A Look Back: Top Tax Stories of 2018

What a year we just experienced! The nation enjoyed record-low unemployment nationwide, though skyrocketing housing costs impeded many people’s prosperity. Despite what some economists called ominous signs of impending recession, the economy continued to soar. We saw the return of “Roseanne” to TV in a stunning ratings success (and just as quickly witnessed her downfall and departure). Politics continued to dominate our attention as voters across the nation decided to switch parties in the U.S. House of Representatives, setting the stage for divided government in 2019. Through it all we enjoyed trying the dance phenomenon “The Floss” – though most adults failed miserably. And audiences flocked to theaters in droves to see “Black Panther,” making it one of the highest-grossing movies of the year.

As the world swirled about, 20/20 Tax Resolution remained focused on all things taxes. There was a lot of tax news over the past 12 months. Much of it was reported in our 20/20 blog, but it was nearly impossible to update readers on everything that occurred (and who’s interested in reading endless accounts of tax news, besides us?). To save you some time, we compiled the following Top Tax Stories of the year just past, which provide a preview of what tax news to watch for in 2019.

Deficit soars, tax cuts blamed

The tax bill signed into law by President Trump in December 2017 took effect in a variety of ways last year but one impact almost certainly resulted in soaring U.S. deficits, according to data from the Congressional Budget Office. Although the U.S. Treasury reported in October that revenues grew in 2018 by nearly $14 billion, that doesn’t tell the whole story. Under the previous tax policy replaced by the new GOP law, revenue was projected to be $3.5 trillion. Under the new law revenues were $202 billion less, which could not accommodate the $127 billion in new spending last year – increasing the deficit in the process.

And speaking of tax cuts, you likely took home more money

As a result of the GOP tax law, about 90 percent of wage earners saw an increase in their paycheck in 2018 upon the release of the years federal tax withholding tables in February. Tax tables determine how much money employers withhold from an employee’s paycheck under the Tax Cuts and Jobs Act, as well as reflecting other changes that impact the repealed personal exemption and an increase in the standard deduction. However, the extra cash may not be all rosy news for some taxpayers, as the reduction in withholding might impact tax refunds come tax season. 20/20 advises taxpayers to be aware of these changes to ensure they’re not caught off guard by a lower than anticipated refund or even the possibility of a tax liability due to the new provisions.

Funding cuts continue to impact IRS

The rates at which the IRS audits tax returns continued its multi-year decline, particularly among high-income individuals and large corporations. Primarily due to deep cuts in IRS funding and staffing that began in 2010, the lack of resources became even more critical as the agency began implementing and enforcing the new tax law, with no new enforcement resources allocated. At $4.9 billon, the IRS’s enforcement funding was 23 percent below its 2010 level in inflation-adjusted dollars.

Collection agencies bully taxpayers, IRS looks the other way

As reported in 20/20’s June 13th blog post, the National Taxpayer Advocate’s annual report to Congress strongly suggested that private debt collectors were bullying taxpayers into payment plans that might not suit their needs. Private agencies are prone to setting up payment terms that fall within the streamlined guidelines that don’t require taxpayers to submit financial information. However, these are not always the best option although they are among the easiest solutions to apply. The advocacy group said the IRS should do more to protect taxpayers from these practices.

Tax scams explode exponentially

We told you about the explosion of tax scams in a May blog post that detailed the two biggest types of tax scams proliferating across the country this year: one which preys on those owed refunds and the second aimed at those with delinquent tax obligations. More recently, the IRS warned taxpayers in early December to be on the watch for phishing scams following a surge of new sophisticated email scams seeking to steal tax data, allowing identity thieves to abscond with an individual’s tax refund. According to the IRS, there has been a recorded 60 percent increase in nefarious, fraudulent email schemes in 2018.

International travelers with tax debt face passport problems

We told you in January about new IRS procedures affecting international travelers with “seriously delinquent tax debts.” A new enforcement policy took effect this year that would put the passports at risk for travelers who owe $51,000 or more in unpaid back taxes for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired – or the IRS has issued a levy. So the message is clear: Pay up or stay home.

