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Frequently Asked Tax Questions

Below you will find detailed and informative answers to common tax questions we have compiled over the years. While this page provides some quick information, the best way to get relief from all legal issues is to contact a professional lawyer. Willi Law Office, LLC, offers a free initial consultation to understand your situation and allow us to map out a solution to help you. Schedule your consultation today by calling us at 614-890-0500 or contacting us from this site.

I live in Ohio, but not in Columbus Ohio, can you still represent me?

Willi Law Office, LLC, strongly emphasizes their relationships across the state of Ohio and currently works with clients in Cincinnati, Cleveland, Akron, Toledo, Canton and more. Almost all of the services to be rendered in handling tax problems are accomplished by telephone discussions and correspondence with IRS agents. Much of the paper work can be faxed, e-mailed, or mailed for your convenience, and is often how we conveniently gather paperwork and documents from clients after face-to-face consultations.​

If you do not currently live in Columbus, you can do the initial consultation by telephone at your convenience by calling our offices at 614-890-0500 and scheduling an appointment. If you would prefer to meet face-to-face and can make the trip to Columbus, feel free to schedule an in-person appointment instead. To start on the road of tax recovery and end your tax problems call us today to schedule a complimentary phone consultation with one of our tax professionals.

I do not live in Ohio, can you still represent me?

Yes! Willi Law Office, LLC, can represent a client with federal tax problems from any state in the U.S. Additionally, if you currently reside in another state, but have old state tax problems from Ohio in addition to federal tax problems, we can help!​

You can complete the initial consultation by telephone at your convenience by calling our offices at 614-890-0500 and scheduling an appointment. Additionally much of the paper work can be faxed, e-mailed, or mailed for your convenience, and is often how we conveniently gather paperwork and documents from clients after face-to-face consultations. To start on the road of tax recovery and end your tax problems call us today to schedule a complimentary phone consultation with one of our tax professionals.

I have not filed tax returns for a number of years; should I file those returns? What may happen if I do not?

Willful failure to file a required tax return is a federal crime. A return is required to be filed even if no tax is due, if the individual had enough gross income to require the filing. If a prospective client advises us that he or she has not filed and was required to do so, we insist that the first thing accomplished is to have all required returns prepared by a competent tax return preparer and filed, which is a service we provide at our firm using in-house tax preparers. Usually, the government will not prosecute if the returns are filed as a part of a voluntary disclosure, meaning before the IRS notifies the taxpayer that it is aware that returns have not been filed.

What do I do about this notice the IRS just sent me?

First off, DO NOT IGNORE IT! It may be something simple like saying your income listed didn’t match what your employer reported or that you have a payment due. If you don’t understand what it is saying, you should consult a tax attorney who can explain things to you. If you ignore it, and the letter is date sensitive, you could lose your legal rights and leave yourself open for legal action, garnishments or liens against you.

What if the IRS wants to audit me?

It’s advisable to have a tax attorney contact the agent assigned to your case to determine the nature of the inquiry. Make sure all of your documentation is accessible and easy to read. If you cannot prove your income and deductions because your records are disorganized, you may be assessed additional taxes and penalties.

What is the Automated Collection Service (ACS) of the IRS?

The Automated Collection Service (ACS) is a division within the IRS that focuses on balance due accounts and non-filer cases—those taxpayers who owe the IRS money and/or have not filed tax return(s). ACS handles incoming and outgoing phone calls, generates wage and bank levies and sends out collection notices. Additionally, ACS monitors and tracks taxpayers’ accounts. Based on our experience, ACS can be very aggressive with its collection efforts.

What should I do if I can’t pay my taxes?

You have several options available to you:

*Currently Non-Collectible Status (or CNC): you may qualify if your monthly income is less than your monthly living expenses. To determine whether or not you may qualify for CNC status, our firm will gather recent financial history to prove to the IRS that your monthly expenses are greater than your monthly income, which makes you unable to pay.

* An Installment Plan: payment of your debt over a period of months or years.

* An Offer In Compromise: payment of only a portion of what you owe in one lump sum.

What is an installment agreement and how does it work?

In some cases, the IRS will enter into an agreement permitting the taxpayer to pay the taxes due over a period of time. However, penalties and interest will continue to accrue on the unpaid portion of the taxes.

What is an Offer in Compromise?

