Immediately Release, Remove IRS Wage Garnishment

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IRS Levies 1.9 million taxpayers each and every year!!!

IRS only sends out tax levies after a series of 5 letters are sent to the taxpayer. These are sent about 5 weeks apart.

1. CP 14  –  This is the notice of balance due,

2.CP 501 – This is a Bill that you still owe tax,

3. CP503 – Important, Immediate Action Required

4. CP 504 Urgent Notice – We Intend to Levy  on Certain Assets, Please Respond Now

5. CP90/CP297/ IRS Letter 1058 – Final Notice of Intent to Levy &Notice of Your Right to a Hearing

6.CP 91 CP298  -Final Notice Before Levy on your Social Security Benefits

 

If this has happened to you we have a quick and affordable process to get you an immediate IRS wage garnishment release.

As Former IRS agents and managers, we know the fastest and most affordable way to get your IRS Wage Garnishment Stopped and released.

The IRS collection process allows for the IRS to levy wages for uncollected back taxes. These IRS  Wage garnishments will not go away until you take the proper steps to take care of this situation.

Your employer must comply with the federal rules for the IRS Wage Levy or your employer will have sanctions imposed on them by Internal Revenue Service.

It is possible within days to get this Federal Wage Levy or garnishment removed and released and your case closed.

 

We have over 206 years of professional tax experience and over 60 years of working directly for the Internal Revenue Service in the local, district, and regional tax offices of the Internal Revenue Service. While at the Internal Revenue Service we taught tax law.

We know the exact process and fastest protocols possible to stop an IRS wage garnishment.

 

Here is how simple the process is to get a Wage Garnishment Release by us:

 

  • Immediately contact your payroll department and let them know you have hired a professional company to take care of this IRS problem;
  • Make sure all your back IRS tax returns have been filed with the IRS, (we can help with this);
  • AZ Tax Agents will contact the IRS with a power of attorney so you NEVER have to speak with the IRS on these back tax issues;
  • Provide information necessary to prepare an IRS Form 433a or 433f – Collection Information Statement, with supporting documentation (we will help with this);
  • We package the documentation, send it to the IRS, and immediately request that they release the wage levy or wage garnishment and close your case;

 

Don’t hesitate, each day you wait the IRS is taking more money from you and your family. Call AZ Tax Agents today and we will work for you to STOP the IRS Wage Garnishment Levy.

The Process to immediately Stop an IRS Wage Garnishment

 

Before the Internal Revenue Service will stop an IRS wage garnishment they will want a current financial statement.

That financial statement will be on form 433-F. You can find that form on our website.

You will need to provide the Internal Revenue Service not only this financial statement you will also need to show IRS a current pay stub and last 3 to 6 months of bank statements. The IRS will determine the collectibility of your case based on your current financial statement and financial needs.

To immediately stop the IRS wage garnishment this information needs to be faxed or sent to the Internal Revenue Service as soon as possible. As soon as the IRS agent can review your case and your current financial statement, they can make a determination on how they will settle your case. As a general rule once the IRS agent has your current financial statement they will release and stop your IRS wage garnishment that very day.

Also, you should be aware that the Internal Revenue Service will make sure that all prior years tax returns are filed and appear on the IRS computer system.

We can usually get an IRS wage garnishment release to stop your IRS levy garnishment within 24 hours of receiving your financial information.

IRS Rules concerning Wage Garnishments

 

An individual’s wages, salary, and other income can be levied.

IRS Wages, salary, and other income include payment for personal services in a working relationship.

Can you be fired?  If an Employer Threatens to Fire Taxpayer Because of a Levy:

 

Sometimes an employer threatens to fire an employee to avoid handling a levy.

This might be a violation of 15 USC 1674.

If the employer fires the taxpayer because of this, the employer might be fined not more than $1000 or imprisoned for not more than one year, or both.

You should refer the taxpayer to the Wage and Hour Division of the Department of Labor (DOL). DOL, not IRS, must decide if the employer violated the law.

 

Did you know the IRS Wage Garnishment has a Continuous Effect of Levy on Salary and Wages?

 

Unlike other IRS tax levies, a levy on a taxpayer’s wages and salary has a continuous effect. It attached to future payments until the levy is released.

Wages and salary include fees, bonuses, commissions, and similar items. All other levies only attach to property and rights to property that exist when the levy is served.

 

Examples:

If a bank account is levied, it only reaches money in the account when the levy is served. It does not reach money deposited later.

When other income is levied, the levy reaches payment the taxpayer has a fixed and determinable right to. If the taxpayer’s right to that payment is not dependent upon the performance of future services, then the levy will reach the future payments as well.