And finally, we would be remiss if we didn’t reflect once again on the occasion of 20/20’s 20th Anniversary, which we commemorated all year long with a series of blog posts and internal celebrations. As we move forward into our 21st year, we remain grateful for the opportunity to serve the thousands of clients we’ve helped throughout the years and we continue to vow to provide the most effective, most professional and most compassionate assistance to taxpayers everywhere who need help resolving their tax issues. Together, let’s make it a fantastic 2019!

Happy New Year!

Tax Tip: Top Things To Know When You Owe

It’s what most every taxpayer dreads: Despite your best efforts, you find yourself owing money to the Internal Revenue Service with an inability to pay the debt immediately. In addition to feeling stressed about the money you owe, you’re concerned with the consequences of delaying payment and what this might mean for your finances or your business. In addition, you’ve started to worry about actions the IRS might begin to take to ensure payment.

Our first piece of advice: Don’t panic. Take a minute to breathe and understand that you’re not the only person experiencing this problem. Thousands of U.S. taxpayers each year find themselves in similar circumstances. You’re not alone.

Our second piece of advice is to address the problem head on. Don’t ignore the notices you receive from the IRS, and don’t bury your head in the sand wishing this problem would just go away. It won’t – at least not without your attention.

At 20/20 Tax Resolution, we hear from folks just like you all the time. We understand the fear and frustration that comes with tax difficulties. In addition to staying calm and addressing the problem, here are some other things you should know when facing this challenge:

The IRS wants to work with you. Believe it or not, the IRS is not out to “get” you. Although the agency has some pretty powerful methods it can use to ensure payment, it typically saves such aggressive measures for taxpayers who ignore IRS communications or refuse to take steps toward a resolution. Enforcement actions like bank levies, accounts receivables levies, wage garnishments and asset seizures are rare and used typically as a last resort. By acknowledging the problem and working to make good on the debt, you won’t be subjected to these extreme actions. Plus, 20/20 has a variety of tools we can use to intercede and ensure that these extreme IRS actions are avoided.

Communicating with the IRS can be difficult. It’s no secret that working with any government agency can be challenging and time consuming. In the case of the IRS, the challenge is exasperated by the agency’s lack of adequate funding and personnel. If you are “going it alone,” be prepared to spend inordinate amounts of time, effort and frustration tracking down the right person to help you, waiting on hold for information and then deciphering the meaning behind complex tax policies and procedures. In order to alleviate these headaches, work with a qualified tax resolution provider. Since we work with the IRS on a regular basis, 20/20 is very familiar with the agency’s communications processes, and we know how to reach the right person to get the right information.

Delaying and avoiding the issue can cost you. As we mentioned previously, the IRS really does want to work with delinquent taxpayers. However, delaying moving forward with a problem (or attempting to avoid the issue altogether) will result in more interest and penalties accumulating on your total debt. When faced with taxpayer inaction, the IRS can become quite aggressive. It’s in your best interest to avoid any delay and begin working toward a settlement or payment process right away. Doing something is always better than doing nothing.

Your chances of a better outcome increase when working with a tax resolution pro. For a variety of reasons, some taxpayers opt to navigate the IRS system on their own. Many times, they’re concerned about their privacy, are ashamed to share the details with a stranger or just feel confident they can manage everything themselves. If this sounds like you, go back and re-read this article for all the reasons you should change your mind. Plus, here’s one more: Working with a qualified Enrolled Agent can reward you in several ways. Not only will your hassles, worry and frustrations be reduced, but in many cases your settlement or financial outcome will be better, too. In the case of submitting an Offer in Compromise, working with a tax resolution professional that’s familiar with the process and knows all requirements will significantly increase your chances of winning approval.

While reactions to owing the IRS can vary, it’s fairly typical for taxpayers to feel some level of worry and concern. However, understanding the above issues can help ease the minds of those in this worrisome situation. Above all else, remember that you’re not alone, and that owing the IRS is not a moral failure. Running a business and a family household (or both) can be difficult – and no one can expect everything to go smoothly all the time. At 20/20 we understand this, and we can help.

