 or mdivan@mdtaxpros.com

Liens and Levies – They are Coming!

Michelle Divan, EA
Michelle Divan, EA

Hi – Michelle Divan here.  I represent taxpayers in Denver, CO – and nationwide – who cannot pay their taxes or have back tax debt.  Each month I grab a topic that is germane to taxpayers that have debt or issues with the IRS.  Last month I focused on how to remove Tax Liens – selling your house, refinancing, and having them withdrawn, and you can see my historic bloc posts here.  This month I am focusing my attention and education on collections and how to handle the situation when you owe the IRS money.

Last week, I talked about the 15 MILLION collections letters that were mailed to taxpayers that could not pay their taxes that were due on May 15.  Please reach out to me if you received such a letter.  I can outline your options to address your tax bill.

This week, let’s talk about the scary letters: Liens and Levies.  A Tax Lien is a process that the IRS does to attach your property in order to protect their interest in the money you owe them.  A Tax Lien does not seize your assets, but it will limit your ability to sell, refinance, or get a loan against a property.  Tax Liens are nasty, but they are not the end of the world.  There are processes and procedures to sell property from under a Tax Lien, or even have the lien removed.

A Tax Levy is a notice of property seizure.  This is a notice that the IRS will seize assets in cash accounts, they will garnish future income, etc.  This is a situation you do not want to get into. The IRS has taken a “break” from sending out Final Notices of Liens and Intents to Levy.  This will be ending soon!  The IRS is gearing up to start sending out all the Final Intents Levy that have been on hold since the pandemic. 

How do you know if you are about to be levied?  Look for the following notice codes: CP504 and LT11.  These are notices to NOT be ignored.  Keep in mind, a Tax Levy is really your final wake up call.  A levy can be prevented, we just need to address it right away.

Are you or someone you know in this situation – or have other outstanding tax issues that you want solved?  Contact me today and let’s get working on this.  I can be reached at 303-250-0122 or mdivan@mdtaxpros.com 

The IRS Mailed 5 Million Collection Letters – Did YOU get one?

Michelle Divan, EA
Michelle Divan, EA

Hi – Michelle Divan here.  I represent taxpayers in Denver, CO – and nationwide – who cannot pay their taxes or have back tax debt.  Each month I grab a topic that is germane to taxpayers that have debt or issues with the IRS.  Last month I focused on how to remove Tax Liens – selling your house, refinancing, and having them withdrawn, and you can see my historic bloc posts here.  This month I am focusing my attention and education on collections and how to handle the situation when you owe the IRS money.

On June 15, the IRS mailed 5 MILLION collection letters…5 million.  That is a lot of taxpayers that were unable to pay their taxes.  Most tax preparers have seen several factors contributing this: lack of work due to COVID; reduced hours, etc. Couple that number with the collections cases the IRS already knew about pre-COVID – hint, it is over 15 million.  The IRS hired 10,000 new investigators to address these 15 million non-filing and collections cases.  The IRS halted many investigations and collection during the COVID crisis …. I am guessing that these 10,000 new employees are itching to get to work!

Ok – big numbers and statistics aside, what do you do if YOU got a collection letter?  Don’t panic, this is where I can help.  The first route would be to get you into a payment plan with the IRS.  While you will pay some interest, this gives you the freedom to spread these payments out.  Some payment plans, called Installment Agreements, can be spread out over 72 months.

While a payment plan, can help most taxpayers, sometimes the monthly amount owed will be a further financial burden.  Sometimes, if the numbers align, we can make an offer to the IRS for less than the full amount owed.  This is called and Offer-in-Compromise (or OIC.)  There are many rules and requirements to filing OIC’s and I can definitely help there!

Are you or someone you know in this situation – or have other outstanding tax issues that you want solved?  Contact me today and let’s get working on this.  I can be reached at 303-250-0122 or mdivan@mdtaxpros.com

Do you have an IRS Tax Lien you want removed? It can be done!

Michelle Divan, EA
Michelle Divan, EA

Hi – Michelle Divan here.  I represent taxpayers in Denver, CO – and nationwide – who cannot pay their taxes or have back tax debt.  Each month I grab a topic that is germane to taxpayers that have debt or issues with the IRS.  Last month I focused on Notice of Deficiency letters – the dreaded 90-day letter, and you can see my historic bloc posts here.  This month I am focusing my attention and education on people who have tax liens and how to deal with them.

In the last two weeks I talked about how to handle tax liens if you want to sell or refinance your property, both can be accomplished through a specific process. But, obviously, there is a process and you do have to pay the IRS debt first before anything else can be done.  So, what if that does not work for you?

Luckily, there is another option.  You can actually get the IRS Tax Lien withdrawn.  If you can get your debt below a certain amount and set up an Installment Agreement AND have three payments to this installment made via direct debit, you can apply to the IRS to have your Tax Lien withdrawn. This is the best possible scenario to get into. 

Once the IRS Tax Lien is withdrawn, you are free to sell, refinance, etc. without IRS approval or involvement. There is a process to handle this scenario and I can help you through that process.