 

Retirement Income.

A Form 668-A is issued to levy an author’s royalties. The author has a fixed and determinable right to royalties for books that have already been published. The levy reaches royalties for sales of those books in the future.

The levy does not reach royalties for books that are written and published later. A new levy must be served to take those royalties.

 

Another Example:

A Form 668-W is issued to levy a taxpayer’s retirement income. The taxpayer has a fixed right to the future payments; therefore, the levy remains in effect until it is released.

 

Exempt Amounts from the IRS Wage Garnishment

Part of the individual taxpayer’s wages, salary, (including fees, bonuses, commissions and similar items) and other income, as well as retirement and benefit income, is exempt from levy.

The weekly exempt amount is:

The total of the taxpayer’s standard deduction and the amount deductible for exemptions on an income tax return for the year the levy is served.

 

  •    Then, this total is divided by 52.

 

Income that is not paid weekly is prorated, so the same amount is exempt.
In addition, the amount the taxpayer needs to pay court ordered child support is exempt.
Please take Note:

The support order can originate from a court or administrative process under the laws and procedures of a state, territory or possession.

If support is allowed, the same child cannot be claimed as an exemption for figuring the exempt amount. See IRM 5.11.5.4 (2) a above.

IRS will not remove any Wage Levy until all tax returns are filed.

If you do not have your records we can secure all your information from the IRS to prepare all back years. AZ Tax Agents can make this happen within days.

 

IRS allows you some money during the garnishment phase.

Even though IRS has sent a wage garnishment or Wage Levy to your employer, there are certain allowances that the IRS will give to you.

A chart will be sent to your employer that they use to determine how much you are allowed to keep from your paycheck. The amount allowed is for your basic food monies only. A single taxpayer with one exemption was allowed $179.81 per week in 2009, IRS will take the rest.

 

Why did the IRS place a Wage Levy on me?

The IRS has sent a Wage Levy or wage garnishment out because the taxpayer did not respond to correspondence from the IRS. The IRS always makes several attempts to contact a taxpayer that owes tax, they have to by law.

Some taxpayers may not receive this information because they have moved or did not actually receive the mailing sent out by IRS. It makes no difference. Once an IRS Notice of Levy is sent they will not be removed until contact has been made with the Internal Revenue Service. We can handle the IRS for you.

We will:

  • Get a transcript of your complete tax history;
  • File a power of attorney with the IRS so you never have to speak with the IRS;
  • Secure a remove or release of the Federal Tax Levy;
  • Close your case and settle your back tax problem.

Immediately Release, Remove IRS Bank Levy

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IRS Levies 1.9 million taxpayers each and every year!!!

IRS only sends out tax levies after a series of 5 letters are sent to the taxpayer.

These are sent about 5 weeks apart.

1. CP 14  –  This is the notice of balance due,

2.CP 501 – This is a Bill that you still owe tax,

3. CP503 – Important, Immediate Action Required

4. CP 504 Urgent Notice – We Intend to Levy  on Certain Assets, Please Respond Now

5. CP90/CP297/ IRS Letter 1058 – Final Notice of Intent to Levy &Notice of Your Right to a Hearing

6.CP 91 CP298  -Final Notice Before Levy on your Social Security Benefits

 

*A Note about IRS Letter 1058

The IRS uses Letter 1058 as a Notice of Intent to Levy to inform you they intend to take your property and assets. It is very similar in effect as other Notices CP 90 & CP 504.  The IRS can seize practically anything you own after 30 days.

 

Hire true tax professionals who can get the job done.

Being former IRS Agents and Managers we know the process of getting a levy on a bank account released and removed quickly and for affordable fees.

 

We will not only get your Levy on your bank account released we will also settle your case.

 

You should also be aware that your money is not being sent to the Internal Revenue Service for 21 days. The money is frozen not permanently gone.

When you have received a levy on your bank account the money is actually frozen or held for 21 days. The Internal Revenue Service is giving you that three-week period to get a release of levy on your bank account.

You can continue to use your bank account during that 21 days.

So if you just received a Levy on a Bank Account do not be panicked or to worried, we can and get a release of the levy on your bank account within 24 hours of receiving your current financial statement along with documentation.

Call us at AZ Tax Agents and we will get started on removing your tax levy on your bank account immediately.

We have over 206 years of professional tax experience and over 60 years of working directly for the Internal Revenue Service in the local, district, and regional tax offices of the IRS.

We know the exact protocols to get an IRS bank levy released and removed as fast as possible for affordable pricing.

