The Newport Beach Tax Attorney blog is dedicated to tax issues serving Orange County and Southern California. Posts cover recent news and tax cases including audits, tax litigation, IRS, and cryptocurrency tax issues. For more on the Orange County Tax Attorney Joseph P. Wilson, visit https://www.wilsontaxlaw.com or 949.397.2292
Wilson Tax Law Group - The Newport Beach Tax Attorney Blog: Tax Alert – IRS Change makes it Easier to Levy All...
Wilson Tax Law Group - The Newport Beach Tax Attorney Blog: Tax Alert – IRS Change makes it Easier to Levy All...: There was an important recent change to the format of the IRS’s “final” Notice of Intent to Levy that all tax practitioners and clients sho...
Wilson Tax Law Group - The Newport Beach Tax Attorney Blog: Tax Alert – IRS Change makes it Easier to Levy All...
Wilson Tax Law Group - The Newport Beach Tax Attorney Blog: Tax Alert – IRS Change makes it Easier to Levy All...: There was an important recent change to the format of the IRS’s “final” Notice of Intent to Levy that all tax practitioners and clients sho...
Tax Alert – IRS Change makes it Easier to Levy All Your Assets
There was an important recent change to the format of the IRS’s “final” Notice of Intent to Levy that all tax practitioners and clients should be aware of. Most of us tax geeks are well aware of the difference between a regular IRS collection notice and a “final” Notice of Intent to Levy that includes the right to a collection hearing under IRC 6330. This is something that typically confuses the client, but not the tax practitioner. However, the IRS very recently changed the format of the “final” Notice of Intent to Levy and the new version of the “final” notice looks very much like a regular IRS collection notice. As a result, tax practitioners might, at first glance, be as confused as their clients.
It is unclear why the IRS made this non-publicized change to the “final” Notice of Intent to Levy, but it is definitely more difficult now to tell the difference between the “final” notice and a regular collection notice. As a result, it is recommended that tax practitioners and clients pay extra special attention to their IRS collection notices because the consequences can be dire. Tax practitioners can no longer advise their clients to lookout for the IRS collection notice that says “final” or “right to a hearing” on the front page of the letter because the newer version contains no such language on the front page.
It should be noted that the current revision of the “final” Notice of Intent to Levy appears to only apply for notices issued by the IRS Automated Collection Systems (ACS). ACS has stopped using Letter 1058-C “Final Notice of Intent to Levy,” and instead, is using Notice LT11. I understand that Revenue Officers may still be using Letter 1058. This will make it extra confusing because one division of the IRS will be issuing a “final” Notice of Intent to Levy that looks completely different than the same notice being issued by the other divisions of the IRS. Additionally, it is also unclear whether the IRS will change the format of the “final” Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6330. Previously the “final” notice given for a federal tax lien under 6620 and the “final” notice given for federal tax levy under 6330 used a similar format, making it easier to spot the “final” notice regardless of whether the letter related to a tax lien or tax levy. This is no longer the case.
Obviously this is a rather important change as the “final” Notice of Intent to Levy is the letter that every tax practitioner is on the lookout for in order to freeze IRS collection enforcement by filing a Collection Due Process or Equivalent Hearing. IRS Notice LT11 looks fairly similar to the CP501, CP503, or a CP504 “Notice of Intent to Levy”. The IRS CP notices of course do not trigger collection due process appeal rights and if you fail to respond to these notices it will not generally result in an IRS levy aside from tax refunds and other very limited sources. However, if you fail to respond to LT11 the IRS can levy most assets after the waiting period.
It appears that the LT11 notice has been around for a while. I have never seen this notice in action until just recently when a client forwarded it to me. The IRS didn't send me a copy of the Notice LT11 even though I am listed on the Power of Attorney (POA). Just another reason why I always make my clients forward me copies of any tax notices they receive even though the tax authorities are supposed to send the POA the same notices. Upon receipt of Notice LT11 from my client I pulled her tax account transcripts to check the activity on her account. Interestingly, there was nothing in the account transcript indicating that she was issued Notice LT11 or notified of any collection appeal rights. I went to the IRS website and ran a search of the Notice LT11. The webpage discussing Notice LT11 was recently updated on February 15, 2015. It appears to be a very recent change. Perhaps the IRS is having some hiccups with the initial roll out of this notice, which might explain, but not certainly not justify, why the IRS did not send the POA a copy of the notice or why my client's tax account transcript didn't reflect that the IRS issued the notice.
