Taxpayer Resolution Services Success Stories

Don’t be fooled by empty promises by other tax relief companies. No one can ever guarantee successful settlements or that what you owe will be settled for pennies on the dollar – Never.

At TPRS you will be presented with an honest assessment of your success rate and a range of you can anticipate your final settlement of taxes you can usually have to pay from the very beginning. In most tax problem cases, taxpayers acknowledge that they owe the money and would like to pay their taxes … just not now. Sometimes you don’t even know what you owe, how the IRS can collect from you or what you can do to reduce your debt.

The CPAs at Taxpayer Resolution Services (TPRS) has successfully resolved hundreds of problem cases with the IRS since 2001. Our success rate is unparalleled by most other tax firms simply because we don’t take on cases we can’t win and on the cases we do take on, we know what we’re doing.

Small business owner owing $75,000 in back taxes

JA is a married, successful IT consultant with 3 kids. His wife is a realtor and housewife. Throughout the years, JA formed a company to provide IT services in addition to wages and other self-employment income he receives. JA had not filed his individual tax returns for over 3 years and was being assessed approximately $75,000 in back taxes from the IRS. JA never filed corporate tax returns.

JA first met with us after his bank account was levied and his employer received a Notice of Wage Garnishment from the IRS. The IRS was about to release notices to other customers he provided services to. JA wanted to file and pay his income taxes but never thought he had the cash needed to do so. He know he owed taxes but estimated them to be only around $35,000.

We were able to release the wage garnishments and get JA additional time to settle with the IRS. We negotiated JA’s tax liability down to around $18,000 after deductions and a payment plan of around $2,000 down and less than $325 a month. Total professional fees were less than $9,000 and took less than 3 months to settle.

Real estate investor owing over $90,000 in taxes

HR is a single real estate professional that buys, fixes up, rents and sells properties. HR received several IRS letters on the examination of his tax return. HR never responded as was being assessed over $90,000 in additional income taxes. Furthermore, the IRS expanded its audit to the last 3 tax years. HR also failed to file corporate tax returns for a Company formed receiving commissions on real estate sales.

HR’s tax return was prepared inexpensively by a person moonlighting as a tax preparer. There were numerous deductions that could have been taken that were not. There were certain tax beneficial elections available to real estate professionals that would have significantly reduced his income taxes that were not filed timely. There were ridiculous deduction amounts reported for automobile expenses, travel, meals and entertainment – high exposure areas to a taxpayer in tax examinations.

We were able to get additional time from the IRS to reconstruct records and prepare both individual and corporate tax returns. This additional time also allowed us to have the very first year of examination (the one with the highest exposure) excluded from examination. We reconstructed all records and tax returns resulting in eliminating all taxes assessed and preserving a loss carryover which eliminated all income taxes that would have been owed for succeeding tax years. Taxpayer received a refund check of around $25,000, paid no taxes in the following year and is able to exclude around $50,000 in income that would be otherwise taxable thereafter. Total professional fees to the taxpayer were around $18,000.

Divorced wage earner owing around $95,000 in back taxes

RB is an older, divorced wage earner that accumulated around $95,000 in back taxes after paying former spouse with accumulated retirement funds pursuant to settlement agreement. RB is in agreement with the amounts owed and has remaining retirement funds approximating $115,000 that the IRS would have otherwise taken in settlement of his tax debt. Furthermore, RB would be assessed additional taxes on the release of these retirement funds to pay his debt of around $27,000. The taxpayer’s goal is simply to keep as much of his retirement funds as possible, for as long as possible and pay the IRS only a minimal amount.

We were able to get the IRS to stop all collection activities and abstain from collecting its debt from the proceeds it would have otherwise received from these retirement funds. The taxpayer entered into an installment agreement to pay around $300 per month for the next several years at which time the taxpayer’s ability to pay would be reassessed. The taxpayer currently earns more than the payment amount in dividends and interest on the retirement funds. When the taxpayer reaches retirement age, he will be able to demonstrate that the retirement funds are only enough to meet living expenses and is expected to either remain uncollectible or settle his tax debt for a nominal amount. Total professional fees approximated $12,000 and were paid from retirement account balances that would otherwise have been levied.

Innocent Spouse Owes Around $35,000 in Back Taxes

TT is a young, divorced, single individual that was assessed $35,000 in back taxes, primarily from self-employment earnings attributable to a former spouse. TT was married at a young age upon entering the U.S. and divorced shortly thereafter.

The IRS can assert collection of taxes against spouses where the spouse signed a joint tax return, had knowledge or should have had knowledge of taxes that were owed, and had some degree of control over the finances of the married couple.

We were able to get the IRS to relinquish all claims of taxes owed against the taxpayer and proceed with collection against the former spouse even though the former spouse could not be located. We were also able to get the IRS to release previously filed liens within 30 days despite the fact that two other tax firms were unable to get these liens removed. Total professional fees approximated $900.

Short Sales With Over $2.2 Million Cancellation of Indebtedness

KW is a married, real estate developer that was looking at over $675,000 in income taxes on the cancellation of indebtedness associated with the abandonment of various real estate properties that received various 1099-COD or 1099-SA tax forms for 2009.