Are you or someone you know in this situation – or have an outstanding tax issues that you need solved?  Contact me today and let’s get working on this.  I can be reached at 303-250-0122 or mdivan@mdtaxpros.com

Have a tax lien and want to refinance your house? Learn how!

Michelle Divan, EA
Michelle Divan, EA

Hi – Michelle Divan here.  I represent taxpayers in Denver, CO – and nationwide – who cannot pay their taxes or have back tax debt.  Each month I grab a topic that is germane to taxpayers that have debt or issues with the IRS.  Last month I focused on Notice of Deficiency letters – the dreaded 90-day letter, and you can see my historic bloc posts here.  This month I am focusing my attention and education on people who have tax liens and how to deal with them.

Last week I talked about how to handle tax liens if you want to sell your property. What if you you don’t want to sell your home and you want to refinance to take advantage of the low Interest rates? This is another issue I can help with. The IRS has the lien in your property to protect its interest In the debt.  If you show the IRS that their collection position will be improved, the IRS will allow you to refinance. And why not? It benefits both them and you.

If you are able to do a cash-out refinance, you can assign a full or partial amount of that cash to pay your debt to the IRS.  If you are refinancing to lower your payments, you will be able to show the IRS that you can now make large payments to them to satisfy the debt.

There is a process to handle this scenario and I can help you through that process.

Are you or someone you know in this situation – or have an outstanding tax issues that you want solved?  Contact me today and let’s get working on this.  I can be reached at 303-250-0122 or mdivan@mdtaxpros.com

Selling your house with a Tax Lien – It can be done!

Michelle Divan, EA
Michelle Divan, EA

Hi – Michelle Divan here.  I represent taxpayers in Denver, CO – and nationwide – who cannot pay their taxes or have back tax debt.  Each month I grab a topic that is germane to taxpayers that have debt or issues with the IRS.  Last month I focused on Notice of Deficiency letters – the dreaded 90-day letter, and you can see my historic bloc posts here.  This month I am focusing my attention and education on people who have tax liens and how to deal with them.

You have a tax lien on your house…that means you can’t sell until you get that debt paid, right?  Not exactly.  The purpose of an IRS tax lien is to protect the government’s interest in outstanding debt.  Many homeowners are sitting with a tax lien on outstanding debt, and think they need to pay that debt and get the tax lien cleared BEFORE they can list their home. That is not the case, there are specific steps that can be taken for a homeowner to sell their home, settle the debt to the mortgage company and the IRS, and release a clear title to the new buyer

Many homeowners in Denver, CO are sitting on gold mines in equity and want to take advantage of the real estate boom.  With a tax lien in place, it will be important to take a couple steps as you list your property to tell the IRS what will be done with the equity in the home.  There is a form to file with the IRS, to make specific allowance when you have equity to fully pay the IRS debt, partially pay the IRS debt, or what to do if there is no equity in the sale.  All of this can be handled by a tax resolution professional.  Remember, the IRS is looking to protect is position in a debt, not prevent the sale of your assets.

Are you or someone you know in this situation – or have an outstanding tax issues that you want solved?  Contact me today and let’s get working on this.  I can be reached at 303-250-0122 or mdivan@mdtaxpros.com

How to Handle Tax Liens!

Michelle Divan, EA
Michelle Divan, EA

Hi – Michelle Divan here.  I represent taxpayers in Denver, CO – and nationwide – who cannot pay their taxes or have back tax debt.  Each month I grab a topic that is germane to taxpayers that have debt or issues with the IRS.  Last month I focused on non-filing taxpayers, and you can see my historic bloc posts here.  This month I am focusing my attention and education on people who have tax liens and how to deal with them.

I am going to focus specifically on what to do if you want to sell or refinance your home and you have a tax lien.  Here in Denver, CO the real estate market is crazy – homes are selling within hours above the asking price…but, you have a tax lien on your house.  You know you could resolve some of the debt, or at least increase what you could pay the IRS, if only you could sell or refinance.  Just know that you are not stuck!

Depending on what you are trying to do, I can help you deal with that tax lien.  If you want to sell your home, I can work with the IRS to accept a payout on the debt – even if you have no equity in the home.  If you want to refinance, I can work with the IRS to allow you to take advantage of lower rates while addressing the debt you have with the IRS.

Do you want the IRS to withdraw the tax lien completely?  There are specific requirements you need to meet: your debt must be below a certain amount, you must be in a direct debit Installment Agreement (IA), and you must have made a certain number of payments toward this IA.  I can help you meet the requirements that are needed to do this, and then file the tax lien withdraw request with the IRS.

Are you or someone you know in this situation?  Contact me today and let’s get working on this.  I can be reached at 303-250-0122 or mdivan@mdtaxpros.com

You got a letter from the IRS? Read on…

Michelle Divan, EA
Michelle Divan, EA

Hi – Michelle Divan here.  I represent taxpayers in Denver, CO – and nationwide – who cannot pay their taxes or have back tax debt.  Each month I grab a topic that is germane to taxpayers that have debt or issues with the IRS.  Last month I focused on non-filing taxpayers, and you can see my historic bloc posts here.  This month I am focusing my attention and education on people who have received letters from the IRS and what to do.