The bottom line is that ACS is now using Notice LT11 instead of Letter 1058-C. The new Notice LT11 looks very much like a regular IRS collection notice so it can be misleading even to the tax practitioner. The regular notices do not contain collection appeal rights and if you don't respond to the regular notice the IRS cannot levy all of your client's assets. However, Notice LT11 is no regular IRS collection notice. If you fail to file a collection appeal the IRS can levy most assets. So be careful and do not miss the collection appeal deadline thinking the LT11 notice is just a regular IRS collection notice.
Letter 1058 makes clearer on its face that the notice is the “final” collection notice before the IRS will levy most assets and that the taxpayer has a right to file a collection appeal due process appeal. Notice LT11 does not. Unlike Letter 1058, Notice LT11 does not explicitly state on the front page that the taxpayer has “collection appeal rights under 6330” and, unlike Letter 1058, Notice LT11 does not state on the front page that it is the "final" collection notice. You have to read the fine print on the subsequent pages to figure this out. It sort of resembles a notice from a predatory lending company. Thus, Notice LT11 makes it very difficult to initially realize that it is the “final” Notice of Intent to Levy and that collection due process appeal rights follow. Because the IRS is shifting its practices and it is unclear how many people know about this extremely important change, tax practitioners and clients are advised to keep an even closer eye on any collection notices issued by the IRS.
If you need assistance concerning a tax collection matter, do not hesitate to contact a tax lawyer in Orange County. The Orange County Tax Attorneys at Wilson Tax Law Group have experience in federal tax audits, appeals, collections, state and local tax matters, and criminal tax defense. You can reach the Wilson Tax Law Group at 714-463-4430 or 949-397-2292.
If you need assistance concerning a tax collection matter, do not hesitate to contact a tax lawyer in Orange County. The Orange County Tax Attorneys at Wilson Tax Law Group have experience in federal tax audits, appeals, collections, state and local tax matters, and criminal tax defense. You can reach the Wilson Tax Law Group at 714-463-4430 or 949-397-2292.
Location: Orange County, California, USA
Orange County, CA, USA
Tax Alert – IRS Change makes it Easier to Levy All Your Assets
There was an
important recent change to the format of the IRS’s “final” Notice of Intent to
Levy that all tax practitioners and clients should be aware of. Most of us tax geeks are well aware of the
difference between a regular IRS collection notice and a “final” Notice of
Intent to Levy that includes the right to a collection hearing under IRC
6330. This is something that typically
confuses the client, but not the tax practitioner. However, the IRS very
recently changed the format of the “final” Notice of Intent to Levy and the new
version of the “final” notice looks very much like a regular IRS collection
notice. As a result, tax practitioners
might, at first glance, be as confused as their clients.
It is unclear why the
IRS made this non-publicized change to the “final” Notice of Intent to Levy,
but it is definitely more difficult now to tell the difference between the “final”
notice and a regular collection notice. As a result, it is recommended that tax practitioners
and clients pay extra special attention to their IRS collection notices because
the consequences can be dire. Tax
practitioners can no longer advise their clients to lookout for the IRS
collection notice that says “final” or “right to a hearing” on the front page
of the letter because the newer version contains no such language on the front
page.
It should be noted
that the current revision of the “final” Notice of Intent to Levy appears to
only apply for notices issued by the IRS Automated Collection Systems (ACS). ACS
has stopped using Letter 1058-C “Final Notice of Intent to Levy,” and instead,
is using Notice LT11. I understand that
Revenue Officers may still be using Letter 1058. This will make it extra confusing because one
division of the IRS will be issuing a “final” Notice of Intent to Levy that
looks completely different than the same notice being issued by the other
divisions of the IRS. Additionally, it
is also unclear whether the IRS will change the format of the “final” Notice of
Federal Tax Lien Filing and Your Right to a Hearing under IRC 6330. Previously the “final” notice given for a
federal tax lien under 6620 and the “final” notice given for federal tax levy
under 6330 used a similar format, making it easier to spot the “final” notice
regardless of whether the letter related to a tax lien or tax levy. This is no
longer the case.