New Year. New IRS Interest Rates.

Interest is the nasty little way your tax liability grows and grows.  The IRS is not in the business of lending taxpayers money and has determined that interest rates will increase on unpaid tax balances come 2019.

Beginning January 1, 2019, the IRS will begin charging 6% for underpayments and 8% for large corporate underpayments.  On a more pleasant note, if you find yourself expecting a refund from the IRS due to overpaying your taxes, the IRS will also be applying 6% interest (5% for corporations and 3.5% for corporations overpaying more than $10,000) to any refund not issued within 45 days of accepting your tax return or the April tax deadline, whichever is sooner.

If you’re not sure if this will impact you, interest is charged on any unpaid tax from the original payment due date until you have fully paid your tax obligation.  Don’t let your liability weigh you down any longer.  Contact 20/20 today to discuss putting an end to your tax liability so you’re not paying for the right to owe the IRS any longer.

Taxes 2018: How The New Tax Law Will Impact Your Return

The biggest tax story in recent memory was the passage of the Tax Cuts and Jobs Act, which President Trump signed into law on Dec. 22, 2017. The new law creates several notable changes to withholding policies, the standard deduction, personal exemptions, the child tax credit and more. As we head toward the end of the year (and the beginning of tax season), we thought a tax reform primer is in order. Here’s what you need to know to prepare for next year’s filing.

Withholding

Many taxpayers’ withholding requirements were reduced in early 2018, enabling folks to keep more money from their paychecks throughout the year. However, this may mean a smaller refund than normal, or even an unanticipated tax bill next April. If you did not adjust your withholding after the requirements changed, you may be impacted and will want to keep this in mind when preparing your tax return next year.

To find out where you stand with these changes, you can use the IRS Withholding Calculator to perform a Paycheck Checkup, which will help you determine if you should adjust your withholding or make estimated or additional tax payments now. Use the results from the calculator to submit a new Form W-4 (Employee’s Withholding Allowance Certificate) to your employer.

Refunds

In addition, there are changes to the standard deduction, a suspension of some personal exemptions, an increase in the child tax credit, new credits for other dependents and new limits to (or the complete elimination of) certain other deductions. Be certain to research these changes if they impact your taxes to ensure you are complying with all new regulations. And keep in mind that your refund may be different (or you may even owe the IRS) as a result of these changes. If you anticipate getting a refund, remember that some refunds cannot be issued before mid-February 2019 (particularly those refunds that claim the Earned Income Tax Credit or the Additional Child Tax Credit).

A shorter tax form

The Form 1040 for tax year 2018 is shorter and replaces the current Form 1040, Form 1040A and the Form 1040EZ. The new Form 1040 can be supplemented with up to six additional schedules if needed. If you prepare and file your own taxes electronically, you must sign and validate your electronic tax return by entering your prior-year Adjusted Gross Income or your prior-year Self-Select PIN.

Get the whole story

Since the Tax Cuts and Jobs Act became law, the IRS has been working with tax return professionals and tax software developers to implement the new law and ensure taxpayers can rely upon these services for accurate information. To uncover how the law might impact you and your family, the IRS has created a new publication, Tax Reform Basics for Individuals and Families, which provides a complete overview of everything you need to know.

The Buzz Around A Credit Freeze

New Regulations Help Consumers Fight ID Theft. Here’s what you need to know to protect yourself.

A new federal law that took effect Sept. 21 mandates easier (and less expensive) protections for consumers hoping to shield their credit information against fraud and Identity Theft.

Under the Economic Growth, Regulatory Relief and Consumer Protection Act, consumers now have a guaranteed right to freeze or un-freeze their credit with no fees attached. Previously, consumers could contact the three major credit bureaus (Equifax, Experian and TransUnion) and institute a credit freeze for $10 at each bureau, preventing unauthorized access to a person’s credit and credit information. When you wanted to unfreeze your credit, an additional $10 fee was charged per bureau.

