• P. Diggs-Costen EA, MBA

Updated: Sep 3, 2019

While writing this article a client contacted me panicked. He was renewing his passport to travel out of the country soon, and the application contained a question regarding unpaid taxes. I informed him the IRS implemented another enforcement tool for seriously delinquent taxpayers by sending certifications regarding unpaid debt to the State Department to revoke or not issue you a passport. I assured him that he did not fit the criteria outlined:

The IRS defines unpaid federal taxes over $52,000 including interest and penalties where:

  1. A tax lien has been issued

  2. A levy has been filed

However, you are not at risk if you are in an approved installment agreement, Offer in Compromise, or other legal remediation. You will also not be affected if you are in bankruptcy, currently not collectible status, pending Offer in Compromise, pending installment agreement, reside in federally declared disaster area, or an identity theft victim.

Further, if you are currently out of the country-the State Department will allow validity for you to return to the United States.

Here is what to expect if you meet the criteria:

  • The IRS will send you a notice before your case is referred to State Department.

  • You will then have the opportunity to contact the IRS and provide a solution.

  • The IRS will reverse certification if you meet certain qualifications.

Costen Tax Group has handled hundreds of IRS collection cases and we can help you resolve your tax situation. Contact us at 770-575-9737 for a free consultation.

Important Tax Returns Due Date September 15, 2019

  • S Corporation Tax Return

  • Partnership Tax Return

  • 3rd Quarter Estimated Tax Payment

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  • P. Diggs-Costen EA, MBA

You are afraid to even deal with the situation. You feel guilty and do not know if you even need to file. The first step is to contact an Enrolled Agent to help you file your delinquent returns. The system is more favorable to voluntary compliance. There is a good chance that you may be due a refund; however, you must request a refund within three years of the due date of the return.

Q. What if I file my tax returns and owe money? Are there options available to me?

A. Yes, there are options available. It is possible that your account can be placed in a non-collectible status if paying would create a financial hardship for you and your family. You can request a penalty reduction if you have reasonable cause for not filing timely. You can request an installment agreement. If you owe less than $50,000 and can pay the full amount within five years, you may be able to set up a streamline payment plan, or you may qualify for an Offer in Compromise and settle your taxes for less than what you owe. All tax returns must be filed before the IRS will consider any of the above options.

Q. What happens if I continue to ignore the IRS notices?

A. Your bank account or wages could be levied. Also, a tax lien can be filed on your assets, and your credit will be negatively affected.

Do not be afraid or embarrassed to ask for help. By law you have a right to professional representation. Only an Enrolled Agent, CPA, or Attorney can represent your case before IRS collections. For more information on IRS Resolution, or filing back tax returns call us at 770-575-9737.

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  • P. Diggs-Costen EA, MBA

Updated: Jun 29, 2019

Mike owns XYZ Plumbing company and filed a joint tax return with his wife Pat. The IRS decides to audit their return and discovered during the audit that Mike has substantially underreported his business income and assessed an additional $20,000 tax to Mike and Pat. Pat, a stay at home mother, is unaware that Bob underreported his income. Eventually Mike and Pat divorce and Mike has not paid the tax debt. 

Is Pat technically liable for taxes? Yes, she is because she signed the tax return. However, the IRS has provided options through the Innocent Spouse Relief, particularly when one spouse is a viable collection option and the ex-spouse will experience economic hardship.

I will briefly explain the relief under understatement of income on a jointly filed tax return. There are four main requirements to request relief:

  1. You filed a joint return.

  2.  You did not know about the understatement of tax.

  3.  Pursuing you for collections would create undue economic hardship.

  4.  You and your former spouse have not engaged in a fraudulent scheme such as transferring property.

Further, there are many other factors the IRS will consider upon receiving your request for Innocent Spouse Relief.

Because of the complexity of this issue, we can advise you of your rights on either side of the case and determine if this is a viable option for you.

Contact us today at 770-575-9737!

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