Recent enacted tax legislation provided economic relief where a taxpayer can attribute the debt cancellation to his primary residence, or in his case where the taxpayer meets the insolvency exception thereby allowing the debt to be cancelled without incurring the income taxes normally associated with the debt cancellation.

KW sought the advice of a bankruptcy attorney who correctly advised his client to seek the advice of his accountants. Through carefully calculating his economic position and completing the appropriate disclosures, KW was able to avoid what would otherwise have been taxable to him and obtain a $37,000 refund on all amounts withheld throughout the tax year. Total professional fees approximated $1,500.

US Citizens Residing Abroad Able to Escape Taxation on $90,000 of Taxable Income

EA is a married, US citizen, who obtained employment as a defense contractor in Afghanistan early last year. EA was initially contracted to work a period of 10 months at his new job.

US Citizens are generally required to file a US Tax Return reporting worldwide income including earnings overseas. However, certain exceptions apply to taxpayers who earn monies abroad and remain abroad for an uninterrupted period of 12 months, whereby approximately $90,000 of earned income can be excluded from taxable income. Furthermore, certain housing allowances are available in certain cases where earned income exceeds the annual limitation for exclusion.

EA renegotiated his contract so that his employment period could exceed the minimum 12 month requirement and pocketed somewhere around $20,000 in income taxes that would have otherwise been charged. Total professional fees approximated $375.

Deceased Father Leaves Apartment Building to Wife and Children in a Trust

Deceased father leaves 2 children and spouse an apartment building in trust approximating $2 million. The entire appreciation in the building, originally purchased far below market value escapes taxation on the transfer. Our clients, the recipients of the trust, bring us prior tax returns and trust documents to review and prepare current year tax returns. No recipient of the trust had previously claimed any income or loss from the trust.

In reviewing the tax returns filed, it was determined that there were prior tax losses resulting primarily from depreciation deductions never taken on the tax returns, and that all of these losses could be passed to the heirs of the trust resulting in significant tax refunds while avoiding taxation on future appreciation.

The combined refunds resulting from amending the prior tax returns far exceeded the approximately $3,000 in professional fees to amend 3 years of trust tax returns and individual income tax returns needed.

Tax Relief for over $10,000 in Income Taxes Where Taxpayer Failed to Make a Valid S Corporation Election

Without appropriate professional advice, entrepreneurial taxpayer, BB, decided to form a Company, go into business and strike out on his own. The good news is that the taxpayer made it big – everything he touched turned to gold. The bad news is that he failed to timely file a subchapter S election for his new Company – an election which entitles owners to avoid double taxation normally associated with corporations that do not meet certain qualifications.

Shortly after filing his Company’s tax returns, he receives a letter from the IRS stating his tax return has been rejected. Not only must he resubmit his corporate tax return, but his individual income tax return is wrong as well. The IRS recognizes that many new owners would have done this correctly if they had only known and provides certain relief provisions if you qualify. Though carefully navigating through applicable relief provisions, we were able to have the IRS accept his return as originally filed, thereby not only saving him the double taxation that would have been attributed to last tax year but the double taxation associated with the current year that he hasn’t even thought about. Total professional fees approximated $500.

Ex-Attorney Settles $40,000 Tax Debt for Less Than $3,000

Single individual taxpayer CC fails to file prior years tax returns and is assessed around $40,000 in back taxes. CC was previously an attorney and investor earning over $300,000 annually during better times. After several years of success, CC suffered a serious decline due to drug dependence, thereby causing her to lose her job, her position in the community, all her assets and remained almost solely dependent on family members for their help.

There was no doubt that CC owed the government around $40,000. The only problem is that CC had no assets to pay the debt, nor any known chance of ever obtaining enough monies to satisfy the debt given her current condition.

Through our help, CC was able to successfully enter into an offer-in-compromise with the IRS settling her $40,000 tax debt for less than $3,000. All tax liens were removed and the taxpayer was given a fresh start. CC’s only obligation was to remain current in her income tax filings and payments for a 5 year period thereafter. Shortly after settlement, CC filed suit against others for damages in an automobile accident and was awarded over $300,000 of which none of the proceeds were taxable or released to the IRS in satisfaction of her debt. Total professional fees approximated $3,000.

Realtor Owing Over $40,000 Gets Tax Payment Plan for Under $150 a Month

When times are good, they’re really good. And when times are bad, there just appears to be no hope in sight. That’s what DD thought when he came to see us with no money, no prospects of money and over $40,000 in tax debt.

DD is a typical victim of today’s troubled economy. Owing more than $40,000 in tax debt with very little or no source of income. In fact, DD couldn’t even come up with cash monthly necessary to enter into a standard installment agreement requiring over $800 a month.

We negotiated a payment schedule of under $100 a month which was enough to show that DD could pay something, as small as the payments were, and was wanting to pay his entire tax debt – just not now when he needed the money the most.

Fortunately, DD’s life has turned for the better. He restructured his business to target investors seeking to buy foreclosures and short sale properties, much like before, but only now more profitable. And although he’s paying his debt just a little at a time, DD gets to postpone his payments and use the money to reinvest in his new business venture. As long as DD keeps making the minimum payments, he still has the flexibility to use the cash where it earns him the most. His business. Total professional fees were less than $1,200.