In certain circumstances, the IRS will accept less than the full amount due in full satisfaction of the tax liability. Usually it’s based on your inability to pay the full amount. In order for the IRS to determine whether it will accept such an offer, it’s necessary to submit complete and exhaustive financial information—including assets, liabilities and current average monthly income and expenses. If the offer is accepted, any tax liens filed regarding those taxes will be released. The IRS is prohibited from levying on assets while an Offer in Compromise is pending.

What is the process of submitting an Offer in Compromise?

For each offer you make, you must pay the IRS a $150 application fee and submit a deposit of funds equal to 20% of the total amount offered in your Offer In Compromise (as of July, 2006), which is non-refundable. This fee, and the deposit submitted with an Offer In Compromise, is designed to eliminate frivolous offers, but it is a small price to pay for the ability to possibly settle your tax debt for less than the total amount owed.

How do I know my settlement proposal will be accepted by the IRS? ​

Before submitting an offer to IRS, we do a thorough analysis of your income, assets, and overall financial situation to determine whether the IRS is likely to accept an offer, and if so, the amount of the offer they are likely to accept.  We will not recommend a tax resolution option unless we honestly believe in our professional opinion that it has a good chance of succeeding.

How long does it take for an Offer in Compromise to be approved by the IRS? ​

Depending on the caseload in your district, it generally takes six to twelve months. No matter how long it takes to review the Offer in Compromise, all further collection activities are suspended during that period.

What happens if the IRS accepts my Offer In Compromise?

Pay the agreed-upon amount due as soon as possible. Your tax attorney will explain the options, including a possible extended time to pay. You must also comply with all filing and payment deadlines for the next five years.

I owe taxes that have nothing to do with my present spouse; can they seize his or her assets to satisfy those tax debts?

No. But, in determining whether to accept an Offer in Compromise or in evaluating a proposed installment agreement, the IRS insists on knowing everything about the spouse’s assets, liabilities and monthly income.

If my spouse owes back taxes from before our marriage, will the IRS take my tax refund every year?

No. The IRS provides a simple procedure you can follow to make sure you receive your portion of the tax refund, even if your spouse owes back taxes. This IRS program is referred to as Injured Spouse Relief. In order to take advantage of this program, you must complete and file IRS Form 8379, Injured Spouse Allocation, at the time you file your joint income tax return. The IRS will use the Injured Spouse Form to determine the portion of the refund that should be allocated to you. The IRS may then refund the appropriate funds to you and apply the remaining refund to your spouse’s back taxes.

According to the IRS, to qualify for Injured Spouse Relief, you must meet the following:
1) You must not be legally obligated to pay the back taxes
2) You must report income such as wages, taxable interest, etc. on the joint return
3) You must have made and reported payments, such as federal income tax withheld from your wages or estimated tax payments, or you claimed earned income credit or other refundable credit, on the joint return.

If you do not complete the Injured Spouse Allocation Form when you file your joint tax return, the IRS will most likely keep the entire refund to pay down your spouse’s back taxes. Some people also try to solve this problem by filing as Married, Filing Separate. If you choose this solution, you will receive your refund. However, you may give up some important tax advantages. You should probably consult with a qualified tax preparer before making the decision to file separate returns.

Can the IRS still use collection procedures if I am paying on an installment plan?

Yes. If you don’t have the proper legal documentation submitted, the IRS can continue to levy and lien your assets. Make sure both you AND the IRS representative  sign your plan agreement.

Can I wipe out taxes by filing for bankruptcy protection?

Certain kinds of taxes may be wiped out, primarily income taxes that were assessed more than three years prior to the bankruptcy filing.  However, taxes known as “trust fund” taxes (meaning taxes withheld from employees but not paid over to the IRS or that should have been but were not withheld) cannot be eliminated in bankruptcy.

Can I avoid dealing with the IRS?

You should not avoid the IRS, but generally it is not recommended that you deal with the IRS yourself.  Once you have retained someone and filed the proper documents, the IRS may no longer contact you directly.

What do I do if an IRS special agent comes to my door? ​

IRS special agents are CRIMINAL INVESTIGATORS. The only thing you should say is: “I will have my attorney contact you in the next few days. I’m not prepared to say anything until I’ve talked to my attorney. Thank you.” Even though the special agent may suggest he could clear things up with a few simple questions, don’t be swayed into a discussion. Again, simply say you are going to contact your attorney and insist the agent leave, politely.

What if the IRS files a lien against me?

A lien will generally be filed against you if you ignore the IRS. You will usually have 30 days to object by filing a protest with the manager of the revenue officer placing the lien. If you don’t file your objection in the time allowed, you will lose your legal rights in this matter.