As a result of the new law, all requests for a credit freeze are completely free of charge and there are no fees for un-freezing credit at any time. In addition, a credit freeze can now be instituted for up to one year rather than the previous 90 days.

This huge victory for consumers comes just one year after Experian acknowledged a monumental data breach that put the credit information of nearly 150 million people at risk. Unfortunately, many consumers aren’t exactly certain what a credit freeze accomplishes, and there are a lot of misperceptions about how a credit freeze works.

What is a credit freeze?

A credit freeze allows consumers to maintain strict control over who has access to their credit and credit information. Once you institute a credit freeze, criminals are prevented from opening a credit card in your name, applying for a loan in your name or otherwise fraudulently accessing your credit. Insurers and employers are exempted under a credit freeze, and still have access to your information. In addition, your credit report can still be released to existing creditors or to debt collectors acting on their behalf.

However, under a credit freeze you are still able to use your existing credit cards or access any existing credit products you may already possess (like a home equity loan). You can unfreeze your credit in the event you decide to open a new credit card, apply for a mortgage or otherwise access your credit, and it should be available to you within an hour of lifting the freeze.

The new law also allows parents to initiate a credit freeze for children under the age of 16, freezing the credit file until the child is old enough to use credit. Also, if you have guardianship, power of attorney or conservatorship over an adult, the new law allows you to create a credit freeze on behalf of this person.

The key thing to remember is that a credit freeze provides protection from unauthorized access to credit but does not prevent you from accessing existing available credit.

Why institute a credit freeze?

Since there are now no financial fees or penalties for initiating a credit freeze, there’s really no good reason not to do so, according to credit experts. The main exception is when you know you will soon be applying for a new mortgage, opening a credit account or otherwise accessing your credit. But most financial advisors agree that initiating a credit freeze substantially limits potential abuse of your credit report and is in a consumer’s best interest even if their information hasn’t been compromised by any type of data breach.

What about other preventive measures like fraud alerts?

A fraud alert attaches a “red flag” to your credit, requiring lenders to verify your identity before issuing a loan or credit card. That typically means receiving a call to check if you’re at a particular store or bank attempting to take out new credit. There is no fee to institute a fraud alert and under the new law they last for one year (they previously lasted for 90 days). Victims of Identity Theft are entitled to an extended fraud alert, which lasts for seven years. To create a fraud alert you need to contact one of the three major credit bureaus, which are required to notify the other two of your decision.

What’s the next step?

If you think a credit freeze or fraud alert may be the right thing for you, the recently enacted law makes it even easier to do so. As part of the law, the three major credit bureaus are required to create an online option making it quick and easy to initiate your credit freeze. You will need to provide your personal data (name, address, date of birth, Social Security number, etc.) in order to create a credit freeze. Once you do so, each credit reporting company will provide you with a confirmation letter that includes a unique Personal Identification Number (PIN). You will want to keep this information private and readily available since you’ll need it to when you choose to lift the freeze.

In accordance with the new law, here are the links to all credit bureaus where you can institute your credit freeze:

20/20: Our Most Unusual Cases

From keeping Alaskans connected to saving Christmas, 20/20’s work goes well beyond dollars and cents

Over the past two decades, 20/20 Tax Resolution agents have seen and heard just about everything. Clients come to us because they’re facing devastating setbacks, financial missteps or stumbling business ventures. Our job, however, is not to judge the circumstances of these clients. It’s to help them find a way back to their productive, satisfying and happy lives. In the process of doing our work, we’ll go to great lengths to help clients reach their goal. Our innovative agents are accustomed to going the extra mile, leaving no stone unturned and fighting for the best resolution.

The following are just a few of our most unusual cases from the past 20 years:

The Doubter

You know you’ve done something right when your client is in such disbelief that he asks to call the IRS to confirm the outcome you’ve achieved.