 

The Process of getting a Levy on a Bank Account released or removed.

 

Before the Internal Revenue Service will remove or release a Levy on a bank account they will need to review a current financial statement. That financial statement will need to be on form 433-F.

Once we have received your current financial statement along with all documentation to support it, we can usually get your levy on your bank account released or removed within 24 hours.

It is also important for you to understand that the Internal Revenue Service will make sure all your federal tax returns have been filed and up-to-date.

So whether you want to get your levy on your bank account release to remove by yourself or have a professional tax form engaged to do the work you should immediately start working on that financial statement to give to the IRS agent

 

THIS IRS NOTICE OF FEDERAL TAX LEVY ON YOUR BANK ACCOUNT WILL NOT GO AWAY BY ITSELF.

You have a 21-day window before the bank has to send the frozen monies to the IRS. During this period of time, we can secure enough information to get the IRS Bank Levy removed and put your money back in your hands.

 

This is your next step for immediate bank tax levy removal:

 

  • Contact AZ Tax Agents, we have tax professionals, including former IRS agents to help you through the process;
  • Make sure all your Federal Tax Returns are filed and up to date, IRS will not release these levies until all returns are filed, (we can help with this);
  • AZ Tax Agents will contact the IRS with a power of attorney so you NEVER have to speak with the IRS on these back tax issues;
  • Provide information necessary to prepare an IRS Form 433F – Financial Statement, with supporting documentation (we will help with this);
  • We package the documentation, fax it to the IRS, and immediately request that they release the bank levy and close your case;

 

Don’t hesitate, each day you wait the IRS is closer to taking your money away from you and your family.

Call AZ Tax Agents today and we will work for you to remove the IRS Bank Levy.

Facts that you should know about an IRS Bank Levy

 

A Notice of Intent to Levy was sent to your last known address, the one that IRS had on file. By law the IRS is required to do this.

You had 30 days to respond to this notice. Many times taxpayers never received these IRS notices on back taxes.

As a result, IRS sent a Levy Notice out to a bank source the IRS has in their file. The IRS collection computer sends out all these notices.

Once the Federal Tax Levy hits your bank account, you have 21 days in which to take care of the problem. The bank puts a hold or a freeze on your account.

The IRS will expect you to contact them within that 21 day period. The only reason the IRS levy was sent was because there is an unresolved IRS issue that needs to be resolved.

IRS is going to want a current financial statement before they will release the Federal Tax Levy on your bank account. They will request a 433A or a 433F Information Collection Statement. The form must be filled out entirely and you will have to provide supporting documentation for some of the expenses.

Another important factor is to make sure all your tax returns are up to date.

IRS will not release the bank levy until all tax returns are filed. If you do not have your records, AZ Tax Agents can obtain the information to complete all necessary returns that the IRS is looking for within a couple of days.

We get full transcripts and income verification from the IRS to prepare your unfiled tax returns.

The IRS Bank Levy

 

Holding Period for a IRS Bank Levy

By Federal Law, a bank must wait 21 calendar days after a levy is served before sending payment. Then, on the next business day, it must turn over the taxpayer’s money.

The depositor(s) can waive this waiting period. The bank will not send money that is subject to attachment or execution under judicial process. “Bank” includes credit unions, savings and loan associations, trust companies, and others described in IRC 408(n) and Treas. Reg. §301.6332–3(b).

During the holding period, a levy might be released, or the amount owed could decrease.

If the bank receives no release, it must send the payment after the holding period.

No additional notice is required.

 

The Role of the Bank Liaison for the IRS Bank Levy

money is sent.

Assign a bank liaison in each territory to settle these issues quickly.
Sometimes ownership is not settled before the holding period ends. If this happens, ask the bank for more time.

 

Problems can exist for Multiple Signature Authority for a Bank Account for Levy purposes

 

A levy served to a bank attaches to funds in a bank account for which the taxpayer has an unrestricted right to withdraw funds (signature authority) – even if multiple persons have signature authority for that bank account.

As noted in Treasury Regulation 301.6332–1(c)(4) the unrestricted right to withdraw funds is an interest which is subject to levy.

An example.

A bank is served with a notice of levy for an unpaid tax liability due from the taxpayer in the amount of $2,000. The bank holds $2,000 in a checking account in the names of a taxpayer and a third party.

Although all of the deposits into the account were made by the third party, the taxpayer has an unrestricted right to withdraw the funds from the account. The bank may send the Service the entire account balance at the end of the 21-day holding period.