Obviously this is a
rather important change as the “final” Notice of Intent to Levy is the letter
that every tax practitioner is on the lookout for in order to freeze IRS
collection enforcement by filing a Collection Due Process or Equivalent
Hearing. IRS Notice LT11 looks fairly
similar to the CP501, CP503, or a CP504 “Notice of Intent to Levy”. The IRS CP notices of course do not trigger
collection due process appeal rights and if you fail to respond to these notices
it will not generally result in an IRS levy aside from tax refunds and other
very limited sources. However, if you fail to respond to LT11 the
IRS can levy most assets after the waiting period.
It appears that the
LT11 notice has been around for a while.
I have never seen this notice in action until just recently when a
client forwarded it to me. The IRS
didn't send me a copy of the Notice LT11 even though I am listed on the Power
of Attorney (POA). Just another reason
why I always make my clients forward me copies of any tax notices they receive
even though the tax authorities are supposed to send the POA the same notices. Upon receipt of Notice LT11 from my client I
pulled her tax account transcripts to check the activity on her account.
Interestingly, there was nothing in the account transcript indicating that she
was issued Notice LT11 or notified of any collection appeal rights. I went to the IRS website and ran a search of
the Notice LT11. The webpage discussing
Notice LT11 was recently updated on February 15, 2015. It appears to be a very recent change. Perhaps the IRS is having some hiccups with
the initial roll out of this notice, which might explain, but not certainly not
justify, why the IRS did not send the POA a copy of the notice or why my
client's tax account transcript didn't reflect that the IRS issued the notice.
The bottom line is
that ACS is now using Notice LT11 instead of Letter 1058-C. The new Notice LT11 looks very much like a
regular IRS collection notice so it can be misleading even to the tax
practitioner. The regular notices do not
contain collection appeal rights and if you don't respond to the regular notice
the IRS cannot levy all of your client's assets. However, Notice LT11 is no regular IRS
collection notice. If you fail to file a
collection appeal the IRS can levy most assets.
So be careful and do not miss the collection appeal deadline thinking
the LT11 notice is just a regular IRS collection notice.
Letter 1058 makes clearer
on its face that the notice is the “final” collection notice before the IRS
will levy most assets and that the taxpayer has a right to file a collection
appeal due process appeal. Notice LT11
does not. Unlike Letter 1058, Notice
LT11 does not explicitly state on the front page that the taxpayer has “collection
appeal rights under 6330” and, unlike Letter 1058, Notice LT11 does not state
on the front page that it is the "final" collection notice. You have to read the fine print on the
subsequent pages to figure this out. It sort
of resembles a notice from a predatory lending company. Thus, Notice LT11 makes it very difficult to
initially realize that it is the “final” Notice of Intent to Levy and that collection
due process appeal rights follow. Because the IRS is shifting its practices and
it is unclear how many people know about this extremely important change, tax
practitioners and clients are advised to keep an even closer eye on any
collection notices issued by the IRS.
If you need assistance concerning a tax collection matter, do not hesitate to contact a tax lawyer in Orange County. The Orange County Tax Attorneys at Wilson Tax Law Group have experience in federal tax audits, appeals, collections, state and local tax matters, and criminal tax defense. You can reach the Wilson Tax Law Group at 714-463-4430 or 949-397-2292.
If you need assistance concerning a tax collection matter, do not hesitate to contact a tax lawyer in Orange County. The Orange County Tax Attorneys at Wilson Tax Law Group have experience in federal tax audits, appeals, collections, state and local tax matters, and criminal tax defense. You can reach the Wilson Tax Law Group at 714-463-4430 or 949-397-2292.
Location: Orange County, California, USA
Orange County, CA, USA
Dirty Dozen 2015 Tax Scams
Each year the IRS posts the worst tax scams across America. The IRS works with the Department of Justice and its criminal division to shut down these tax scams, but its a never ending saga and scammers steal billions of dollars each year from the public fisc. Lets take a look at this year's dirty dozen list:
Here is the list the dirty dozen tax scams of 2015:
Here is the list the dirty dozen tax scams of 2015:
- Aggressive and threatening phone calls by criminals impersonating IRS agents remains an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent months as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season
- Fake emails or websites looking to steal personal information (phishing). The IRS will not send you an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS and be wary of clicking on strange emails and websites. They may be scams to steal your personal information.