“This client owed around $63,000,” said 20/20 Agent Alberto Douriet, E.A. “After reviewing his file, we found a settlement would have been around $10,000. He wanted an Offer In Compromise (OIC).”

Not bad, Alberto thought. But he suspected there could be a better resolution in a payment plan. Here’s why: Little did the client know, the Collection Statute Expiration Dates were scheduled to expire in nine months. Alberto explained to the client he could pay the $10K with an OIC, or pay a mere $125 a month for nine months until the expiration (a total of only $1,125). Of course, the client jumped at the chance to so dramatically reduce his costs.

“The first few times the client and I spoke, he was set on an OIC and didn’t want to talk about anything else,” Alberto said. “He was a very “hands on” individual, so I sent him information about CSEDs and encouraged him to do his own research on these matters to gain his trust, which I quickly did. Once it was all over, he was in shock.”

Saved From An Embezzler

What do you do when the CFO of your company embezzles more than a million dollars? Throw in the towel and move on, right? Not in the case of an enterprising client from 20/20 Agent Gabe Leap, E.A.

“This case was strange and unusual in that the proprietor of the existing business had nothing to do with the tax liability,” Gabe said.

Not only had a scoundrel embezzled money, but he liquidated the retirement accounts of employees. Without expert intervention, the company’s dedicated workers would be left high and dry – and without a job.

“The taxpayer only took it over in an attempt to keep the business operating so he and his fellow employees would have a place to work,” Gabe said.

A noble cause, indeed. But one fraught with a lot of headaches and risk – not the least of which was potential prosecution from law enforcement. Fortunately, Gabe and his team were able to deflect any charges and de-fuse the situation – and in the end people’s jobs were saved.

“We had to negotiate stays of collections and bring the FBI and the Department of Labor,” Gabe said. “We were able to legitimize the claim to the taxing authorities that the theft was the reason for the accrual.”

Saving A Necessary Service

When you live in a remote area, you’re often at the mercy of Mother Nature and challenging logistics. It’s not always easy to do simple things – and basic needs must be constantly replenished, often from far-off locations. So an airline delivery service that provides necessary goods and services is a critical need.

“Our client was an aviation company that flew critical flights to service remote parts of this state with goods and services,” said 20/20 Agent Joe Cunningham, E.A. “The client flew for the U.S. Postal Service, the FBI and local law enforcement, among other organizations.”

But when tax issues threatened to ground the planes, 20/20 was able to work with an alphabet soup list of government entities and mechanisms to keep pilots (and packages) in the air. All told, the 20/20 team’s efforts to save the company involved coordinating with the United States Postal Service (USPS), the Federal Aviation Administration (FAA), the FMS Division of Treasury, the IRS and others to save the airline.

Cunningham and his team used a variety of mechanisms to resolve the airline’s financial woes.

“We saved their company,” Joe said, “and kept this service available to residents.”

Boy Trouble Leads To Tax Trouble

Sometimes true love is not what it seems. But in the heat of the moment, we swear we’ll do anything to demonstrate our commitment to a relationship. Common sense doesn’t always win out.

“This client had significant penalties as a result of relying on a prior boyfriend who convinced her to be a ‘tax protester’ for several years,” said 20/20 Agent Matt Schiller, E.A. “He persuaded her that income tax in the United States is unconstitutional.”

Matt was able to work with the client to educate her on why she should promise never to take this position moving forward. In turn, he was able to convince the IRS of his client’s new perspective, removing the stigma and bias toward her that her Revenue Officer had developed due to the client’s previous viewpoint.

“I established an installment agreement to resolve the back tax,” Matt said. “We are currently preparing a penalty abatement request.”

Senior Security

Even the U.S. Government can have a heart sometimes. That turned out to be just the case for one of 20/20 Agent Tiffani Million’s clients. Tiffani’s client, a 71-year-old graphic designer, lived off his Social Security earnings and made a very limited amount of extra money through his small graphic design business.

“His business generated very little income and it possessed assets with little to no value,” Tiffani said. “Personally, he had one used vehicle and possessed no other assets with equity.  After he paid all of his monthly expenses, he didn’t have much left to live off of at the end of the month.”

