Tax requirements can be complicated, and even conscientious people can accidentally fall behind on their taxes. This oversight often results from a significant life disruption such as a job loss, divorce, illness, or death. In other cases, people feel overwhelmed by the filing process or simply do not have the money to pay their taxes. It is also possible for employers to neglect to withhold the proper amount of taxes from a worker’s paychecks throughout the year, causing them to owe additional money during tax season.
Regardless of the reason, tax collecting agencies take these obligations seriously. Failure to pay tax liabilities is considered tax evasion and can be punished with wage garnishment, seizure of property and assets, fines, and jail time.
If you are behind on your taxes and facing collections actions, you need a Bowling Green tax collection attorney on your side to help you minimize the potential penalties and get back on your feet. Learn about your options for resolving back taxes below, then contact Mockensturm, Ltd to find the best solution for your tax issues.
We can help you stop collections actions and provide solutions to all of your tax issues.
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A tax lawyer is a legal and financial professional who specializes in tax liabilities related to income, business transactions, acquisition of property, and estate transfers. Tax attorneys may practice at accounting firms or work with law firms to provide comprehensive tax services to individuals, corporate or business entities, and non-profit organizations. This includes explaining tax requirements to clients so they can remain compliant with the law, advising them on how to manage their finances to obtain the most favorable tax situation, and litigating disputes with the IRS or other tax authorities.
Some tax lawyers serve as consultants in specific areas, such as estate planning or personal wealth management, while others focus on helping clients develop the best strategies for starting, purchasing, selling, or expanding a business.
Tax laws and codes are notoriously complex and change often, making it extremely difficult for most people to understand without a professional financial background. Tax attorneys offer litigation skills, years of experience, and extensive knowledge of federal, state, and local tax law, as well as familiarity with various tax authorities. They can clarify the issue you are facing so you know what to expect from your case, identify which programs you may qualify for based on your specific tax situation, and help you select the best tax relief option for you.
At Mockensturm, Ltd, we can handle any tax problems you may be facing, including:
When you work with our expert lawyers, we begin by performing a case analysis. Our team can review your tax transcripts and all relevant information about your financial situation, compile our findings into a report, and determine the right course of action for your case. This allows us to halt any current penalties, return you back into full compliance, and prevent you from incurring any future actions from the taxation authorities.
In some situations, just filing the outstanding tax returns can alleviate your problems. It is also possible that you simply made an error with a prior filing, or the taxation authorities may have filed on your behalf, causing you to incur a higher liability than you should owe. Amending your return can change the due balance or even allow you to collect a refund.
The Department of Taxation (DOT) is responsible for collecting and administering Ohio tax code, while the Attorney General’s (AG’s) office handles tax collections enforcement actions. Taxpayers who owe back taxes to the State of Ohio have three main options for resolving delinquent tax liability:
Also known as a payment plan, an installment agreement is an arrangement you can make with the state to provide monthly payments toward your outstanding balance until you fulfil your past-due tax liability. Only the Attorney General’s (AG) office has the authority to set up payment plans, meaning you cannot pursue this option until the Department of Taxation “certifies” your tax liability to the AG’s office for collection purposes.
Past-due taxes become certified after the expiration of the original assessment performed by the DOT, usually 60 days. The AG’s office will then issue a notice to you and assign your case to a private collection firm, or “special counsel,” which will assess any additional collection fees along with the penalties and interest you have already accrued.
The AG’s office accepts requests for installment agreements lasting up to one year. You must agree to make monthly payments that pay off the entire past-due tax amount, plus all penalties, interest, and collection fees, over the course of 12 months. There is not a specific form for such an agreement, so you or your attorney is responsible for negotiating with the private collection firm overseeing your file.
After you reach an agreement, the firm will create a written installment agreement. Make sure that this agreement includes a hold or stay on enforced collections to protect you from later collections actions. If you cannot afford to pay your total tax liability in 12 months, you may qualify for other forms of tax relief.
An Offer in Compromise refers to a program where you can offer to settle your delinquent tax liability for less than the original amount owed. The settlement covers the penalties, interest, and collection fees that have accrued in addition to the delinquent tax. To qualify for this program, you must meet one of the following conditions:
Additional requirements include:
The burden of proof rests on you to prove the basis for your relief request. If you believe that the AG’s office should consider a specific issue, such as a medical condition that reduces your earning capacity, you must submit documentary evidence that supports your claim, such as medical records.
After you submit your application to the AG’s office and any supporting documentation, they perform a preliminary review to confirm that you meet the eligibility requirements listed above. An applicant who submits an incomplete application or fails to meet these requirements will have their application rejected without an official review.
If your application passes the preliminary review, the AG’s office performs an official review and recommend acceptance, rejection, or a counteroffer. Then, they send the application and their recommendation to the DOT for another review. This agency issues acceptance, rejection, or a counteroffer. You should receive this notice within three to six months of filing your application. You cannot appeal a denial, but you may refile the application if your circumstances significantly change.
When determining how to respond to your application, the AG’s office and the DOT considers several factors, including:
The state can assess two types of tax penalties – failure to file and failure to pay. A failure to file penalty is calculated as either $50 for every month the return is late or 5% of the owed amount per month, whichever is greater, up to $500 or 50% of the total owed tax. A failure to pay penalty may not exceed two times the amount of the federal government’s current short-term interest rate. The State of Ohio permits the Department of Taxation to reduce these tax penalties under certain circumstances.
A request for penalty abatement is a written request in which you ask the state to waive some of all penalties assessed against you. You must first pay the original tax due before the DOT will consider your request for penalty abatement. After you pay this tax, you can submit your request to the AG’s office, along with supporting documentation. The AG’s office sends this request to the DOT, and this agency can determine whether to abate some, all, or none of the penalty.
Generally, the DOT will approve your request if your failure to comply with the tax code provisions resulted from reasonable cause and not willful neglect. This would include your incapacitation, natural disasters, the death of a family member, or other circumstances beyond your control.
To find a tax attorney for your case, begin by asking your friends, family members, and colleagues if they have hired a tax attorney in the past. Ask them about their experience and the results the attorney was able to obtain for them. If you have worked with an accountant, banker, or another lawyer concerning a different legal matter, you can also ask them for recommendations.
Use this list as a starting point to conduct online research. Evaluate each attorney’s website to get an idea of the services they offer, and make sure to check out their rankings on the leading attorney review sites, including Avvo, Martindale-Hubbell, Lawyers.com, and FindLaw. Attorneys must have a Juris Doctor degree and law license to practice law in Ohio, and any person who prepares tax returns for clients in exchange for compensation must also have a preparer tax identification number (PTIN) from the IRS. Some tax lawyers also have a master’s degree in taxation (LL.M) or a certified public accountant (CPA) license.
After you have compiled a list of six or so candidates, call their offices to schedule consultations. They should be willing to discuss your case, answer any questions you may have, and give you an idea of how you may be able to respond to the collection enforcement actions you face. You should feel comfortable sharing your financial information, be confident in their abilities, and feel assured that they will prioritize your best interests.
If the IRS, the Attorney General’s office, or another governmental agency is pursuing enforcement actions against you over back taxes, Mockensturm, Ltd is here to help you effectively resolve your tax issues. Our team of Bowling Green tax collection attorneys provides comprehensive, dedicated legal representation for clients facing tax problems with federal, state, and local tax authorities. We can work with you to explore your options for tax relief, find the solution you need to get back on track, and help you minimize the potential consequences of your tax liability. Contact us today to schedule a consultation with our expert attorneys.
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