- Identity theft continues to be a problem especially around tax time. The IRS is making progress on this front but taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim.
- Unscrupulous return preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. Return preparers are a vital part of the U.S. tax system as approximately 60 percent of taxpayers use tax professionals to prepare their returns.
- Offshore tax cheats and the financial organizations that help them should know that it’s a bad bet to hide money and income offshore. Taxpayers are best served by voluntarily disclosing their offshore income and accounts and getting their taxes and filing requirements in order. The Offshore Voluntary Disclosure Program (OVDP) is available to help.
- Stating refund amounts before looking at documents, asking individuals to sign blank returns and fees based on a percentage of the refund are signs of a bad tax preparer. Scam artists use flyers, advertisements, phony store fronts and word of mouth via community groups and churches in seeking victims
- Fake charitable organizations with names that are similar to familiar or nationally known to attract donations from unsuspecting contributors. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities by checking the status of charitable organizations before contributing.
- Hiding income by filing false Form 1099s or other fake documents is a scam not to mention criminal. The mere suggestion of falsifying documents to reduce tax bills or inflate tax refunds is a huge red flag when using a paid tax return preparer. Taxpayers are legally responsible for what is on their returns regardless of who prepares the returns.
- Using abusive tax structures to avoid paying taxes is a bad idea and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered.
- Inventing income to claim tax credits is another sign of a bad scam. Taxpayers are best served by filing the most-accurate return possible because they are legally responsible for what is on their return.
- Erroneously claiming the fuel tax credit is generally limited to off-highway business use, including use in farming. Consequently, the credit is not available to most taxpayers. But yet each year a sizable group of taxpayers erroneously claim the credit to inflate their refunds.
- Using frivolous tax arguments to avoid paying taxes is wrong and most such arguments have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes.The penalty for filing a frivolous tax return is $5,000.
Dirty Dozen 2015 Tax Scams
Each year the IRS posts the worst tax scams across America. The IRS works with the Department of Justice and its criminal division to shut down these tax scams, but its a never ending saga and scammers steal billions of dollars each year from the public fisc. Lets take a look at this year's dirty dozen list:
Here is the list the dirty dozen tax scams of 2015:
Here is the list the dirty dozen tax scams of 2015:
- Aggressive and threatening phone calls by criminals impersonating IRS agents remains an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent months as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season
- Fake emails or websites looking to steal personal information (phishing). The IRS will not send you an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS and be wary of clicking on strange emails and websites. They may be scams to steal your personal information.
- Identity theft continues to be a problem especially around tax time. The IRS is making progress on this front but taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim.
- Unscrupulous return preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. Return preparers are a vital part of the U.S. tax system as approximately 60 percent of taxpayers use tax professionals to prepare their returns.
- Offshore tax cheats and the financial organizations that help them should know that it’s a bad bet to hide money and income offshore. Taxpayers are best served by voluntarily disclosing their offshore income and accounts and getting their taxes and filing requirements in order. The Offshore Voluntary Disclosure Program (OVDP) is available to help.
- Stating refund amounts before looking at documents, asking individuals to sign blank returns and fees based on a percentage of the refund are signs of a bad tax preparer. Scam artists use flyers, advertisements, phony store fronts and word of mouth via community groups and churches in seeking victims
- Fake charitable organizations with names that are similar to familiar or nationally known to attract donations from unsuspecting contributors. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities by checking the status of charitable organizations before contributing.
- Hiding income by filing false Form 1099s or other fake documents is a scam not to mention criminal. The mere suggestion of falsifying documents to reduce tax bills or inflate tax refunds is a huge red flag when using a paid tax return preparer. Taxpayers are legally responsible for what is on their returns regardless of who prepares the returns.
- Using abusive tax structures to avoid paying taxes is a bad idea and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered.
- Inventing income to claim tax credits is another sign of a bad scam. Taxpayers are best served by filing the most-accurate return possible because they are legally responsible for what is on their return.
- Erroneously claiming the fuel tax credit is generally limited to off-highway business use, including use in farming. Consequently, the credit is not available to most taxpayers. But yet each year a sizable group of taxpayers erroneously claim the credit to inflate their refunds.
- Using frivolous tax arguments to avoid paying taxes is wrong and most such arguments have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes.The penalty for filing a frivolous tax return is $5,000.