Unfortunately, he owed back taxes of more than $84,000 – a sum he could never even consider hoping to pay. Tiffani recognized his situation was untenable, and performed what some might say was a miracle.

“I submitted an Offer in Compromise on the taxpayer’s behalf for $1, because of his extreme circumstances,” she said. “And the Internal Revenue Service accepted!”

Helping A Client Move Forward

It was a “Catch 22” type of situation for one of 20/20 Agent Sam Million’s clients. The client couldn’t pay her taxes because of lack of work, and she couldn’t land a steady job because of a federal tax lien on her credit report. What’s more, she was facing a $40,000 tax liability.

“The client had been mostly unemployed for several years with the occasional contracting position that would last one to three months,” Sam said. “We had tried several different methods of resolution, including an Offer in Compromise on her $40,000 tax liability. When we finally had an examiner agree to give a settlement of $6,000 the client had no current income and couldn’t afford the repayment.”

It seemed she was doomed to failure no matter what she did. But Sam didn’t give up hope. He understood that a clean credit report could help the client in her pursuit of full-time work – and the federal tax lien was preventing that from happening.

“After several months we decided to pursue a withdrawal of the federal tax lien so she could then qualify for a more long-term job position,” he said. “We had never requested a lien withdrawal with no resolution in place or tax liability being full paid. But we rolled the dice and submitted a request for the lien to be withdrawn so that the taxpayer could qualify for job opportunities and an income that would help her sustain a repayment plan to the IRS.”

The IRS Technical Advisor agreed to this, and issued a withdrawal of the federal tax lien, Sam said. In addition, the 20/20 team was able to negotiate a first-time abatement on the liability, reducing the client’s debt by roughly $6,000.

Saving Christmas for 100 families

Think of this scenario: The IRS issues a hefty levy against your construction company. It’s five days before Christmas. The $1.7 million liability is just $100,000 shy of your total business bank account. You’re forced to tell employees they won’t be receiving their expected regular paycheck right before the holiday.

Although he didn’t sport a white beard and a jolly red suit, 20/20 Agent Mike Ranalli may as well have swept in on a one-horse open sleigh when he told the business owner he had secured a release of the $1.7 million levy just prior to Dec. 25th.

“We were able to get the entire levy released through procedural wizardry,” said Mike. “As a result, the business was able to pay the company’s more than 100 employees. The night we told him about the funds release, our client said that he went home and downed a mug of vodka. No ice. No mixer. Just a mug of vodka. Whew!”

20/20 Hindsight

How We Began, Where We’re Going. Looking back on 20 years in the tax resolution business.

Two decades ago, the tax resolution business was a burgeoning industry. Consumers facing IRS action and beleaguered by complicated tax issues were clamoring for answers and assistance. Taxpayer expectations were high, and were sometimes accentuated by the dramatic results promoted by many of the new resolution firms.

“At the time there weren’t very many companies in the industry,” said Brian Biffle, who along with Tim Shea and Hansen Rada founded 20/20 Tax Resolution in 1998. “There was a tendency for companies to focus their promotional efforts on these spectacular resolutions that were sometimes secured. But the value and peace of mind consumers gained just by having an expert on their side sometimes became lost or ignored.”

Biffle, Shea and Rada knew there was a better way. They felt that clients in need deserved a straightforward approach, an honest assessment of their options and more important, the relief of knowing they were in capable hands. And they knew that increasing competition in the industry would be one way to encourage more accountability for all consumers.

Together, they thought, why not “show ‘em how it’s done.”

“Starting a business seemed like a good idea when you’re in your early 20s and don’t have anything to lose,” Biffle said only half joking. “We were young and we didn’t have mortgages and children.”Anniversary

Thus, on August 3, 1998, 20/20 Tax Resolution was born. The name signified the “perfect vision” the new company could provide to clearly see through complicated tax liabilities and options. The company’s promise: “Visualize a financially secure future.”