The bank is not liable to the third party for any amount, even if the third party proves that the funds in the account did not belong to the taxpayer, because the taxpayer’s un-restricted right to withdraw the funds is an interest which is subject to levy.

The third party may, however, seek the return of the funds from the United States by making an administrative wrongful levy claim under IRC 6343(b) or file a suit under IRC 7426(a)(1) should the administrative claim be denied.

A non-liable third party may claim ownership of funds in a bank account when multiple people hold signature authority for that bank account. Treat this dispute as a potential wrongful levy.

A wrongful levy is a levy that improperly attaches property belonging to a third party in which the taxpayer has no rights.

For bank levies, if additional time is needed beyond the 21 day hold period to determine ownership, request the bank hold the funds.

Provide the potentially wrongfully levied party a deadline date for providing substantiation and provide the bank with a specific extension date to forward the funds.

 

Amount that Must be Surrendered on the IRS Bank Levy

 

The bank must send the amount in the taxpayer’s accounts. A bank levy attaches to any property or rights to property that belongs to the taxpayer or on which there is a Federal tax lien unless it is exempt. See IRC 6331, Levy and Distraint, for legal authority to levy. However, it must send no more than the amount shown on the notice of levy.

By law, banks cannot immediately honor the IRS levy. See IRM 5.11.4.1, Holding Period, for guidance on the holding period after a bank levy.

The notice of levy only reaches the amount on deposit when the levy is received. Money deposited latter is not surrendered, including deposits during the holding period. Another levy must be served to reach this money

Also, the levy only reaches deposits that have cleared and are available for the taxpayer to withdraw.

Levy proceeds must not be reduced by any fee charged by the bank for processing the levy.

We will

  • Get a transcript of your complete tax history;
  • File a power of attorney with IRS so you never have to speak with IRS;
  • Secure a removal or release of the Federal Tax Levy;
  • Close your case and settle your back tax problem.

Bank Account Frozen

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Being former IRS Agents, Managers and Instructors we have issued thousands of IRS Wage Garnishments and Bank Tax Levies as former IRS employees. We know exactly how to quickly get the tax levy released and get your case settled with the IRS.

The Process:

1. We immediately send a power of attorney to the Internal Revenue Service letting them know we are now your tax representative so you will never have to speak to them.

2. I will make sure all your tax returns are filed correctly. If your tax returns are not current, the IRS can refuse to work your case and will not issue a release of a tax levy or not release frozen bank funds.

3. The IRS requires a current documented financial statement. I will secure a required 433-A or a 433-F (IRS financial statement), and verify the income and expenses and work out a settlement agreement. The IRS will require a closing settlement method for each case. This can be done within hours of getting a case.

4. I review with our clients how they want to settle their case. We get them an agreement based on their current financial needs and conditions.

5. The common settlement options are usually Hardships, Payments Agreements, or the filing of Offers in Compromise.

Get results today from frozen bank accounts. Get your tax levy released and your case settled.

Call me for a no-cost professional tax consult and speak directly to a certified tax professional.

All our work is guaranteed.

IRS Tax Audit Reconsideration

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We know the system. You can reduce your IRS Tax Debt and Settle.

If you the taxes is a result of the IRS letter reconsideration we will settle your tax debt at the same time.

We can get your IRS Tax Audit reopened and more than likely greatly reduce your tax liability.

Many times the Internal Revenue Service audits your tax return and you do not even know the tax audit took place.

Other times you simply disagree with the tax audit and you need the IRS to reopen the case again.

We can get your IRS Tax Audit re-opened by requesting a IRS Tax Audit Reconsideration

The Internal Revenue Service will re-open tax audits to:

  • Ensuring the amount of assessed tax is correct.
  • Ensuring the collection process is suspended while the reconsideration request is being considered.
  • Ensuring that the procedures support the abatement of assessments in appropriate situations.

What is the Definition of an Audit Reconsideration

An IRS Tax Audit Reconsideration is the process the IRS uses to reevaluate the results of a prior audit where additional tax was assessed and remains unpaid, or a tax credit was reversed.

If the taxpayer disagrees with the original determination he/she must provide information that was not previously considered during the original examination.

It is also the process the IRS uses when the taxpayer contests a Substitute for Return (SFR) determination by filing an original delinquent return.

Reasons to request an IRS Tax Audit Reconsideration:

 Some reasons for an audit reconsideration request:

  • The taxpayer did not appear for the audit,
  • The taxpayer moved and did not receive the correspondence from the IRS,
  • A taxpayer might request an audit reconsideration also if you disagree with an audit assessment from an initial tax audit of his/her return.

