Evaluating Your Tax Debt Relief Options

When it comes to resolving your tax debt, you have a number of possible routes you could take. In this article, I’ll go into some of the pros and cons of each option so that you have the information you need to make the best decision for yourself.

Do It Yourself Tax Resolution

Probably the route most people take, doing it yourself seems like the obvious or only choice for most people and small businesses. Simple tax debt problems that only cover a year or two, especially cases where the tax debt is under $10,000 (or under $50,000 if it’s only income taxes) are fairly easy to resolve with only a few phone calls (one phone call, in some cases).

If you can follow written instructions, are good with forms and paperwork, and have your personal financial paperwork in good order, then representing yourself is neither difficult nor time consuming. You need to be able to read and understand IRS notices and publications and forms, and keep good financial records for yourself.

Here’s a quick test: If you file your own tax return every year and have no problem doing so, then you can probably represent yourself. If you struggle with doing your tax return, even if you use step-by-step software, then you might want to consider getting help with the situation. If you have tax debts other than personal income tax liabilities, you should also hire a licensed tax professional to represent you.

Hire a Licensed Tax Professional

If your tax situation is complex, consists of multiple different types of taxes over multiple tax periods, involves any sort of business taxes, or exceeds $50,000 in income tax debt, you should seriously consider hiring professional representation.

I want to stress the word licensed. In my article about 5 Reasons To Use Professional Representation To Resolve Your IRS Tax Debt I gave some warnings about some companies that only do tax resolution work. You want to make sure that the person doing the actual work is licensed. Some of the less reputable companies in this industry have assistants do all the work, and a licensed person is just there to sign the Power of Attorney (POA). Some of these POA signers have literally thousands of POA’s that they are signed onto at any one time. Don’t for a second think that they even know who you are. Always ask to speak to an actual licensed … Continue reading

Update on Individual (1040) Lien Leads

For those of you that specialize in assisting individual taxpayers instead of businesses, you may have noticed some recent upsets in the leads world. Due to increasing regulation and pressure from the Federal Trade Commission, it’s getting harder and harder to access individual taxpayers through the telephone. One of the largest list brokers in the country recently quit offering tax liens at all due to these issues.

Here at Tax Liens HQ, we are still offering 1040 tax lien leads, but we recently made the decision to no longer offer phone numbers on those leads, and I’d like to explain why that is and what your options are instead.

If you are calling individual consumers at all, the FTC requires that you have what is called a SAN number. This is a subscription number to the national Do Not Call list registry. Even if you purchase phone numbers from a list broker, you are still required to have your own SAN number and remove numbers from your list that are on the Do Not Call List, even if the list broker says they do it for you.

Subscribing to the Do Not Call list is not inconsequential. A SAN number that covers the entire United States costs around $15,000. However, this is nothing compared to the FTC fines for telemarketing to consumers without a SAN number. The fines can be as high as $11,000 PER PHONE CALL.

So what does this have to do with us no longer offering phone numbers? The FTC has recently begun to hold list brokers accountable for the actions of their customers. There is pending civil litigation around this issue, since depending on who you ask, the law doesn’t allow for this, but the FTC is doing it anyway. Since we are a fairly small “mom and pop” business, we simply cannot afford the liability exposure if the FTC were to make an issue with us providing phone numbers to our customers and our customers failed to obtain SAN numbers and comply with the Do Not Call List rules and the Telemarketing Sales Rule. So, long story short, our attorney told us to stop.

So where does this leave you for obtaining phone numbers? Check out various phone append services that exist online, and pick one that meets your needs.

Alternatively, have you considered direct mail? For the cost of a SAN number for the entire United States, you could … Continue reading

Unfiled Tax Returns

Do you have past due tax returns? If so, you’re not alone. While the IRS does not publish statistics on this, nor are they really able to track this number, but my own research and statistical analysis (because I’m a numbers geek and do stuff like that), estimates that there are between 5 and 8 million outstanding personal income tax returns in the United States for the past three years alone.

If you owe a tax debt to the government and are seeking to get that situation resolved, you will first need to file any missing returns. The IRS will NOT negotiate a payment plan or a reduced settlement if you have past due tax returns. The reason for this is pretty simple: If you don’t file the returns, they don’t know how much you really owe.

While any tax preparer, CPA, or Enrolled Agent can probably assist you with filing your past due tax returns, it is important to note that many of these tax preparers focus their practices solely on current year tax return filings. Since the tax laws change literally every year, it’s a daunting task just to keep up with the tax code for the current year, so many tax preparers don’t bother trying to keep up with prior year tax matters.

A firm that specializes in taxpayer representation, on the other hand, often does exactly the opposite. Many of these firms don’t even offer current year tax return preparation. Since the tax code as applicable to prior years is fixed and no longer changes, they can maintain their skills and knowledge on prior years quite readily since they focus almost exclusively on preparing older tax returns. This lack of change in the past tax code and their experience preparing these returns also lets them complete them fairly quickly, since they don’t have to spend time researching the old laws, and therefore you don’t have to pay for that research time, keeping their fees reasonable for this sort of service.

Search our directory of taxpayer representation firms to find a tax professional in your area that specializes in preparing back tax returns.… Continue reading