Andrew Samaniego | Tax Resolution Blog | CA

Archives for August 2024

Getting the IRS to Withdraw Its Lien Notice: Essential Steps

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As I wrap up the final touches on my upcoming book, IRS Battle Plan: Guide to Winning Your Tax War, I’ve been diving deep into strategies for tackling some of the toughest challenges posed by the IRS, including the dreaded tax lien. Before diving into how to get such a lien withdrawn, it’s crucial to understand the chain of events leading up to this severe action, especially if you’ve recently received an IRS Letter 11.

The Prelude to a Lien: The Critical Role of IRS Letter 11

In the last two weeks alone, the IRS has sent out millions of Letter 11 notices. If you’ve received one, it’s a clear signal that the IRS is serious about collection. This letter isn’t just a warning; it’s a prelude to more drastic measures, such as tax liens or levies. This is your wake-up call, signaling that immediate action is necessary.

Why is an Enrolled Agent crucial now? As an Enrolled Agent, I specialize in tax resolution and can act as your authorized representative before the IRS, handling negotiations and paperwork on your behalf. If you’ve received a Letter 11, consulting with an Enrolled Agent like myself is crucial. We have the expertise to navigate the complex IRS landscape and can develop a strategy to respond effectively, potentially preventing the situation from escalating to a lien.

Why a Lien Withdrawal Matters

A tax lien is a public declaration by the IRS that it has a legal claim against your property due to unpaid tax debt. This notice can severely damage your credit, hinder your ability to use or sell your assets, and tarnish your financial reputation.

Step-by-Step Guide to Withdrawing an IRS Lien Notice

Here’s how you can combat an IRS lien effectively:

Step 1: Understand the Lien Process Learn why the lien was filed to better understand how to address it. Liens follow serious delinquencies and unresolved debts.

Step 2: Get Current Ensure all tax returns are filed. This is your foundational step toward resolution.

Step 3: Pay the Debt or Make Arrangements If possible, clear the debt. If not, negotiate an installment agreement that fits your financial situation.

Step 4: Apply for a Withdrawal Submit IRS Form 12277, requesting the withdrawal of the Notice of Federal Tax Lien, once you’re compliant and have a plan in place.

Step 5: Advocate for Your Case Active follow-up is essential. Provide additional documentation and communicate regularly with the IRS through your Enrolled Agent.

Why Act Fast?

The issuance of Letter 11 is a critical juncture. Fast, informed action is necessary to prevent the escalation to a lien, which can further complicate your financial life.

Conclusion

Dealing with the IRS, especially when facing the threat of a lien, can be daunting. The right guidance and action plan can make a significant difference. If you’ve received an IRS Letter 11 or are under threat of a lien, don’t wait. Visit CrushIRSAnxiety.com to download my e-book for comprehensive strategies on managing your tax issues. As an Enrolled Agent, I’m here to help you navigate these troubled waters, ensuring you take the right steps to protect your assets and peace of mind.

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com

The IRS is Coming After You NOW: Understanding Letter 11(LT11) and Your Immediate Action Plan

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Hey there! Just wrapped up day two at the National Association of Tax Professionals Conference, and let me tell you, the atmosphere was electric—charged with a mix of anticipation and a dash of dread. Why the dread? Well, the IRS agents dropped a bombshell: they’re unleashing thousands of LT11 notices. Those in the know call this deluge “The Tidal Wave.” It’s a clear signal: the IRS is not just knocking; they’re banging down doors demanding their dues.

What Exactly is an LT11 Notice?

For those out of the loop, an LT11 notice, or Letter 11, is essentially the IRS’s final warning shot before they take serious collection actions against you. This notice is the last courtesy call before levies are placed on your assets, including bank accounts, wages, and even your home. Yes, it’s as scary as it sounds, but here’s the kicker—you can still act to prevent this financial catastrophe.

Why You Should Take an LT11 Seriously

Receiving an LT11 means you’re on the brink. The IRS is gearing up to take whatever they can to settle your debt, and they’re legally armed to do so. Ignoring this letter is like ignoring a ticking time bomb in your lap. But here’s your silver lining: the LT11 also means you still have a small window to negotiate or pay before the IRS moves forward with harsher measures.

What Can You Do to Stop the IRS Today?

  1. Don’t Panic, Act! First and foremost, keep your cool. Panicking won’t help, but taking immediate action will. This is your last chance to take control of the situation.
  2. Understand Your Rights The LT11 should come with a notice of your right to a hearing (also known as a Collection Due Process or CDP hearing). Requesting this hearing can temporarily halt any collection actions, giving you time to sort things out.
  3. Set Up a Payment Plan If you can’t pay the full amount right now, setting up a payment arrangement might be your best bet. The IRS is often open to installment agreements if you approach them before they start enforcing collection.
  4. Consider an Offer in Compromise (OIC) This is a long shot, but it’s worth considering. An OIC allows you to settle your tax debt for less than the full amount you owe. It’s a complex process, but if you qualify, it could significantly reduce your burden.
  5. Get Professional Help This is not the time for DIY tax management. A tax professional, especially one skilled in dealing with IRS disputes, can be your lifeline. They can help you understand your options, represent you in negotiations with the IRS, and even accompany you to your CDP hearing.