If the IRS prepared your Tax Return under 6020B:

The taxpayer can disagree with a tax assessment created under the authority of IRC Section 6020(b), Substitute for Return (SFR) you can also request a tax audit reconsideration.

You can also qualify if you have been denied tax credits such as EITC claimed, during prior examination.

 Criteria for Reconsideration

In order to request an IRS Tax audit reconsideration:

  • The taxpayer must have filed a tax return.
  • The assessment remains unpaid or the Service has reversed tax credits that the taxpayer is disputing.
  • The taxpayer must identify which adjustments he/she is disputing.
  • The Taxpayer must provide additional information not considered during the original examination.

Information the Taxpayer should provide

  • All information received from the Taxpayer pertinent to the issue
  • Information not considered during the original audit.
  • Copies of letters and reports received by the taxpayer, if the case is NOT on RGS.
  • Copies of documents already submitted by the taxpayer.
  • Amended return, if applicable.

Tax Authority for the IRS to accept a Reconsideration

The Internal Revenue Service has the discretionary authority to abate an assessment of any tax if it is excess of the taxpayer’s liability per IRC Section 6404(a) (301.6404-1) .

Acceptance of Request

A request for reconsideration will be considered if:

  • The taxpayer requests the abatement of an assessment based on information that was not previously considered which, if considered, would have resulted in a change to the assessment.
  • An original delinquent return is filed by the taxpayer after an assessment was made as a result of a return executed by the IRS under IRC Section 6020(b) or other substitute for return procedures.
  • There was an IRS computational or processing error in assessing the tax.

Non-Acceptance of Request

A request for reconsideration will not be considered if:

The taxpayer has already been afforded an audit reconsideration request and did not provide any additional information with his/her current request that would change the audit results.

Other pertinent information

  • The assessment was made as a result of a compromise under IRC Section 7122. These agreements are final and conclusive.
  • The assessment was made as the result of final TEFRA administrative proceedings.
  • The assessment was made as a result of the taxpayer entering into an agreement on Form 870-AD, “Offer of Waiver of Restrictions on Assessment and Collection of Deficiency in Tax” .
  • The United States Tax Court has entered a decision that has become final, or a District Court or the United States Court of Federal Claims has rendered a judgment on the merits that has become final.

Noteworthy Facts:

Any request for reconsideration on cases that were settled by Tax Court, District Court, or Court of Federal Claims should be forwarded to the Office of the Associate Area Counsel for forwarding to the docket attorney.

When the Tax Court dismisses a case for lack of jurisdiction, it does not enter a decision and the case is not dismissed on the merits.

See IRC Section 7459(d). Likewise, when a District Court or the United States Court of Federal Claims dismisses a case for lack of jurisdiction, the case has not been dismissed on the merits.

IRS Tax Audit Defense

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Let Former IRS Agents be your best tax defense.

You go to your mailbox and there it is.

Everyone fears the dreaded letter from the IRS. You open it up and it is some of the worst news possible, ” you have been selected for a tax audit for years……….

There are ways you can protect yourself from a IRS Tax Audit. As Former IRS Agents, Managers and Instructors we have discovered ways for the average taxpayer to keep themselves from a IRS tax audit.

How to Protect Yourself From An IRS Audit

1. Have your tax return prepared by a reliable tax return preparer. If your preparer promises large refunds without asking to see the proper records for deductions and credits, you know that you will be audited after the return has been filed.

When your tax return preparer deduct items that should have not been deducted, you’re the one who will be audited and you will be required to pay the additional tax, interest and penalties.

If the IRS believes that your tax return preparer is incompetent or deducts large non-existent deductions, all of the returns prepared by that return preparer will more likely be selected for audit.

You do not want a tax return preparer who promises you the largest refund, but a tax return preparer who will compute the correct tax. It is recommended that you hire a tax return preparer who knows the tax law and who deducts items on the tax return that you can properly document.

Don’t forget you are ultimately responsible for the additional tax, interest and penalties.

2. File all your required tax returns by the due date. If you haven’t filed your tax returns, the IRS will eventually audit on you.

By not filing your tax returns timely, the IRS will assess the failure to file penalty at 5% per month up to 25% of the tax. If the IRS determines that your failure to file was attributable to fraud, the penalty will be 15% per month up to 75% of the tax.

Thus, you are always better off filing the tax return by the due date, even if you don’t have the funds to pay the tax because you will not be assessed the failure to file penalties.