Why did the IRS file a tax lien against me?

A tax lien, usually filed with your county recorder, serves as notice to those who may loan you money (home or car loan, bank loan, credit card advances, etc.) that once the lien is filed, the IRS’ claim against you for taxes will come before those of anyone loaning you money after the filing. With certain exceptions it attaches to all property, real and personal, tangible and intangible, in which you have an interest, wherever the property may be located. A lien does not result in the actual seizure of any property, real estate or other forms. Further, before the IRS can file a lien against your property, it should give you 30-day notification that it intends to do so. This may give you time to make a payment or other arrangements.

The IRS is garnishing my wages. How can I stop them?

The IRS will garnish your wages after proper notice. All the IRS wants is payment or a good reason why you can’t pay. This is when you can negotiate a payment plan or an Offer in Compromise or convince the agency you are worthy of uncollectible status. It is imperative after you receive a notice of “Intent to Levy” that you deal with it immediately.  Intents to Levy are time-sensitive and if you miss your deadline to reply, i.e. make payment arrangements, your employer will be made aware of the situation and your wages may be garnished.  If you’re not sure how to go about this, consult a qualified tax attorney to assist you.

Can the IRS garnish all of my wages?

Many taxpayers think the IRS takes a certain percentage of a taxpayer’s income. In fact, the IRS only leaves taxpayers with a certain dollar amount depending on the taxpayer’s filing status. Thus, there could be two taxpayers who are single with no dependents with one earning $2,000 per month and the other earning $10,000 per month.  Both taxpayers will be left with the same amount of money in their check after the garnishment. Therefore, regardless of your income level, a wage garnishment can have a devastating impact on your personal finances.

How can I prevent the IRS from levying on my assets?

If you cooperate with the IRS, the collection officer assigned the account will normally suspend collection activity—at least for a while. But you must:

  • * File all tax returns due
  • * Pay all estimated taxes and taxes withheld from employees currently due
  • * Supply the IRS with detailed financial information regarding your ability to pay the taxes due

What if the IRS freezes my bank account?

The IRS should not freeze and seize your bank account without proper notice. Once your account is frozen, you only have a short period of time to protest before the bank must hand your money over to the Feds. You will need to negotiate either a partial or a full release of funds.

Can the IRS levy on my house? On my wages? On my bank accounts? What about retirement funds?

A levy usually means the property is actually seized by the IRS. In the case of real estate, it means the IRS can force a sale of the property and keep the proceeds up to the amount of taxes, penalties and interest owed.

A certain portion of wages and commissions are exempt from levy; the amount depends on a number of factors, including the number of dependents. All forms of bank accounts—savings, checking and CDs—are subject to a levy in full. In order to catch subsequent deposits, the IRS must serve a new levy on the bank. Once wages are levied upon, the same levy reaches all subsequent wages, commissions, bonuses, etc.​

No forms of retirement funds are exempt from levy, including social security payments and other forms of government pensions. However, unemployment and workers’ compensation benefits are exempt from levy, as are SSI and some forms of public assistance.​

A small amount of household and personal effects, and tolls and equipment used in the taxpayer’s trade or business, are exempt from levy.

Can the IRS seize my cars, truck and other vehicles?

Yes, but as a practical matter, unless the vehicles are of unusual value or type, the IRS rarely resorts to this.

What is the statute of limitations on taxes?

There is a three year statute of limitations from the date you file the original return for the IRS to assess taxes against you (assessment date) or two years from the date you pay your taxes.  The dates change based on certain circumstances.

There is NO limitation to audit and collect taxes if you filed a fraudulent return. The IRS will have ten years from the date of assessment to collect. Once again, all of the dates can be modified by agreement, various plans, etc. A tax attorney can give a more specific date based on your facts.

Is it possible to completely walk away from any tax liabilities? ​

Yes. With certain exceptions the IRS has 10 years from the date a tax is assessed to collect that tax. Once the 10 years has expired, all collection activity must cease. Any tax liens that have been filed must be released. (Assessment of a tax is made as a result of processing the return shortly after it is filed). The major exceptions are if the taxpayer is involved in bankruptcy proceedings or files an Offer in Compromise which is either rejected by the IRS or withdrawn by the taxpayer.

Why do I need to hire a professional to help me with my tax problem? Can’t I just handle it myself?