The IRS mails letters or notices to taxpayers for a variety of reasons including:

  • You have a balance due.
  • You are due a larger or smaller refund.
  • The agency has a question about your tax return.
  • They need to verify identity.
  • The agency needs additional information.
  • The agency changed your tax return.

Here are some do’s and don’ts if you receive a letter:

  • Don’t ignore it. This is key – it will not go away! Most IRS letters and notices are about federal tax returns or tax accounts. The notice or letter will explain the reason for the contact and gives you instructions on what to do.
  • Don’t panic. The IRS and its authorized private collection agencies generally contact taxpayers by mail – not the telephone. Most of the time, all you need to do is read the letter carefully and take the appropriate action.
  • Do read the notice. If the IRS changed the tax return, you should compare the information provided in the notice or letter with the information in your original return. In general, there is no need to contact the IRS if you agree with the notice.
  • Do respond timely. If the notice or letter requires a response by a specific date, you should reply in a timely manner to:
    • minimize additional interest and penalty charges.
    • preserve your appeal rights if you don’t agree.
  • Do pay amount due. I offer this advice with caution. I always tell my client to call me first!  You should pay as much as you can, even if you can’t pay the full amount. You have options to pay balances due, such as Installment Agreements or Offers-in-Compromise.
  • Do keep a copy of the notice or letter. It’s important to keep a copy of all notices or letters with other tax records. You may need these documents later.
  • Do remember there is usually no need to call the IRS. If you must contact the IRS by phone, you should use the number in the upper right-hand corner of the notice. You should have a copy of your tax return and letter when calling. Typically, you only need to contact the agency if you don’t agree with the information, if the IRS requests additional information, or if you have a balance due.
  • Do avoid scams. The IRS will never contact a taxpayer using social media or text message. The first contact from the IRS usually comes in the mail. If you are unsure if you money to the IRS, you can view your account online.

I hope it goes without saying – call me first!  Generally, it is a simple question or issue, and you want to make sure that you respond per the IRS Instructions.  Need Help?  You can contact me here.

You received an IRS Notice of Deficiency letter…Now What?

Michelle Divan, EA
Michelle Divan, EA

Hi – Michelle Divan here.  I represent taxpayers in Denver, CO – and nationwide – who cannot pay their taxes, have back tax debt, or are dealing with an IRS Audit.  Each month I grab a topic that is germane to taxpayers that have debt or issues with the IRS.  Last month I focused on non-filing taxpayers, and you can see my historic bloc posts here.  This month I am focusing my attention and education on people who have received a letter from the IRS called a Notice of Deficiency. 

What is a Notice of Deficiency, or NOD for short?  The Notice of Deficiency is a letter that says you, the taxpayer, owes money to the IRS, and you are deficient in paying this debt, AND the balance is due in 90-days!  These are also called 90-day letters, and the deadlines are unbending!  Wow…sound scary?  It can be, and that’s why I want to help you either avoid and IRS Audit or deal with one.

Why is this a pressing issue right now? There are increasing numbers of Notice of Deficiencies being sent to taxpayers currently.  The IRS is so far behind in processing mail and responses.  While the IRS says all mail has been opened – all mail has definitely not been processed!  The IRS uses an Automated Underreporting process to send notices of under reported income, Joe Taxpayer may have responded to that notice and the response may be sitting under a pile of mail on a revenue agent’s desk.  But remember that word automated?  The IRS computer still thinks that Joe Taxpayer owes this money and sees no response…and…there’s your 90-day Notice of Deficiency letter.  There is a process involved in getting these resolved, and I can help.

Don’t try to handle these on your own!  If you or someone you know is in this predicament, let’s get it taken care of!  You can reach me at 303-250-0122 or via email at mdivan@mdtaxpros.com

Why you might want to file state taxes before the IRS!

Michelle Divan, EA
Michelle Divan, EA

Hi – Michelle Divan here.  I represent taxpayers in Denver, CO – and nationwide – who cannot pay their taxes or have back tax debt.  This month I am focusing my attention and education on people who have back taxes to file.  Last week we talked about filing status strategy for married couples.  (See the blog post here.)  This week, let’s focus on the why we might want to file state taxes before the IRS.

As you begin to get your documents together and have your taxes prepared, it becomes time to look at the bigger picture.  Look at your grand total of what you owe to the IRS and what you owe to the state.  When I am negotiating the collections with the IRS there is a formula that is used to calculate your collection potential.  The IRS has a clear policy on what debt can be included in your collection potential, and what cannot be included.  If you owe a significant amount to the state, it may benefit your negotiations with the IRS of we have already dealt with the state.

Once we know this, then I can strategically file your tax returns in a way that will be the most beneficial for you!  Then I can start negotiating the best option for you whether is an Installment Agreement, an Offer-in-Compromise, or Uncollectible status. 

Wondering what is right for you?  If you or someone you know is in this predicament, let’s get it taken care of!  You can reach me at 303-250-0122 or via email at mdivan@mdtaxpros.com