Tax Attorney or Tax Relief Service for help with Massive Delinquent Tax Bill for 2014-2017

[JohnSchmitz2020]

What is the name of your state?Nevada

My cousin had a bad motorcycle accident over a year ago and is still in the hospital. He worked under the table, received social security, and used savings to dabble in the stock market. He did not file 2014-2017. I filed his 2018 tax returns, paid it, and filed his late 2014-2017 tax returns. I received a bill for a lot of money owed to the IRS.

I need to consult a tax attorney, obviously. OR? should I call one of those tax relief services advertised on the radio and on OTA TV?

 

[FlyingRon]

Stay away from the those who advertise on TV. They are regularly determined to be shams. Two of them have had the principals disbarred (of forced to give up their law licenses to escape further criminals actions).

I don't understand why YOU received any bill. Your cousin should consult a tax professional about his situation (doesn't necessarily need to be an attorney, in fact, those "tax relief"people tend to route you to just plane EA's). Despite how it sounds on TV, what relief is available depends on the rest of the financial situation. It's not the case that the IRS is just going to roll over with an OIC for pennies on the dollar.

 

[JohnSchmitz2020]

What's an EA? OIC?​

Due to head injuries my cousin cannot stay awake very long. He's very incoherent. I have his power-of-attorney to pay bills, etc.

I got the IRS bill on Monday. It's due Jun 12.

We don't have the funds to pay the amount.​

I wonder how many weeks do I have until the IRS freezes his checking accounts, etc?

 

[Zigner]

EA = Enrolled Agent
OIC = Offer in Compromise

 

[FlyingRon]

Find a tax expert who is in business year round and talk to them. Again, we can't give answers without knowing the full scope of your brother's assets and the like. However, the rate at which things occurs isn't as dire as what the scare-mongers on these ads portray. There's also more to the story than you are relating here. We're at the end of what we can do here.

 

[LdiJ]

What's an EA? OIC?

Due to head injuries my cousin cannot stay awake very long. He's very incoherent. I have his power-of-attorney to pay bills, etc.

I got the IRS bill on Monday. It's due Jun 12.

We don't have the funds to pay the amount.

I wonder how many weeks do I have until the IRS freezes his checking accounts, etc?

How much money are we actually talking about? If its less than 50,000 the IRS will cheerfully set up an installment plan. You just have to fill out form 9465 and send it in.

The IRS will not freeze bank accounts or anything else as long as you set up an installment plan. In some cases someone like your brother, if he is permanently disabled, could even get non-collectable status.

So, how much money is actually involved?

 

[Taxing Matters]

So, how much money is actually involved?

That is the place to start; the options and what the IRS is likely to do depends a great deal on how much is owed. It also matters what ability your cousin has to pay what is owed.

He was foolish in failing to file the returns on time. The penalty for filing late is one of the most costly civil penalties there is apart from the fraud penalty. He'd owe a lot less if he had just filed on time.

If your cousin hires a tax attorney, CPA, or enrolled agent to help him with this make sure that person has experience in IRS collection matters. Not all tax professionals do. Some only deal with preparing returns and/or audits of those returns.

Stay away from places that advertise heavily that they practically guarantee that they can settle what is owed for pennies on the dollar. The program the IRS has to settle tax liablities for less than the full amount owed is called the offer-in-compromise (OIC) and it is not easy to get an offer approved. Those places that advertise heavily promoting OICs I call offer mills — they put together offers for everyone knowing full well that most of their offers are not going to be approved in the first place. So they take your money making it sound like you're guaranteed to get it when they know in fact you probably won't get it. That's the scam element here; they take your money while misleading you about the outcome. OICs certainly have their place, but you want to find tax pros that will make proper use of them, not just spit them out for everyone. I'll only submit OICs for a client when I think there is a reasonable chance of getting it accepted because a real effort to get a OIC approved takes some considerable work and the client doesn't want to pay my fee for that unless there is a good possibility for getting it approved.

 

[Dandy Don]

When you say you "filed his 2014-2017 returns", do you mean that you were the person who prepared the returns?

Did your cousin sign these returns?

Does your cousin have a wife and/or children who he supports financially?

