Business, Free News Articles, Taxes and Accounting

The IRS Collection is Now Back and Sending Final Intent to Levy Notices – Ace Plus Tax Resolution Suggests Tax Relief Strategies

LOS ANGELES, Calif. -- James Cha, a CPA and a Certified Tax Resolution Specialist from Ace Plus Tax Resolution, underlines that the IRS is starting its collection actions by sending Final Intent to Levy notices, and urges taxpayers to act with tax relief strategies.

The IRS collection enforcement is now back! The IRS switched its lenient position during COVID-19 and has now started sending millions of Final Notices of Intent to Levy (Letter 11 or LT11) from June 15, 2021. Its Automated Levy and Systematic Lien Programs were halted since April 2020 due to COVID, but these programs have now returned. It's time to take action to protect your bank accounts, wages, and other assets and income from the IRS!

A levy occurs when the IRS collects the back taxes by seizing delinquent taxpayers' real or personal properties. Typically, levies are made on financial accounts held for them by others, such as a bank, a stockbroker, or an employer. Levies can be placed on bank accounts, social security benefits, and retirement income.

If anyone wishes to appeal this proposed levy action, Form 12153, "Request for a Collection Due Process or Equivalent Hearing," has to be sent to the IRS within 30 days from the receipt of LT11.

About 45 days after Letter 11 is issued, a levy will take place if the taxpayer has not contacted the IRS for resolution. The IRS computer sends levy notices to any financial institution suspected of holding funds under its Social Security numbers or names, or to any employers or contractors who have filed a W-2 or 1099 form showing they have paid them in the past. In addition to any properties, a levy can attach to any future federal tax refunds or state income tax refunds that they are to receive, in order to satisfy the federal tax liability.

James Cha, CPA, CTRS, says that "It is critical for the taxpayers to understand where they are in the collection process. Any delinquent taxpayers are highly recommended (or strongly urged) to start working out a deal with the IRS as soon as possible."

Upon receiving Letter 11, here are some critical points to consider:

* Get any missing returns filed as soon as possible to be in compliance.

* Respond to the notices or letters, and seek professional tax help for the best possible resolution options.

* Respond to IRS requests in a timely fashion.

Additionally, James states "It is also worth noting that I expect that the IRS will continue to hire many more new employees to ramp up its enforcement actions". In 2021, the IRS has already announced plans to hire 87,000 new employees, doubling their workforce over the next six years. The current administration has pledged $80 billion toward enforcement activities over the next ten years.

Tax Reliefs

In the case where the taxpayer is approached by the IRS for back taxes, the best possible course of action might be to adopt an approach to deal with the issue tactfully without panicking.

James believes "the best course of action is to see if they qualify for any tax relief options." However, this can only be done after delinquent tax returns have been filed and all current income tax or payroll tax deposits have been paid.

Businesses or individuals can settle their taxes substantially less than they owe through an Offer in Compromise if they qualify. Financial inability to pay is the most common reason an Offer is accepted, but it must be supported by and verified with well-prepared financial documents and statements.

Or, through an Installment Agreement, businesses or individuals may set up an affordable payment plan to pay off the back taxes. If they qualify for a Partial Payment Installment, they will not be paying off the full amount, as the balance left at the end of the payment term will be forgiven. Strategizing is crucial when submitting an application in order to maximize the benefit.

Also, they may be able to halt IRS collection actions by declaring a Currently Not Collectible status. To qualify for this status, they must prove they have a dire financial situation and none to very little income. The IRS will put a pause on their attempt to collect payment until the financial situation improves.

Lastly, business owners who have fallen behind on their Payroll Tax Obligations need to figure out the best method to protect themselves and deal with the IRS.

The Final Words

There are numerous tax relief options that are put forth by the government, but individuals and business owners should seek an experienced tax relief specialist who can strategize, take full advantage, and save considerable sums of money for taxpayers.

Ace Plus Tax Resolution provides permanent solutions to taxpayers with IRS and state tax problems. James Cha is a CPA and Certified Tax Resolution Specialist(r) at Ace Plus Tax Resolution, has been representing his clients and dealing with the IRS for over 30 years. His practice is in Los Angeles, but his clients are all across the nation.

Contact him at (213) 600-7388 or for a free consultation.

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Business, Free News Articles, Taxes and Accounting

Certified Tax Resolution Specialist, James Cha from Ace Plus Tax Resolution, Advises Non-Filers to File Their Back Tax Returns Now

LOS ANGELES, Calif. -- James Cha, a Certified Tax Resolution Specialist from Ace Plus Tax Resolution, urges taxpayers to file their tax returns as soon as possible, even if they missed the tax deadline or can't pay off, as they're only increasing their tax bill by delaying.