3. Report all of your income shown on the Form 1099’s that you have received. Even if you don’t receive a 1099, you still have to report all of your income. If you file your tax return without reporting all of your income, you are risking an audit. If the IRS audits your tax return and finds omitted income, you will be assessed tax on the omitted income plus interest on the tax computed from the due date of the tax return to the date that the tax is paid.

Then, the IRS will apply the 20% accuracy related penalty or the 75% fraud penalty on the additional tax plus the interest on the penalties computed from the due date of the tax return to the date that it is paid.

4. Don’t deduct an office in a home. To qualify for an office in a home deduction, you must use the office for work and it must be your primary place of business. Most taxpayer’s abuse this deduction.

Unless, your office in the home is your primary place of business, don’t take this deduction. Further, let’s say that you properly documented that you used 15% of your residence for business, when you sell the residence, the IRS will correctly argue that 15% of the gain from the sale is taxable income. This will create unintentional tax liability on your part. Unless you have a compelling reason to take this deduction, stay away from it.

5. Don’t deduct a large Sch C loss, unless you truly have a loss. A large Sch C loss means that your business deductions exceeded your income from the activity.

The IRS will be questioning you on the source of the funds to pay for those excess deductions. You will need to document sources of the non-taxable income to pay for that loss. If you sold assets to fund the loss, you will need to document those sales.

The possible sources of the non-table income would include loans, gifts and inheritances. These sources will have to be documented to the IRS, if requested by them.

The documentation would include copies of checks, closing papers, gift tax returns of the person who made the gifts and estate tax returns for inherited funds.

6. Don’t deduct a loss from a business activity that the IRS can classify as a hobby loss, unless you have the documentation for that loss.

If you deduct a loss from a horse racing, dog racing, car racing, a boat chartering activity or any other activity that is fun; the IRS will ask you to prove that the activity is engaged for profit.

Thus, you should have a separate bank account for these activities and a business plan on how you expect to make a profit from the activity. You will need to show valid business projections.

7. When you deduct donations of property to a charitable organization, you need to have the required documentation that will always include a valid appraisal. Only deduct what you actually donated to the charitable organizations and can verify with copies of canceled checks.

8. When you deduct a casualty loss, you need the proper documentation for the deduction. The documentation will always include an appraisal of the property before and after the casualty.

The amount reimbursed by insurance for the casualty. You will also need to prove your adjusted basis in the property before the casualty.

If you have a theft loss, make sure that you report the theft to the police and obtain a police report for the incident.

9. You should always be prepared for an audit by having in your possession all of the documents needed to verify the items shown on your tax return even before it is ever audited.

You do not want to search for the verification after your tax return has been selected for audit by the IRS.

10. If you are selected for a tax audit, call us to ensure the best possible results.

Protect yourself from a IRS tax audit. Have us prepare your next tax return.

IRS Tax Audit Help

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We are one of the nations most experienced IRS Tax audit help firms.

It only makes sense to have Former IRS Agents and IRS Tax Audit Managers handle your IRS tax audit and give you the most experienced and successful IRS Tax Audit Help.

Facts about IRS Tax Audits:

  • The IRS audits a total of 1,391,581 tax returns a year.
  • The IRS field agents complete more than 310,000 audits by office or business visits a year.
  • The IRS completes over 1,081,152 correspondence audits a year.
  • IRS has installed new software tracking systems with the development of the CADE 2 computer to spot and recognize tax audits more proficiently
  • IRS collected over $10 billion dollars a year from IRS tax audits.
  • IRS employs over 13,000 IRS auditors.
  • $5.2billion dollars are collected through the IRS document matching program.
  • For truly professional IRS Tax Audit help contact former IRS Agents and Managers.

IRS Policy Statement P-4-21. It states “The primary objective in selecting returns for examination is to promote the highest degree of voluntary compliance on the part of taxpayers.”

The IRS Tax Audit Examination Plan

The plan that is used by the IRS is based on long range coverage planning, and objectives on the resources requested in the Congressional Budget. From this, there is an established plan where staff years are allocated to all area IRS offices using resource allocation and a prescribed methodology. Each Area Manager of the IRS is responsible for preparing an area response following instructions from the National Headquarters.

Staffing for the IRS Tax Audit

Staffing is based on the examination priorities that differs from office to office and region to region, front loaded programs set up before hand, historic examination rates adjusted to yield sure ended results and audits that match experience of the personnel. Each region is excepted to produce tax audits and money from tax audits. IRS is funded thru results.

Why the IRS Audits Tax Returns

a. Front Loaded Programs

Front Loaded programs are those tax audits that IRS DC headquarters has determined are very important and a considerable amount of time must be spent on these programs and activities. Each area has discussions within management as to what the programs should be for each region, district, and office.