Conclusion: Don’t Wait for the Wave to Crash

If you’ve received an LT11, the clock is ticking. Every moment counts, and taking swift, informed action is critical. This is your chance to get ahead of the wave before it crashes down.

Need more guidance? I’ve got you covered. Visit CrushIRSAnxiety.com to download my e-book, packed with strategies on how to handle your IRS issues effectively. Whether you’re dealing with an LT11 or any other IRS notice, it’s time to turn your anxiety into action. Don’t let the IRS dictate your next move—take charge today!

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com

Inside the IRS Office of Criminal Investigations: Why It Matters to You

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Hello from the front lines at the National Association of Tax Professional’s conference! Day 1 has wrapped, and who were the first “stars” on stage? None other than the IRS, with a special spotlight on their Office of Criminal Investigations. It’s a thrilling (and slightly terrifying) time as they ramp up their efforts, particularly against fraudulent activities surrounding COVID incentives like the ERC Credit.

The IRS Means Business

This year, the IRS isn’t just about collecting taxes—they are on a crusade against fraud. With over 386 investigations targeting nearly $3 billion in fraudulently claimed ERC credits, it’s clear they’re not just dipping their toes in the water; they’re diving in headfirst.

What is the Office of Criminal Investigations?

This specialized unit within the IRS focuses on cracking down on tax fraud and ensuring compliance through rigorous enforcement. They’re the IRS’s elite squad, equipped with tools, resources, and a mandate to sniff out deceit and ensure that everyone plays by the rules.

Why Should You Care?

Now, you might be thinking, “I’m no fraudster; why should this matter to me?” Well, here’s why:

  1. Increased Scrutiny: With the IRS ramping up its fraud detection efforts, there will be a broader net cast, which means more audits and reviews. If you’ve fallen behind on filing your taxes, this could spell trouble. It’s not just outright fraud they’re after; discrepancies, omissions, and mistakes can also draw their attention.
  2. Harsher Penalties: The IRS is cracking down not just on intentional fraud but on negligence as well. Penalties for mistakes that might seem innocent can be severe, adding financial insult to injury if you’re already struggling.
  3. Long-Term Implications: Being flagged by the IRS can lead to long-term scrutiny. Once you’re on their radar, it can be challenging to shake off, making future financial moves more complicated.

How Can You Protect Yourself?

Here’s the good news: it’s not all doom and gloom. There are proactive steps you can take to protect yourself from the prying eyes of the IRS Office of Criminal Investigations:

  • Stay Compliant: First and foremost, get your tax filings up to date. If you’ve missed the past three years or more, it’s time to get those returns filed. The longer you wait, the worse it gets.
  • Understand the Rules: Especially if you took advantage of any government incentives like the ERC Credit, make sure your claims were legitimate and well-documented.
  • Seek Professional Help: Navigating the complexities of IRS rules can be daunting. Working with a tax professional, especially one experienced in dealing with IRS disputes, can be your best defense.

Ready to Dive Deeper?

Feeling overwhelmed? You don’t have to go it alone. To arm yourself with more knowledge and strategies on how to deal with potential IRS scrutiny, download my eBook at CrushIRSAnxiety.com. It’s packed with insights and tips on staying off the IRS’s radar and keeping your financial life in smooth sailing.

Remember, in the world of taxes, being proactive is always better than being reactive. Equip yourself with knowledge, get the right help, and take control of your tax situation before it controls you.

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com

The 10-Year Collection Statute: Your Unexpected Lifeline

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It’s hard to believe that it’s been over a decade since I first set foot in the Naval Academy Preparatory School in Newport, Rhode Island, embarking on what would be a transformative 10-year journey with the Navy. From training in Annapolis to serving on two destroyers in San Diego, the time has flown by. And speaking of a decade passing, did you know that 10 years holds significant meaning not just in personal milestones but also in the realm of tax debt? Yes, that’s right—10 years could be the lifeline you need if you’re drowning in tax debt.

Understanding the 10-Year Collection Statute

The IRS isn’t known for its leniency, but there is a rule that might work in your favor—the 10-Year Collection Statute. This rule limits the time during which the IRS can legally collect taxes you owe. Once this 10-year period lapses, your tax debt, in most cases, becomes uncollectible; effectively, it expires.