You certainly have the right to handle your tax problem yourself, and some cases are easier to resolve than others. However, dealing with the IRS can be very stressful and time-consuming, especially for those who are unfamiliar with IRS procedures. Hiring a professional provides a buffer between you and the IRS, and a professional who is experienced in handling tax issues can help you navigate through the process as quickly as possible, minimizing the interference in other aspects of your life. Willi Law Office, LLC, offers free initial consultations for tax matters. We will be upfront with you as to whether engaging our services would be cost-effective for your particular situation.

My CPA prepared my return.  Wouldn’t it be better to have him represent me in my audit?

There is an inherent conflict of interest if a CPA represents a client whose tax return he prepared when that return is being audited. When the IRS raises issues about the return, the CPA may get defensive in order to protect himself or justify the quality of his work, rather than focusing on how to best present the facts and information to the IRS on behalf of the client.   We call that “throwing the client under the bus.” In addition, attorneys have Attorney-Client Privilege, which CPAs do not. Your CPA may be great at deciphering the technicalities of the IRS Code, but Attorneys are trained and experienced at advocating for their clients, which is often what is needed when the IRS starts asking questions.

Am I going to jail?

Unless you have filed fraudulent tax returns or are a tax protester, the IRS is very unlikely to pursue a criminal case against you.  There is a greater likelihood that the IRS will file a Federal Tax Lien against you, or levy your bank accounts, paycheck and other assets if you have unpaid tax debt.  By law, the IRS must give you the opportunity to present evidence in your case, so dealing with your tax issue sooner rather than later can help prevent the IRS from pursuing these more severe actions.

Can IRS penalties and interest be eliminated?

The IRS is required by law to charge interest on unpaid balances due, so there is little that can be done to eliminate interest assessments. However, you only owe interest on the unpaid balance due, so paying as much as you can as soon as you can, or borrowing money from a third party, is often the most cost-effective way to reduce the amount of interest you will pay on tax debt.

Penalties, unlike interest, can be reduced or eliminated in certain circumstances. The law allows for penalty abatement in specific situations, so the possibility of penalty abatement is something that we consider in each case. Willi Law Office, LLC, will carefully analyze the facts of your case to determine whether penalty abatement is a viable option. If you are a candidate for penalty abatement, you could save thousands of dollars.

I have an issue with Payroll Taxes. Can you help?

In today’s economy it is very easy for a business with many operating expenses and reduced sales to be forced to dip into the payroll taxes account to keep their doors open and their lights on. Payroll taxes are funds that are withheld by employers in trust for the US government, and are frequently called Trust Fund Taxes. Failure to collect and submit this money to the IRS as required by law means you have committed a trust fund violation against the federal government, and that can mean big trouble. The federal government takes these violations very seriously and responds harshly to all responsible parties. Actions available to the government include locking your businesses doors and selling everything. Worse still, if the sale of your business’ assets do not cover the amount owed, the business owner is still liable for the unpaid balance. If you have a payroll tax issue, it is imperative that you obtain professional representation and deal with the problem as soon as possible.

I have unfiled tax returns. What should I do?

The first thing that needs to be done is to file those unfiled returns.  Tax problems cannot be solved if there are unfiled returns, and you will give up your right to any refunds you might have coming if you wait too long to file. Many tax problem solutions require that unfiled returns be filed before the IRS will consider any alternative resolutions such as Installment Plans and Offers in Compromise.

Can I settle with the IRS for less than what I owe?

Yes, there are potentially several options if you qualify. Despite what you may have heard advertised in the mainstream media, there are very specific rules involved in determining who qualifies for an Offer in Compromise (OIC), and not everyone does. Generally, if you have assets with equity, investments or a high income, you are unlikely to qualify for an OIC. However, Willi Law Office, LLC, can analyze your individual case to determine whether an OIC is appropriate.

Can the IRS take money from my bank accounts?

Yes. The IRS can take money from not only your bank accounts, but also your paycheck, retirement plans such as IRAs and 401(k)s, and the cash value of your insurance policies. The IRS action of taking money directly from a taxpayer’s paycheck or financial account is called a levy. A tax levy is a worst case scenario for a taxpayer. Many times, a levy can be avoided by contacting an experienced tax attorney before it is too late. Procrastination in dealing with an IRS issue is a serious mistake and only makes matters worse.

I owe the IRS much more than I can pay.  What can I do?

You are not alone – many taxpayers owe the IRS more than they can pay. And as penalties and interest continue to accrue on any unpaid balances, it may seem like you will never get out from under your IRS debt. There are many options that can help taxpayers resolve outstanding IRS debt, including, but not limited to, Offers in Compromise, Penalty Abatement, Innocent Spouse Relief, Currently Not Collectible Status, Installment Agreements, Statute of Limitations and Bankruptcy. Willi Law Office, LLC, can help determine the best options in your individual case.