“We were really focused on being honest with our customers about what they could and could not accomplish with resolutions,” Biffle said. “We wanted to be realistic about what they could expect from their resolution.”

What’s more, 20/20 wanted to offer clients value without over promising results, resorting to pushy sales tactics or using fear-based hooks to lure nervous taxpayers. The newly formed company wanted to give customers a clear choice in an industry where competition was low and consumer vulnerability was high.

“We knew we could provide plenty of value without claiming that every client was going to save $100,000,” he said. “We could provide a clear assessment of their chances of success and what they could save. And we could demonstrate why it makes sense to hire an expert representative.”

20/20 understood right from the start that the peace of mind generated from having a knowledgeable expert in your corner cannot be underestimated. The company treated clients with respect and as partners on the road to a positive resolution.

“When you start a case you can’t promise things you don’t know,” Biffle said. “Clients respect that you might not have all the answers right away. They respect that honesty. That’s really the foundation of the whole company. Being honest with our clients. Being honest with our employees.”

A lot of disparate issues come together to create a great outcome, Biffle said. Sometimes issues are the client’s responsibility and sometimes they are our responsibility. The key at 20/20 has always been (and will always be) to develop the trust between our agent and the client to create the best possible resolution.

“If you’re negotiating on someone’s behalf for a year and you’re only giving them good news, something’s not right,” Biffle said. “Life’s not always about good news, and when you tell the client both the good and the bad they respect you more.”

With a solid business plan and approach in place, the stage was set for 20/20’s success. Of course, there were pitfalls along the way. Legal and legislative issues arose at times. And of course, there have been the ever-present challenges that come with running any business. There were times projections for company growth exceeded reality – and times when initial hopes for new hires fell short.

“Hiring and then having to lay people off is really tough,” Biffle said. “We care about all of our employees and anyone who has ever worked here.”

Over the years, 20/20 endured the ups and downs to become one of the industry’s most successful and respected firms of its type. Through three different offices and from one employee to more than 100, the company has grown by leaps and bounds. In just its second year (1999), the firm experienced significant growth eventually leading to $10 million in revenue by 2008. To date, 20/20 has served more than 27,000 clients in all 50 states.

Along the way, the company has evolved to meet the needs of clients, as well as to adapt to changing tax regulations and policies. After years of experience, the company recognized the challenges clients can face after their resolution is finalized. Sometimes, life circumstances interfere with a client’s ability to meet payment plan obligations. Other times, a mistake from a taxing authority can negatively impact an agreement. To combat these issues (and others), 20/20 created POA+ in 2008. This subscription-based service provides clients with ongoing monitoring of taxing authorities to ensure that no action on your status is taken without your knowledge. It maintains 20/20’s Power of Attorney on your behalf to ensure quick action should any issues arise and provides continued access to your 20/20 team for any questions you might have.

As for the future, Biffle said the company will continue to develop better and more cost-effective ways to assist taxpayers in an environment that is constantly changing. In the current political environment, decreasing funding for IRS operations makes the type of services 20/20 offers even more essential to taxpayers in need of assistance.

“We hear from clients everyday about how difficult it is to contact the IRS and get answers from them,” Biffle said. “Our worry is that this will only get worse the more the IRS becomes defunded. A person running for office saying ‘I want to give the IRS more money’ is not a real popular campaign slogan. We’re going to continue seeing taxpayers facing these problems.”

On the horizon, Biffle said the company is working to help alleviate some of that complexity by adding services for payroll issues and better financing options for clients. In addition, 20/20 is working on a product that will help clients quickly identify where they stand with the IRS for a low fee, allowing them to obtain the type of information they need to make important decisions.

“We have a lot of great things queued up for the future,” Biffle said. “I want us to continue to do what we’ve always done, which is to provide outstanding, ethical service to our clients. We’ve faced our challenges but looking back over 20 years I don’t see any challenge we can’t handle.”