How Does It Work?

When you owe the IRS money, the clock starts ticking on the date the tax was assessed, which is typically close to the filing date. From that moment, the IRS has 10 years to collect the tax debt. This includes using measures like levies, wage garnishments, or seizing assets. Here’s what you need to know:

  1. Date of Assessment: Understanding the exact date your taxes were assessed is crucial. This is your start line.
  2. Tolling Events: Certain actions can pause (toll) this statute, extending the IRS’s time to collect. This includes filing for bankruptcy, submitting an offer in compromise, or requesting a collection due process hearing.
  3. Stay Informed: Keep track of all communications and changes regarding your tax account. Don’t assume; verify all dates and understand how any actions you take might affect the statute.

Why This Matters to You

For those of you who haven’t filed your taxes in over three years, this might sound like a potential escape route, but tread carefully. If the IRS hasn’t assessed your tax due to non-filing, the statute hasn’t started yet. Your first step should be to file those back taxes. Only then can the 10-year clock start ticking, paving the way to potential freedom from past tax debts.

How to Navigate This Lifeline

Here’s how you can use this information to your advantage:

  • File Your Taxes: Even if late, get your returns filed. Only assessed taxes start the 10-year clock.
  • Check the Assessment Date: Find out when the IRS assessed your tax debt. This is often documented in your tax records.
  • Monitor Tolling Events: Be aware of any actions that might extend the collection period and plan accordingly.
  • Consult a Professional: Navigating IRS statutes can be complex. Consider consulting with a tax professional who can offer personalized advice based on your specific situation.

Conclusion

Just like reflecting on a decade of naval service reveals growth and challenges overcome, understanding the significance of the 10-year rule in tax collection can provide a strategic advantage in managing your tax affairs. If you’re wrestling with the weight of unresolved IRS debt, remember that time might be on your side.

Interested in diving deeper into strategies to manage or even escape tax debt? Visit CrushIRSAnxiety.com to download my e-book, which offers detailed insights into navigating complex IRS issues, including how to leverage rules like the 10-Year Collection Statute to your benefit. Don’t let past tax mistakes anchor you down—there might just be a lifeline waiting.

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com

IRS Collection Notices Decoded: What They Really Mean

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If you’re like thousands of Americans who’ve received a letter from the IRS this year, you might be scratching your head wondering what it all means—especially if you haven’t filed your taxes in the past few years. These notices can be daunting, cryptic, and honestly, a little intimidating. But fear not, I’ve broken down some of the most common IRS collection notices to help you understand exactly what they’re telling you and what you need to do next.

Understanding Your IRS Notice

First off, don’t panic. Each notice has a specific purpose and a specific response required. Here’s a cheat sheet to some of the most common notices people receive:

  • CP 09: You might be entitled to the Earned Income Credit. Good news if you’re eligible!
  • CP 10: Changes to your tax return have reduced the amount applied toward your estimated tax payment.
  • CP 11: Changes to your tax return show that you owe a balance.
  • CP 11A: Changes to your tax return and Earned Income Credit show that you owe a balance.
  • CP 12: Changes to your tax return resulted in an overpayment. You might get a refund.
  • CP 13/CP 13A: Changes to your tax return with no refund or balance due.
  • CP 14: You owe a balance, but there’s no math error.
  • CP 16: Changes to your tax return mean an overpayment was applied to another balance you owe.
  • CP 21B: A data processing adjustment resulted in an overpayment of $1 or more.
  • CP 22A: A data processing adjustment shows a balance due of $5 or more.
  • CP 22E: Examination adjustment notice indicates you owe a balance.
  • CP 23: There’s a discrepancy in your estimated tax payment, and you owe a balance.
  • CP 32A: The IRS wants to send you a new refund check.
  • CP 45: A reduced amount was applied toward your estimated tax payment.
  • CP 49: Overpaid taxes were applied to other taxes you owe.
  • CP 54B/CP 54E/CP 54G/CP 54Q: There’s a problem with your name and identifying number.
  • CP 59: This is the first notice requesting your tax return.
  • CP 75/CP 75A/CP 75B: Your Earned Income Credit portion of the refund is delayed.
  • CP 79: You need to meet an Earned Income Credit eligibility requirement.
  • CP 79A: You face a two-year ban on the Earned Income Credit.
  • CP 90/CP 297: Final notice of intent to levy and your right to a hearing.
  • CP 91/CP 298: Final notice before levy on Social Security benefits.
  • CP 161: A balance due notice requesting payment or informing you of an unpaid balance.
  • CP 501: A reminder notice that you owe a balance.
  • CP 504: An urgent notice that you owe a balance.
  • CP 523: Notice of intent to levy because you defaulted on your installment agreement.
  • CP 2000: Notice of underreported income.
  • Letter 531: Notice of deficiency.
  • Letter 525: Examination report.
  • Letter 12C: Information request.