My spouse has unpaid taxes.  Does that mean that I am also liable?

Possibly, if you are married and filed a joint return with your spouse. However, you may qualify for Innocent Spouse Relief in certain circumstances. This is a complex issue, and many factors are involved. If you feel that you are being unfairly held responsible for your spouse’s tax debt, contact Willi Law Office, LLC, as soon as possible to evaluate whether Innocent Spouse Relief is right for you.

Do you guarantee your results? 

We cannot guarantee what the IRS or state revenue agency will ultimately do in any given case, and no legitimate tax professional will. However, we can guarantee that we will work diligently in a competent, professional manner to ensure that you get the best possible resolution for your tax problem.

Do you offer free consultations on tax matters?

Yes, we offer free initial telephone consultations for tax matters. In most cases, we will ask you to send us some background information prior to the telephone consultation in order for us to better understand your circumstances. We will be up front with you as to whether engaging Willi Law Office, LLC, would be cost-effective for your particular situation.

What is the CARES Act?

The CARES Act, signed into law by President Trump on March 27, 2020, provides unemployment insurance relief during the COVID-19 outbreak. It gives states the option of extending unemployment compensation to independent contractors and other workers who are ordinarily ineligible for unemployment benefits.

What is the IRS Fresh Start Program?  Can it reduce my IRS tax debt?

The IRS implemented the Fresh Start program to help individual taxpayers and small businesses struggling with their taxes. The program can enable some financially distressed taxpayers to resolve their tax problems in as little as two years compared to four or five years in the past. There are income and tax liability limits to this program, and you must be current with your tax filings. Willi Law Office, LLC, can help determine if this program is a solution to your individual tax issues. 

What is an Offer In Compromise?  Can it reduce my IRS tax debt?

An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or if doing so creates a financial hardship. The IRS considers your unique set of facts and circumstances, such as ability to pay, income, expenses; and asset equity to determine if an Offer In Compromise is accepted.

The IRS generally accepts an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time. The Offer in Compromise program is not for everyone. At Willi Law Office, LLC, we will explore all available options, and only submit an offer in compromise when it is the best option for your set of circumstances.

What is an Enrolled Agent?

An enrolled agent is a tax professional who is licensed by IRS to represent taxpayers. As with CPAs, Enrolled Agents must pass a rigorous three-part exam on various aspects of federal income tax law, and they must also comply with annual continuing professional education requirements. At Willi Law Office, LLC, we have two experienced Enrolled Agents on our staff:  Julie Murawski and Mark Willi.

What is a CSED?

The CSED is the Collection Statute Expiration Date, or the time limit set by Congress that IRS has to collect any assessed tax (plus penalties and interest) that you might owe. After the CSED date passes, the tax that you owe disappears and IRS can no longer pursue collection actions against you. Generally speaking, the CSED date is 10 years from the date when the tax is assessed. However, there are a number of events that may extend the statute. When we begin a new case, we always start with a comprehensive analysis of the applicable CSED dates, as this is an important factor in determining which resolution options to pursue.

Tax And Advisory Attorneys

Are you ready to end your tax problems FOREVER? Our lawyers are fully licensed to handle federal tax matters in the entire US, state and local tax matters in the state of Ohio including major cities such as Cleveland, Columbus, Cincinnati and more. Don’t wait begin your tax recovery now by contacting us for a free initial consultation.

Our Areas Of Practice

  • Tax Audits
  • Wage Garnishments And Bank Levies
  • Installment Agreements
  • Offers in Compromise
  • Injured/Innocent Spouse Relief
  • Representing taxpayers before the U.S. Tax Court
  • Representing taxpayers before the Ohio Board of Tax Appeals
  • Bringing taxpayers into compliance
  • Sales/Use Tax determinations for businesses

Fill out a Case Evaluation Form for a free consultation, or call Willi Law Office, LLC, at 614-890-0500.

Are You A Real Estate Professional?

Handling taxes as a realtor is complicated. The tax professionals at Willi Law Office, LLC, can assist you with your tax problems, including income tax audits. We can also get rid of those pesky tax liens that are blocking the sale of your listing.  

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Meet Our Staff

Kaye P. Willi

Kaye P. Willi

PARTNER

For complimentary telephone consultation with a licensed tax professional call 614-890-0500 Today!