1. Can you help me prepare my tax returns?
Ray Ladouceur is a licensed certified public accountant in Louisiana. His CPA firm can prepare individual, business, trust and estate tax returns. Please call Linda Savage at 985-898-2131, ext. 1000 for more information or to schedule an appointment.
2. I owe the IRS money. What are my options?
The IRS is one of the few creditors that can sieze your assets without getting a judge’s approval beforehand.
If you owe the IRS money and can’t pay it all, you may ask for an installment payment plan. Your request will generally be granted if you owe less than $50,000 and propose to pay out the balance owed within 60 months. All past due returns must be filed. The agreement will terminate if you skip payments. Generally, if approved, the IRS will not issue a federal tax lien against you, so your credit report will stay clean.
The IRS’ website, www.irs.gov, contains an interactive calculator to help you compute the minimum payment acceptable to the IRS. Your request must be sent in on Form 9465 Request for Installment Agreement, which may be obtained from their website.
You may also submit an Offer in Compromise. First, you must complete form 433-A, which sets forth information about your assets, liabilities, income, and expenses. This form is submitted along with form 656 Offer in Compromise to the IRS. The forms are obtained the same way as explained above.
Your offer must agree to pay in a lump sum or in installments at least the net equity value of your assets plus your expected net income over the next four years (two years in certain circumstances). In calculating your net income, IRS disallows expenses deemed unreasonable.
For example, assume taxpayer A and B both owe the IRS $50,000 in back taxes. Taxpayer A owns nothing because of a bankruptcy and is expected to net only $7,500 per year after allowable living expenses. Taxpayer A should submit an offer in compromise for $30,000. Taxpayer B has $40,000 of equity in his house and is expected to net $15,000 per year after expenses. Taxpayer B doesn’t qualify for an offer in compromise because his equity and projected income exceed what he owes. He should enter into an installment agreement with the IRS.
3. Do you handle matters in U.S. Tax Court?
Yes. Most tax controversies are settled in the appeals process within the IRS. Sometimes, however, it is necessary to litigate an issue in the U.S. Tax Court or federal district court. For a representative case in which we successfully represented an estate in the U.S. Tax Court, please see Burris v Comm’r, T.C. Memo 2001-210 (2001), appeal withdrawn (Aug. 2002).
We hope that this information will be useful to you. We will be happy to answer specific questions in a personal and confidential meeting. Please call our offices to schedule an appointment with Ray Ladouceur, 985-898-2131, ext. 1006.