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How Do You Respond When Your Client Receives THIS Certified Letter?

How Do You Respond When Your Client Receives THIS Certified Letter?
February 5, 2019 sdcdev
How Do You Respond When Your Client Receives THIS Certified Letter?

You’ve just had your morning coffee and you’re booting up your computer when your phone rings.

Picking up the receiver, you begin greeting the caller. Before you can get all your words out, he interrupts, obviously agitated.

“This is Joe Smith. I-I got a certified letter from the IRS. They imposed a lien on my bank account! (It’s actually a levy, but many people call it a lien.)

The concern in your client’s tone is coming through loud and clear. A tax levy is no small matter. His next word is….

“Help!”

 

Asses The Situation

First of all, when the IRS imposes a tax lien or levy, it doesn’t come out of nowhere. There has to be a good reason for such drastic action. If you’re guessing that Joe owes a delinquent tax bill, give yourself two points. Give yourself another point if you guessed that he ignored previous notices.

By the time a lien or levy is imposed, you can be sure the IRS has made a couple other attempts to collect Joe’s back taxes. It will automatically impose a tax lien against property if a taxpayer does not pay up (or make arrangements to pay) after receiving the first bill. If the lien fails to get your client’s attention, it gets worse.

Did you catch last month’s article highlighting the difference between a tax lien and a levy? Read it here.

 

Come Up With A Game Plan

If Joe has the money, it would be in his best interest to pay the bill in full quickly so the IRS can release the levy. But if the reason he ignored the bill in the first place is financial, all is not lost. There are options.

One of those options is an Offer in Compromise (OIC).

This is where you come in. An OIC offers a settlement for a lesser amount of taxes due as long as the bill is paid in full by a specific date. Sometimes the payment is pennies on the dollar.

Once the deal is in your hands, Joe (and other OIC candidates) can breathe a sigh of relief. When the adjusted OIC amount is paid in full, any recorded tax lien or levy is released and you’re client can begin to work on restoring credit.

But if this makes the process sound easy, anyone who has dealt with the IRS will tell you it is not necessarily so.

Opening negotiations with the IRS leads to mounds of paperwork, hours on hold, and tedious forms. Red tape is often the reason some tax pros avoid dealings with the IRS. Some actually walk away from providing this type of client service, leaving money on the table.

 

HOW IRS SOLUTIONS CAN HELP:

Members Only Benefits
IRS Solutions Software gives you the confidence to provide services, such as OIC and others you may have been uncomfortable with in the past. Another benefit of membership is the training you get on our monthly case study calls.

Don’t Miss Out! Sign up with IRS Solutions Software and Gain Access to These Informative Monthly Case Study Webinars on the 4th Thursday of Every Month at 10am-11am PDT.

By making sure your clients understand the importance of responding to IRS letters and new laws you’ll both avoid a big surprise when you least need it next tax season.

Ready to learn more? For starters, please pick up our FREE PRICING GUIDE. Act now so you’re ready when your clients owe tax bills this year.

 

 

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