Why Tax Resolution Software Isn’t the Answer

When you hire a doctor or attorney, you expect them to have an expert level understanding of your situation and how they can remedy the problem you came to them with.  Tax resolution is no different.  While the IRS authorizes any Enrolled Agent, Certified Public Accountant, or Attorney to represent a taxpayer before them in the collection process, these designations also serve other forms of representation such as ​tax preparation or bookkeeping.  Each one of these credentials permits a professional to work in many capacities as a representative, but it is up to the professional to determine their ​area of focus and educate themselves on the ins and outs of the representation they choose to undertake.

With bookkeeping and accounting comes the requisite knowledge to adequately track the day to day revenue and expenses of a business and record it properly.  There are countless accounting techniques that only someone with specific training and continuing education in the field of bookkeeping​​ and accounting would know.  With tax preparation comes the need to have an in depth working knowledge of the tax code to minimize each clients tax liability with a reasonable basis for each position taken.  Tax resolution is no different than these two forms of representation and in fact requires a multitude of profic​i​encies.

Resolution work requires familiarity with the IRC and IRM, an ability to interpret a taxpayer’s entire situation and apply their needs to a resolution that fits, the ability to recognize when the IRS or state has stepped out of line and not followed proper procedure, knowledge on how to move from one resolution strategy to another seamlessly without exposing the taxpayer to enforced collection, and in an esoteric sense, the ability to motivate taxpayers to seek compliance and establish systems to prevent the issue that caused a need for resolution from recurring.​ Business people shaking hands, finishing up a meeting.These profic​i​encies cannot be gained by simply accessing software that assists with the completion of forms and documents required for a specific resolution option.

The key takeaway we want to leave each reader with is that while there are many ways tax professionals can foray into the resolution world, walking down that path should not be done under the guise that software designed to facilitate the resolution process will create the ability to provide excellent representation.  Excellent representation comes from a working level understanding of the resolution process gained over time through study and work experience​.​ ​Just as accounting software does not make you a competent accountant nor tax preparation software make you an expert at tax preparation, determining the best approach to resolving back tax debt cannot be determined by inputting data into a program.

Avoid Criminal Consequences & Find Harmony

When the IRS sees a business owner with a history of failure to remain compliant, in addition to seeking repayment of back taxes, they can set out on a path to preclude that owner from opening or operating additional businesses.  This path leads to an injunction being sought by the Department of Justice (‘DOJ’) to preclude further business activities that may result in additional taxes going unpaid.  In doing this, the IRS looks to lessen the damage that may come from schemes promoting tax fraud.  Unfortunately, many who have simply run into tough times and have fallen behind on their taxes can become the target of one of these injunctions.

When an injunction is put into place and subsequently violated, the failure to comply is pursued with criminal prosecutions for contempt of the injunction order as well as civil remedies which can involve the forced closure of a business.

“Lead the people with administrative injunctions and put them in their place with penal law, and they will avoid punishments but will be without a sense of shame. Lead them with excellence and put them in their place through roles and ritual practices, and in addition to developing a sense of shame, will order themselves harmoniously.” –Confucius

Shame is a word that no one wants to be associated with.  When we feel shame, we reminisce on our failures that lead to the shame.  Often times, shame follows the failure.  Confucius tells us that by developing a sense of our own shame, we can allow the shame to precede the failure and subsequent punishment that may come from that failure and instill practices that prevent the failure from coming about.Young female entrepreneur working in a home office

The IRS is out to prevent future failures by way of injunctions.  We are here to prevent future failures by helping our clients develop the processes necessary to remain compliant and show the IRS that an injunction is not necessary.  We encourage the use of a payroll company for all future filings to ensure that nothing falls behind.  We partner with the largest payroll providers in the country to streamline implementation and allow you to stay focused on your day to day business operations.  Additionally, we work the the IRS to make sure that all deposits paid timely are communicated to revenue officers handling the case, so they do not find the need to recommend an injunction to the DOJ.

If your business has fallen behind and you are not sure how to address the liability, contact us today.  Once our representation is in place, we will work diligently to prevent the need for an injunction to be sought and get your business back into compliance with the taxing authorities.