Your Crown Point, Indiana Tax Attorneys

Tax law is very complex.  If you, or your business, is facing an IRS examination, you need representation. Joseph B. Cioe, Jr. an Attorney and Certified Public Accountant has extensive experience representing Crown Point taxpayers. Don’t simply settle for an unfairly large tax increase. Get a free consultation today!

At Cioe & Wagenblast, P.C., we  have helped many clients significantly reduce the amount of back taxes they owe whether through offer in compromise, appeal, penalty abatement, partial pay installment arrangement, or not collectible status. 

Back Taxes 

Back taxes refers to delinquent taxes which are overdue. Your record is researched to determine where you stand with the IRS, what you owe, the years are unfiled, the years are necessary to file and to acquire documentation to do those returns. Back taxes come in different ways, such as:

• If a taxpayer fails to file returns for a number of years, the IRS will file returns for the taxpayer and thereby assess a tax.
• If a taxpayer is audited and the IRS determines more tax is due, a “back tax” is then  assessed against the taxpayer.
• When a taxpayer files returns but is unable to pay the tax due, then a back tax is assessed against the taxpayer.

Will I Owe Penalties On Back Taxes?

In most cases, penalties accrue when a taxpayer fails to file and pays taxes on time. The IRS will sometimes threaten the possibility of penalties if the taxpayer can meet a legal standard known as reasonable case. A reasonable case means that the taxpayer was a victim of crime, substance abuse, mental disease or natural disaster. The taxpayer must have some sort of documentation to prove the event.

Can I Reduce The Amount of Back Taxes That I Owe?

Yes – Back taxes can be reduced by a variety of actions or inactions, such as;

• Back taxes can be reduced if the IRS agrees to accept an offer in compromise from the taxpayer. In this example, the IRS recognizes that the settlement of an offer in compromise with the taxpayer is more valuable than trying to collect the unpaid back taxes over a long period of time.
• Back taxes can be reduced or possibly eliminated by filing for a Chapter 7 bankruptcy. Special rules apply to the discharge of taxes through the bankruptcy court so a capable tax attorney or bankruptcy attorney must be consulted.
• Back taxes expire under operation of law after 10 years from the date that they came due. IRS tax debts disappear after 10 years if the IRS has not been able to collect them. There are rare cases where back taxes may last longer than 10 years. If this has occurred, please consult with a professional tax attorney.

Usually, the IRS does not prosecute a person for back taxes. The IRS & Justice Department seek to prosecute individuals for back taxes when the amounts are very large and the taxpayer has committed fraud to the government. If you have concerns regarding your conduct, be sure to consult with an experienced tax attorney.

Payroll Taxes

Businesses need to be aware of payroll taxes. Collecting Form 941 payroll taxes are among the Internal Revenue Service’s top priorities. The government is clear on its commitment to collecting all taxes withheld from employees’ paychecks. It will fully enforce collection actions to find and collect all unpaid payroll taxes. Also called “Withholding taxes” are the taxes deducted from an employee’s paycheck. According to federal and state tax law, they must be immediately paid over to the IRS and/or state Departments of Revenue.

The taxes withheld from paychecks are called the “trust fund” taxes because the employer holds them “IN TRUST” for the employee.

Collecting paycheck tax withholdings that were never paid over to the government is among the top of the IRS’s list. The IRS will determine whether an owner, accountant, manager, officer, or anyone within the business had the “personal responsibility” for failing to pay those taxes.

NOTE: The IRS will assess a penalty to that person who it determines to be responsible. The penalty can be substantial. It equals the amount of taxes withheld from employees’ paychecks, but that the business never paid over to the federal or state governments.

What is a trust fund recovery penalty (TFRP)?

To encourage prompt payment of withheld income and employment taxes, including social security taxes, railroad retirement taxes, or collected excise taxes, Congress passed a law that provides for the TFRP. These taxes are called trust fund taxes because you actually hold the employee's money in trust until you make a federal tax deposit in that amount. The TFRP may apply to you if these unpaid trust fund taxes cannot be immediately collected from the business. The business does not have to have stopped operating in order for the TFRP to be assessed.

The TFRP may be assessed against any person who:

• Is responsible for collecting or paying withheld income and employment taxes, or for paying collected excise taxes, and
• Willfully fails to collect or pay them.

A responsible person is a person or group of people who has the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes. This person may be:

• An officer or an employee of a corporation,
• A member or employee of a partnership,
• A corporate director or shareholder,
• A member of a board of trustees of a nonprofit organization,
• Another person with authority and control over funds to direct their disbursement,
• Another corporation or third party payer,
• Payroll Service Providers (PSP) or responsible parties within a PSP
• Professional Employer Organizations (PEO) or responsible parties within a PEO, or
• Responsible parties within the common law employer (client of PSP/PEO).

For willfulness to exist, the responsible person:

• Must have been, or should have been, aware of the outstanding taxes and
• Either intentionally disregarded the law or was plainly indifferent to its requirements (no evil intent or bad motive is required).

Contact Cioe & Wagenblast, P.C. if you need professional tax law representation in Crown Point with your payroll taxes. We can analyze your circumstances and discuss potential avenues of resolution. Contact us today!

I Cannot Afford to Pay My IRS Tax Debt

There are some processes to resolve an unpaid IRS debt. The most common is to enter into an installment arrangement with the IRS by communicating with the IRS Collection Division. 

A second method to resolve unpaid taxes is to submit an “Offer in Compromise”. To succeed with an IRS Offer in Compromise, which will substantially reduce the tax you owe, you need to prove to the IRS you cannot afford to pay the tax due. This process requires the provision of extensively long documentation to the IRS and requires many months of processing & negotiating.  

Bankruptcy protection is a third way to resolve unpaid taxes. Tax debt can be overwhelming, and many taxpayers struggling to pay their taxes may wonder if bankruptcy is a viable option to resolve their IRS debt. Bankruptcy can provide relief for certain types of debts, but the relationship between bankruptcy and tax debt is complex. Filing for bankruptcy can provide relief from certain types of tax debt, but it’s essential to understand the rules and limitations. While Chapter 7 and Chapter 13 bankruptcy can help discharge or reorganize tax debt, not all taxes are eligible for discharge, and tax liens may remain in place. Chapter 13 offers specific advantages over Chapter 7 in certain cases, such as discharging penalties and curing mortgage arrearages. Before deciding on bankruptcy, it’s critical to consult with a bankruptcy attorney or tax professional to explore all your options and determine if bankruptcy is the best path for resolving your tax debt.

Filing or Settling Back Taxes?

Contact Cioe & Wagenblast, P.C. if you need professional tax law representation with your back taxes. Each tax matter is different because every person’s situation is unique. We can quickly & efficiently analyze your circumstances and propose various options of resolution. Contact us today!

Your Best Action is to Take Action

Your best action is to take action. In other words, indecision is a decision.

We can help eliminate or reduce tax debt to a more reasonable amount. We negotiate and set up payments that work for your budget. These actions help you move on, rebuild your credit, protect your money and business, and get your life back! Contact Cioe & Wagenblast, P.C. today to learn how we can help!