The highly qualified tax attorneys of Kingett Warren, P.C., all of whom are former Certified Public Accountants with Post Doctorate degrees in Taxation (LL.M.), offer sophisticated representation for disputes with the IRS or state tax authorities. Serving clients in New Jersey and Pennsylvania, we represent individuals and owners of closely held businesses in IRS audits, appeals, collection matters, and U.S. Tax Court litigation. We regularly counsel and represent business owners, business executives, professionals and other high net worth clients in disputes over individual income taxes, corporate income taxes, New Jersey estate and inheritance taxes, Pennsylvania estate taxes and federal estate taxes.
Settling Tax Debt
You may have heard that tax debts can be settled for less than “what is owed”. Tax debt may be settled for less than “what is owed,” however this is the exception and not the general rule. Settlement of a tax debt typically involves an Offer in Compromise (OIC), which is an agreement between a taxpayer and the IRS under which the IRS agrees to accept less than the full amount owed.
Usually the IRS will not accept an OIC unless the amount offered by the taxpayer is at least the reasonable collection potential (RCP). The RCP is how the IRS measures the taxpayer’s ability to pay. It includes the value that can be realized from the taxpayer’s assets, such as real property, automobiles, bank accounts, and other property. The taxpayer’s anticipated future income, less certain amounts allowed for basic living expenses, must also be included.
We can analyze your unique situation and implement strategies that optimize your chance of a successful settlement of your tax debt.
The IRS can “pierce the corporate veil” and assess certain business taxes to individuals. These taxes are called Trust Fund taxes and include payroll taxes. In many cases, we are able to help avoid the personal assessment altogether. In some situations, we can set up a resolution that will keep the IRS collecting from you personally.
An IRS audit can mark the beginning of a difficult process that can lead to tax penalties and, in some cases, criminal prosecution. We can assist you by managing the audit while minimizing the strain an audit puts on you and your family, and minimizing the disruption of your business operations.
There is a wide range of circumstances that are considered “Reasonable Cause Criteria for Penalty Abatement.” If any of the following have contributed to your tax penalties, you may be eligible for penalty relief:
Ignorance of Law, Forgetfulness, Mistake, Death, Serious Illness or Unavoidable Absence, Inability to Obtain Records, Statutory Exceptions, Undue Hardship, Written and Oral Advice from the IRS, Advice from a Tax Adviser, Fire, Casualty, Natural Disaster, or Other Disturbance.
We will prepare and submit your Penalty Abatement request and go through the proper channels within the IRS to give you the best chance of penalty relief.
Monthly Payment Plans
We can help you obtain an affordable monthly installment plan and stop the IRS from garnishing your paycheck and seizing your assets as long as you make your payments. Many times, an Installment Agreement can be made together with Penalty Abatement, thus reducing your overall liability, creating a payment plan you can afford, and stopping the IRS from taking any further collection action against you.
Innocent Spouse Relief
Each spouse filing a joint tax return is liable for the income tax debt of their spouse unless the individual can qualify for “innocent spouse relief”. To qualify for relief, the taxpayer must show that the couple filed a “joint return,” that the return contained an understatement attributable to “erroneous items” of the other spouse, and that in signing the return, the “innocent spouse” did not know or have reason to know of the understatement. If you have filed jointly with a spouse at any point in time, and are being pursued by the IRS, we may be able to help you qualify for innocent spouse relief and provide the tax relief you deserve.
Liens, Levies and Wage Garnishment
When taxpayers are delinquent in payments owed to the IRS, the government has the right to place a legal claim on their bank accounts and other property. We can help you to resolve this problem so that you can protect your assets and income.
Unfiled Tax Returns
If you have not filed all legally required tax returns, the IRS will not consider any type of tax settlement or monthly payment plan to settle your back taxes. We can help you file all delinquent tax returns and get you back into compliance with the IRS.
Sometimes, despite best efforts, it is just not possible to pay all outstanding debts in full. Some tax debts may be eligible for discharge under Chapter 7 or Chapter 13 of the Bankruptcy Code. We can help you determine whether a bankruptcy action is advisable to obtain relief.