The IRS has started again to send the collection notices to taxpayers from late October. These notices were paused due to COVID-19. Now, the IRS's mail backlog is caught up enough to enforce non-payments, and they will start levy, lien, and other threatening collection activities.

The IRS has slowed down in many aspects due to COVID-19, but they never stopped investigating people who haven't filed tax returns. Pursuing non-filers can be one of the IRS's most efficient enforcement strategies because issuing non-filer notices can be a cost-effective tool that requires little more than automated notices.

There is an ever-increased chance that the IRS will start ramping up their collection activities right after the presidential election is over.

Consequences of Non-Filing

Why are there so many non-filers? Quite many people misunderstand and think, "If I don't file, then the IRS won't know. Then the IRS cannot pursue, lien, or levy me." Or, "I didn't get any notices the following year. I must've gotten away."

"However, this isn't true," says Ace Plus Tax Resolution's Certified Tax Resolution Specialist(R), James Cha. "Taxpayers are only increasing their tax bills by not filing and waiting. The IRS will investigate and catch up with non-compliant cases in the following years. Once the IRS system discovers those cases, it will send out warning letters and threaten non-filers. Failure to file a tax return may be construed as a criminal act by the IRS and can be punishable by up to one year in jail for each year not filed. If left unresolved, the non-filers find themselves in a tough spot when the IRS freezes their bank accounts, garnishes their wages, seizes or sells their assets, suspends their passports, takes their retirement funds, takes their home, and so much more."

Why Should Non-Filers File Tax Returns As Soon As Possible?

If a taxpayer hasn't filed tax returns in the past several years, it is strongly recommended that they file their returns as soon as possible, even if they can't pay them off at the moment.

If taxpayers fail to file or pay the returns, the IRS will keep adding penalties at an extremely high rate and also charge them interest. The IRS charges 5% of the amount due every month for failure to file, and 0.5% for failure to pay for a maximum of 25% each. Because of 0.5% reduction in penalty for any month, the maximum penalty amount combined is 47.5% of the taxes owed.

Compliance is Required before Resolution

Ace Plus Tax Resolution can bring you back to compliance by filing back tax returns, which will stop the failure-to-file penalty. What's important is that the taxpayer needs to be "current" with any filing obligations to be eligible for any back tax liability settlement with the IRS.

To be Current, You Must:

1. File tax returns for the most recent six years, and

2. Make current tax payments.
a. sufficient withholding (W-2 employee)
b. estimated tax payments (self-employed)
c. quarterly payroll tax deposits (business)

Ace Plus Tax Resolution's solutions include:

If qualified, Offer in Compromise allows a negotiation to settle back tax liability for a substantially reduced amount from the full amount owed. Keep in mind that the IRS can reject the offer if the financial documents are not professionally prepared or the taxpayer is not in compliance with the IRS. For applicants who have not filed all of their tax returns or made all required estimated tax payments or deposits, their offers will be rejected.

The Installment Agreement is for those who are unable to make the full tax payment immediately. There is a limit to how much they can owe to qualify for the agreement for online application. Thus, non-filers should consult with a tax relief professional for detailed information.

Another method is to see if they qualify for a Currently Not Collectible status upon submitting a financial statement. If the taxpayers have no means to pay the debt at the moment or anytime soon, they can request the IRS to delay the collection process until their financial situation improves. Note that this doesn't mean the back tax liability will disappear - the IRS can come back and collect your taxes years later. Other solutions include lien relief, release of wage or bank levies, penalty abatement, Bankruptcy Dischargeability Analysis, etc., depending on the non-filer's situation.

James adds on and says, "the IRS is making deals right now for back tax liability due to COVID-19. So, now is the best time to negotiate with the IRS."

Bottom Line

Without these alternative solutions, the amount the taxpayer owes to the IRS can become so massive that they cannot pay off the amount. It's like this huge snowball rolling downhill, getting bigger and bigger with growing penalties and interest. In fact, millions of taxpayers in America are delinquent in filing tax returns and are struggling to pay the IRS.

If you're struggling with tax problems, it is strongly recommended that you seek help from tax relief experts who can guide you through the most suitable resolution method and reduce the liability owed to the IRS to the lowest amount possible if you qualify. This can resolve your non-filing problems effectively and permanently.

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Watch why you should file back tax returns here and how a tax professional can help you:

James Cha is a CPA and Certified Tax Resolution Specialist(R) at Ace Plus Tax Resolution, providing permanent solutions to taxpayers with IRS and state tax problems. He has been representing his clients and dealing with the IRS for over 30 years. His practice is in Los Angeles, but his clients are across the nation. Call us at (213) 600-7388 or email at

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