 

[JohnSchmitz2020]

How much money are we actually talking about? If its less than 50,000 the IRS will cheerfully set up an installment plan. You just have to fill out form 9465 and send it in.

The IRS will not freeze bank accounts or anything else as long as you set up an installment plan. In some cases someone like your brother, if he is permanently disabled, could even get non-collectable status.

So, how much money is actually involved?

All total from 2014, 2015, 2016, 2017: $75k. $50k tax, $25k penalties.

3/4 of this is from 2015 alone where my cousin played with short term trades on an ETF stock, raking windfall profits, then losing all by the end of 2015, without knowing the IRS washes out short-term repeated losses on similar stocks.

If I can explain the fact that he lost the windfall 100% totally maybe I can get some mercy for him from the IRS?

 

[JohnSchmitz2020]

When you say you "filed his 2014-2017 returns", do you mean that you were the person who prepared the returns?

Did your cousin sign these returns?

Does your cousin have a wife and/or children who he supports financially?

I have power-of-attorney. I filed his 2014-2018 returns. He has no spouse, no dependents.

 

[JohnSchmitz2020]

That is the place to start; the options and what the IRS is likely to do depends a great deal on how much is owed. It also matters what ability your cousin has to pay what is owed.

He was foolish in failing to file the returns on time. The penalty for filing late is one of the most costly civil penalties there is apart from the fraud penalty. He'd owe a lot less if he had just filed on time.

If your cousin hires a tax attorney, CPA, or enrolled agent to help him with this make sure that person has experience in IRS collection matters. Not all tax professionals do. Some only deal with preparing returns and/or audits of those returns.

Stay away from places that advertise heavily that they practically guarantee that they can settle what is owed for pennies on the dollar. The program the IRS has to settle tax liablities for less than the full amount owed is called the offer-in-compromise (OIC) and it is not easy to get an offer approved. Those places that advertise heavily promoting OICs I call offer mills — they put together offers for everyone knowing full well that most of their offers are not going to be approved in the first place. So they take your money making it sound like you're guaranteed to get it when they know in fact you probably won't get it. That's the scam element here; they take your money while misleading you about the outcome. OICs certainly have their place, but you want to find tax pros that will make proper use of them, not just spit them out for everyone. I'll only submit OICs for a client when I think there is a reasonable chance of getting it accepted because a real effort to get a OIC approved takes some considerable work and the client doesn't want to pay my fee for that unless there is a good possibility for getting it approved.

Oh. I'll have to carefully shop for the right representative. Is there a professional organization/website that has a list of representative? I live in Nevada.

 

[Taxing Matters]

I have power-of-attorney.

In order to represent someone before the IRS, you need to use Form 2848. When you read the Form 2848 instructions for that form, you will learn that the persons eligible to represent taxpayers are limited, and when it comes to family members cousins are not authorized to do that. The relative must be "a spouse, parent, child, brother, sister, grandparent, grandchild, step-parent, step-child, step-brother, or step-sister)." So unfortunately here you are not going to be able to represent your cousin with the IRS on this.

 

[davew9128]

What is the name of your state?Nevada

My cousin had a bad motorcycle accident over a year ago and is still in the hospital. He worked under the table, received social security, and used savings to dabble in the stock market. He did not file 2014-2017. I filed his 2018 tax returns, paid it, and filed his late 2014-2017 tax returns. I received a bill for a lot of money owed to the IRS.

I need to consult a tax attorney, obviously. OR? should I call one of those tax relief services advertised on the radio and on OTA TV?

Why do YOU need to consult anybody? Edit: I now see the POA.

 

[LdiJ]

Oh. I'll have to carefully shop for the right representative. Is there a professional organization/website that has a list of representative? I live in Nevada.

You are going to want someone who has experience dealing with problems with the IRS as well as someone who can review the returns you filed to ensure accuracy. With that much money involved, you want to make sure that everything was done correctly.

 

[JohnSchmitz2020]

You are going to want someone who has experience dealing with problems with the IRS as well as someone who can review the returns you filed to ensure accuracy. With that much money involved, you want to make sure that everything was done correctly.

How do I find credible help? I googled for 'Enrolled Agents" and there are many claims. Is there a website that rates these places?