Some of the programs are:

  • Special enforcement programs – An example of this may be compliance of all flee market vendors, a program I was involved with
  • High Income non-filers – The IRS would get their information from a match program of w-2’s and 1099’s and match up social security numbers against filed returns
  • Abusive Tax Avoidance – This could be in the area of offshore activities
  • Offshore credit card program
  • National Research programs – Those set forth by management after doing a trends project
  • FBAR filing  – IRS is currently targeting those with overseas bank accounts
  • Non- filers  –  IRS is presently forming a task force to seek non-filers though aggressive means.

b. The IRS makes sure there is balanced coverage.

The National Office makes sure there is a balanced approach for audit return delivery and tax compliance. Resources and inventory and the size of personnel all go into this formula. The focus is blended into these areas:

  1. Individual returns less than $100,000.
  2. Individual returns greater than $100,000 but less than $200,000.
  3. Individual returns greater than $ 200,000.
  4. Small Business Corporations.
  5. Small Business Flow-Through Entities – S Corporations, Fiduciaries and Partnerships.

c. Classification Plan

The IRS will prepare a plan, which is classified. A National DIF score indicator is placed on all Federal Income tax returns that are filed. Each tax return has certain factors that contribute to its score such as Gross Income, Adjusted Gross Income and line item expense.

There are several classified secrets that go into the DIF score.

Each tax return is processed through the IRS computer line item by line item.

A DIF score label is placed on every tax return with its DIF number. A tax examiner or Revenue Agent manually eyeballs each and every tax return with a high DIF score. The examiner then determine which return has the highest probability of tax audit success.

d. DIF Cutoff Score

The IRS will calculate the Area DIF cutoff score for each activity code, giving consideration to the selection rate. This is the lowest DIF score necessary to secure the number of returns required for audit. For example, if the return plan shows 225 returns for an activity code and the selection rate is 70%,  the IRS will need to order 321 returns (225/70%).

The DIF Cut off Score is 500. The number of returns with DIF scores greater than 550 is 280, which is less than the number of returns required, so the lowest DIF score on an ordered return will be in the range of 500 to 550 and the DIF cutoff score is 500. This is the IRS example as found in the IRS IRM section 4.

e. Where your case is worked

Examination inventory is assigned to IRS offices based on ZIP codes, using the Look up Tables at Martinsburg Computing Center.

f. High Assault Risk Areas

Certain ZIP code areas are identified as High Assault Risk Areas. There are special instructions the IRS has regarding these audits. These returns will be audited.

Survey of Examination Cases. The IRS can look over your case and close it with an eyeball look.

  1. While cases should be selected and started in accordance with all guidelines, in a limited number of circumstances, there may be returns that appear in the “judgment of the examiner and manager” to warrant survey without taxpayer contact. That is to not even contact the taxpayer.
  2. Cases delivered to the IRS area manager will generally fall into one of three categories: mandatory work, strategic (priority program) work, and non-strategic work.
    1. Mandatory work includes nationally-coordinated research projects such as NRP and employee audits (excludes “new” IRS employee audits)
    2. Strategic work is identified annually in the Exam Program Letter which can be found at http://sbse.web.irs.gov/Exam/. The procedures to survey strategic work and referrals from other business units, “new” employee audits and cases with previous taxpayer contact require an explanation for the rationale for the survey.
    3. Cases that are not mandatory work, strategic work, a referral from another business unit, and are not part of an employee examination or research study may be surveyed based upon the professional judgment of the examiner with concurrence of the immediate supervisor.
  3. Here are some factors to consider when determining whether to survey strategic work:
    1. Taxpayer is in bankruptcy
    2. Taxpayer has suffered an extreme hardship or illness
    3. Taxpayer is deceased, or
    4. Examiner has additional information that was not available during classification
    5. This is in the complete judgment of the IRS tax auditor

From year to year, the IRS changes their programs to keep everyone honest. However, after years of experience, a trained eye can know what tax returns will be pulled for audit.

Why use former IRS agents for IRS tax audit help

Being former IRS agents we know all the protocols, all the theories, all the settlement formulas and all the tax procedures the IRS will use for a IRS tax audit.

While most tax professionals learn their IRS Audit skill during on-the-job training, former IRS agents and managers actually know the insider programs and insider secrets to successful tax audits.

The team of tax professionals we have at Former IRS AGENT Michael D. Sullivan not only were former IRS agents and managers but were former instructors with the Internal Revenue Service not only taught a local office but also taught in the district and regional IRS offices as well.