Wilson Tax Law Group - The Newport Beach Tax Attorney Blog: DOJ Declines to Charge Lerner with Contempt
Wilson Tax Law Group - The Newport Beach Tax Attorney Blog: DOJ Declines to Charge Lerner with Contempt: The Department of Justice (DOJ) has decided that it will not move forward with a criminal-contempt prosecution of Lois Lerner, the former h...
Wilson Tax Law Group - The Newport Beach Tax Attorney Blog: DOJ Declines to Charge Lerner with Contempt
Wilson Tax Law Group - The Newport Beach Tax Attorney Blog: DOJ Declines to Charge Lerner with Contempt: The Department of Justice (DOJ) has decided that it will not move forward with a criminal-contempt prosecution of Lois Lerner, the former h...
DOJ Declines to Charge Lerner with Contempt
The Department of Justice (DOJ) has decided that it will not move forward with a criminal-contempt prosecution of Lois Lerner, the former head of the IRS’s Exempt Organizations Division. As many may recall, Lerner had refused to testify before a House Committee investigating the IRS's handling of Republican organizations applying for tax-exempt status.
In a letter to House Speaker John Boehner, R-Ohio, dated March 31, the DOJ said it was not pursuing the case because Lerner had not waived her Fifth Amendment privilege by making an opening statement and because she made only general claims of innocence.
House Ways and Means Oversight Subcommittee Chairman Peter Roskam, R-Ill., said the decision came as no surprise and that he would continue to "investigate all the facts" and hold her accountable for any criminal wrongdoing to which she was a party. "It has long been clear that this administration has no interest in providing accountability for the innocent Americans who had their civil liberties violated by the IRS," said Roskam in a statement. "Justice’s decision not to prosecute Mrs. Lerner for her refusal to engage with Congress in no way clears her of wrongdoing."
People are divided on both side of the fence. You may recall that during the investigation the IRS destroyed all of Lerner's emails so they could not be provided to the Oversight Subcommittee charged to investigate the matter.
If you have a tax exempt organization or non profit and need legal assistance, do not hesitate to contact the Orange County Tax Law Office of the Wilson Tax Law Group at 949.397.2292.
Location: Orange County, California, USA
Yorba Linda, CA, USA
DOJ Declines to Charge Lerner with Contempt
The Department of Justice (DOJ) has decided that it will not move forward with a criminal-contempt prosecution of Lois Lerner, the former head of the IRS’s Exempt Organizations Division. As many may recall, Lerner had refused to testify before a House Committee investigating the IRS's handling of Republican organizations applying for tax-exempt status.
In a letter to House Speaker John Boehner, R-Ohio, dated March 31, the DOJ said it was not pursuing the case because Lerner had not waived her Fifth Amendment privilege by making an opening statement and because she made only general claims of innocence.
House Ways and Means Oversight Subcommittee Chairman Peter Roskam, R-Ill., said the decision came as no surprise and that he would continue to "investigate all the facts" and hold her accountable for any criminal wrongdoing to which she was a party. "It has long been clear that this administration has no interest in providing accountability for the innocent Americans who had their civil liberties violated by the IRS," said Roskam in a statement. "Justice’s decision not to prosecute Mrs. Lerner for her refusal to engage with Congress in no way clears her of wrongdoing."
People are divided on both side of the fence. You may recall that during the investigation the IRS destroyed all of Lerner's emails so they could not be provided to the Oversight Subcommittee charged to investigate the matter.
If you have a tax exempt organization or non profit and need legal assistance, do not hesitate to contact the Orange County Tax Law Office of the Wilson Tax Law Group at 949.397.2292.
Location: Orange County, California, USA
Yorba Linda, CA, USA
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Recent Federal Court Decision: Texas Top Cop Shop, Inc., et al. v. Garland, et al.
Our clients should be aware of a recent ruling in Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478 (E.D. Tex. ), wh...
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For all those Jersey Shore fans, television personality Michael 'The Situation' Sorrentino and his brother Marc Sorrentino appeared ...
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Just like the IRS, the California Franchise Tax Board (FTB) also has a program to allow one spouse to be relieved of existing joint liabilit...
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Just like the IRS, the California Franchise Tax Board (FTB) also has a program to allow one spouse to be relieved of existing joint liabilit...