These notices are just the tip of the iceberg. Each one requires a specific action and carries implications for your financial well-being.

Why It’s Critical to Respond

Ignoring these notices can lead to more than just annoying reminders—it can lead to garnished wages, seized bank accounts, and a serious financial headache. The key to handling these notices is to respond promptly and appropriately. This might mean paying a balance, filing a past return, or even disputing an error by the IRS.

How to Handle These Notices

  1. Read Carefully: Understand exactly what each notice is saying and what it’s asking of you.
  2. Verify Everything: Check their information against your records. Errors on IRS notices aren’t unheard of.
  3. Take Action: Whether it’s paying a balance, filing a return, or contacting the IRS to clarify a misunderstanding, the most important step is to take action.

Get Help if You Need It

Navigating the maze of IRS communications can feel like decoding a foreign language. If you’re feeling overwhelmed, it might be time to call in a professional. This is where tax experts shine—they can help you respond to notices, negotiate with the IRS, and ensure that your rights are protected.

Ready for More Insights?

If you’re dealing with IRS notices and want more detailed guidance, check out my e-book at CrushIRSAnxiety.com. It’s packed with strategies to help you manage your tax issues effectively and reduce your stress levels. Download it today and turn your tax turmoil into triumph!

Remember, the worst thing you can do when you receive an IRS notice is nothing. Take control of the situation, educate yourself on what the notices mean, and take the necessary steps to resolve them. You’ve got this!

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com

Why You’re in the IRS’s Crosshairs and How to Escape

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Hope you all stayed cool this scorcher of a weekend in San Diego. My family and I ducked into the chill of a movie theater to catch the latest Marvel flick—Deadpool & Wolverine. Epic action, classic heroes, and, yup, a surprise comeback from Wesley Snipes as Blade! Speaking of comebacks, it reminds us of Snipes’ notorious battle with the IRS. He got nailed for not filing tax returns, ringing up a staggering $23.5 million in unpaid taxes. Post-prison, he tried to settle for pennies on the dollar, which the IRS swiftly booted. A tough lesson on how not to deal with tax debt.

Now, why am I bringing this up? Because it’s a perfect springboard into why you might find yourself in the IRS’s crosshairs and how you can smartly navigate out without ending up like Snipes.

You’re Not an Action Hero (At Least, Not to the IRS)

Here’s the deal: if you haven’t filed your taxes in over three years, you’re not just on the IRS’s radar—you’re practically under a microscope. And here’s why:

  1. Non-filing is a red flag. It screams, “Check me out!” to the IRS. And trust me, they will.
  2. The IRS has a long memory and a broad reach. They can and will catch up eventually. When they do, penalties, interest, and the original tax amounts can create a debt mountain that’s tough to scale.

How to Escape the IRS’s Grip

1. Start Filing NOW

First things first: get current. File those overdue returns ASAP. Yes, it’s daunting, especially if you’re looking at a stack of unfiled paperwork. But the longer you wait, the worse it gets. Each day adds up in penalties and interest. Bite the bullet and start digging out.

2. Know Your Settlement Options

Wesley Snipes tried to offer the IRS 4% of what he owed after his stint in prison—not the most persuasive offer. Learn from this: if you owe a ton and can’t pay up, you need to understand what settlement options realistically fit your situation:

  • Offer in Compromise (OIC): This allows you to settle your tax debts for less than the full amount owed if you can prove paying the full amount would create financial hardship. But remember, you need solid evidence to back up your claim.
  • Installment Agreement: This is often more attainable for the average Joe. You agree to pay off your debt monthly based on what you can afford after your living expenses are covered.

3. Consult a Tax Professional

This isn’t a DIY project. Tax laws are complex, and the stakes are high. A seasoned tax professional can provide crucial guidance and represent you in dealings with the IRS. They know the ins and outs of tax negotiation and can often secure terms that an individual taxpayer couldn’t on their own.

Conclusion

Just like in the movies, a dramatic IRS showdown can be thrilling but terrifying. The key difference? In real life, you want to avoid drama. Get ahead of your tax issues by taking action now, understanding your options, and seeking expert help. Don’t wait for the IRS to come knocking. Be proactive, and write your own comeback story—one where you settle your tax debts and walk away free, not one where you end up constrained by them.

Remember, in the battle against tax woes, knowledge is your superpower. Use it wisely, and keep your financial future secure. Anyone can be under the clutches of the IRS, and anybody can bounce back! Ready to start your comeback?

Andrew Samaniego, EA, CTRC, MSCTA

Andrew Samaniego Tax Planning & Resolution

(619) 268-1084  |  AndrewSamaniego.com