We are one of the most experienced tax firms when it comes to IRS tax audit help.

If you need to hire a professional tax firm, it is wise to hire a certified public accountant, former IRS agents and managers who can provide you the very best IRS tax audit help. There are many excellent tax firms to help you through this problem, make sure you check on their experience and their Better Business Bureau rating.

Commonly Ask Questions

Q. Does the IRS ever contact a taxpayer or the tax preparer via e-mail to initiate an audit?
A. The IRS does not contact an individual via e-mail for an initial appointment. Contact related to being selected for an audit will be made via telephone or mail only, due to disclosure requirements.

Q. Does filing an amended return affect the return selection process?
A. Filing an amended return does not affect the selection process of the original return. However, amended returns also go through a screening process and the amended return may be selected for audit.

Q. Why was my return selected for audit?
A. When returns are filed, they are compared against “norms” for similar returns. The “norms” are developed from audits of a statistically valid random sample of returns. These returns are selected as part of the National Research Program which the IRS conducts to update return selection information.

The return is next reviewed by an experienced auditor.  At this point, the return may be accepted as filed, or if based on the auditor’s experience questionable items are noted, the agent will identify the items noted and the return is forwarded for assignment to an examining group.

Upon assignment to a group, the return is reviewed by the manager.

Items considered in assigning a case are:  factors particular to the area such as issues pertaining to construction, farming, timber industry, etc. that have specific factors and rules that apply.  Based on the review, the manager can accept the return or assign the return to an auditor.

The assigned auditor again reviews the return for questionable items and either accepts it as filed or contacts the taxpayer to schedule an appointment.

Q. Where will the audit be held?
A. It depends on the type of audit being conducted.

Audits by Mail/Correspondence Audit.

Some audits are conducted entirely by mail. If the audit is conducted by mail, you will receive a letter from the IRS asking for additional information about certain items shown on the tax return such as income, expenses, and itemized deductions.

In-Person Audits are audits conducted either at a local IRS office or at your business location.

Q. Can you request the audit be conducted at the IRS office instead of at your place of business?
A. If the audit has been scheduled to be conducted at your location, it will generally be conducted where the books and records are located.  Requests to transfer the audit to another location, including an IRS office, will be considered but may not be granted. Treasury Regulation 301.7605-1(e), Time and place of audit, discusses the items considered when a request for a change in location is made.

Q. Can the audit be transferred to another IRS office?
A. You can request a transfer of an audit if you have moved.  Several factors will be considered such as your current location, the location of the business and where the books and records are maintained.

If the audit is by correspondence, you can request a face-to-face audit because the books and records may be too voluminous to mail.

Q. How long should the records related to a business or other long-term asset be kept?
A. In the case of an asset, records related to the asset should generally be kept for as long as you have the asset plus three years.  If the asset was exchanged, the basis for the new asset may include the exchanged asset so the records for both assets will need to be retained until the new asset is disposed plus three years from the file date of the tax return for the year of disposition.

 

Q. How long should payroll records be kept?
A. In general, payroll records should be kept for six years with a review of the file to see if any items relating to current employees should be retained with current records.

 

Q. After an auditor completes the audit, will the case be reviewed to ensure the audit results are correct?
A. All cases may be reviewed by the auditor’s manager either during the audit or upon completion. If errors are noted by the manager, the auditor will contact you to advise you about the proposed correction and what impact this may have on the amount of tax due.

 

Q. How far back can the IRS go to audit my return?
A. Generally, the IRS can include returns filed within the last three years in an audit.  Additional years can be added if a substantial error is identified.  Generally, if a substantial error is identified, the IRS will not go back more than the last six years.

The IRS tries to audit tax returns as soon as possible after they are filed.  Accordingly most audits will be of returns filed within the last two years.

If an audit is for an older year, you may be requested to extend the statute of limitations for assessment of your tax return.  The statute of limitations limits the time allowed to assess additional tax.

The statute of limitations is generally three years after a return is due or was filed, whichever is later.  There is also a statute of limitations for making refunds.

If the audit is not resolved and the statute of limitations date is nearing, you may be asked to extend the statute of limitations date.  This will allow you additional time to provide further documentation to support your position, request an appeal if you do not agree with the audit results, or to claim a tax refund or credit. It also allows the IRS time to complete the audit and provides time to process the audit results.

You do not have to agree to extend the statute of limitations date.  However, if you do not agree, the examiner will be forced to make a determination based upon the information they currently have.  Therefore, the examiner may not be able to consider additional adjustments, such as expenses, that could lower the amount of tax due.