Small Business Accountant Chicago – What to do if you’ve been levied

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You own a small business and you’ve been levied. What do you do now? 1 – Check the amount for reasonableness I’m sure it is difficult to believe, but governmental agencies do make mistakes from time to time. When investigating the amount, please understand that the balance owed will probably also include interest and penalties that accrue monthly or quarterly in varying amounts depending on the tax type and individual agency involved. Sometimes, the amount requested is incorrect by design. The Internal revenue Service now has a process where if you have not filed a return for a long time, they will file one for you. They will ask if the return is correct, and give you a time period with which to respond to the return’s accuracy. If you do not respond, they assume that it is correct and begin the collections process. The only problem is that they usually pick up all of your income from sources reported like 1099’s and don’t deduct any expenses. Many non-filers don’t open mail from the agencies in the first place and will have this happen without even knowing about it. 2 – What to do if the amount is reasonable If they have a levy in place, it isn’t going anywhere. The sooner you handle this, the less expensive it will be. Either hire a reasonable Tax Accountant to contact the governmental agency or contact them yourself. Payment plans can usually be worked out depending on the amount in question. If the amount is large, you are not going to have the knowledge or competency necessary to handle it. Get representation now. 3 – Understand your Taxpayer Rights There are several, but the most important one in this instance is your Right to Counsel. Under most circumstances, you are not required to answer any questions without having a competent Accountant or Attorney present. Hire someone that you like. Someone that you trust. Someone who has the correct experience and knowledge. And then be smart enough to take their advice. If an agent knocks on your door and starts asking you questions, you should hand them your representative’s business card, and ask them to call your representative. Do not lie. Do not be aggressive. Simply say that your accountant’s name is X and that they should call. Also please realize that most taxation issues are not major legal fights like you see on television. These are administrative type hearings that are worked out based upon the evidence presented. Most attorneys do not have the style and demeanor necessary to work out a reasonable deal. Attorneys only make money when there is conflict. The last thing you need at this point is more conflict. 4 – What to do is the amount is unreasonable Hire competent representation and get the balance resolved. Depending on the time in question, the type of tax, and the statute of limitations, this may be resolved by filing the appropriate returns. If not, someone may need to sit down with a revenue agent to work out a reasonable balance. 5 – Beware the Revenue Officer saying that they are there to help you Revenue Officers are primarily collection agents. They aren’t there to help you. They are there to collect the maximum amount that is legally allowable by law. Getting into long conversations with these people normally does nothing but hurt your case. I don’t know how many instances I have seen where an Officer said that they were there to be reasonable and to help. Of course the client’s checking account got cleaned out a month later. And once that levy is sent to the bank, there isn’t anything that anyone can do. Whether it is reasonable or not, the bank has to comply. Again, be careful. Governmental agencies do make mistakes in assessing taxes. Many times, they will just not apply payments correctly. Unless it is something that is very simple, get representation. If you have issues in this regard, please give us a call. Additional information and accounting articles can be found at www.AccountingSolutionsLtd.com