Tax FAQ

Common Questions: Ohio Tax Attorney

How can I save money by filing my tax return?

By filing your tax return timely you can save money in many ways:

You may be entitled to personal exemptions, deductions, and credits, which can lower your tax. However, you may only claim such advantages if you have filed your return.
Failure to file a return, or filing late, can be very costly. If you owe taxes, a delay in filing may result in penalties and interest charges, which could increase your tax bill by 25% or even more.
You may be entitled to a refund. However, to receive your refund, you MUST file a tax return within three (3) years of the original due date of the return, or two (2) years from the time you paid your taxes.
Taxpayers who are entitled to the Earned Income Tax Credit MUST file a return to claim the credit even if they are otherwise not required to file. The return MUST be filed within three (3) years of the due date in order to receive the credit.
You stand to lose social security benefits on income from self-employment. The Social Security Administration relies on information from your filed tax return to calculate social security benefits. For your income to be reported to the Social Security Administration, you MUST file a tax return.
Copies of filed tax returns MUST be submitted to financial institutions, mortgage/brokers, etc. whenever you want to buy or refinance a home, get a loan for business, or apply for federal aid for higher education.

If I recently filed my income tax return and owe, but have NOT yet received a bill from the IRS, can I setup an Installment Agreement?

Yes. If you recently filed your income tax return and owe, but you have NOT yet received a bill from the IRS, call Sheppard Law Offices so we can setup an Installment Agreement on your current and even past years’ tax returns. To determine what information is needed to establish a pre-assessed Installment Agreement, our Ohio tax lawyer can help.

How do I setup an Installment Agreement (payment plan)?

If you would like to pay your tax debt through an Installment Agreement, call Sheppard Law Offices.

If you owe:

$25,000 or less in tax, we will negotiate directly with the IRS on your behalf to set up the agreement.
More than $25,000, we may still be able to setup an Installment Agreement for you, but we may also ask you for financial information that will help us determine your ability to pay.

Even if you setup an Installment Agreement, the IRS may still file a Notice of Federal Tax Lien to secure the government’s interest, until you make your final payment. Do not panic if the IRS files a Notice of Federal Tax Lien – it happens in many cases.

Note: The IRS cannot proceed with any collection actions affecting your property while your request for an Installment Agreement is being processed. Further, no collection efforts can be taken by the IRS while your agreement is in effect; or for thirty (30) days after the IRS rejects a request for an installment agreement; or for any period while an appeal is taken to challenge the rejection for an installment agreement.

What fees are associated with setting up an Installment Agreement?

The costs associated with an Installment Agreement are as follows:

There is a one-time set-up fee. Currently, it is $52 for direct deposit agreements and $105 for non-direct debit agreements. For eligible low-income individuals, the fee for entering new installment agreements remains $43. If you don’t meet the terms of the agreement throughout the life of the agreement, the IRS will charge an additional fee of $45, regardless of income level, to reinstate the agreement.

What is the best way to make timely installment payments?

If you arrange for an Installment Agreement, you can make payments with:

Personal or business checks, money orders, or certified funds (all made payable to the U.S. Treasury).
Payroll deductions. Your Employer may take the setup amount from your salary, and will regularly send the amount directly to the IRS.
Electronic transfers from your bank account, or other similar means.

What happens if I miss an installment payment?

Failure to make timely payments is grounds for default of your installment agreement. A default of your Installment Agreement may cause the filing of a Notice of Federal Tax Lien and/or an IRS Levy action. Either may have a negative effect on your credit standing and cause financial difficulties.

Will a Notice of Federal Tax Lien be filed on an Installment Agreement?

The IRS will generally file a Notice of Federal Tax Lien to secure the government’s interest against other creditors. A Notice of Federal Tax Lien attaches to your personal or real property until final payment is made. The notice filing may have a negative impact on your credit rating.

What are enforced collection actions in an installment agreement ?

Generally, IRS Enforced Collection Actions (levies against personal or real property) are not made while an Installment Agreement request is considered, or:

While an agreement is in effect,
For thirty (30) days after a request for an agreement has been rejected, and
For any period while a timely appeal of the rejection or termination is being evaluated by the IRS.

Can I combine other tax balances owed on my new Installment Agreement?

If you already have an Installment Agreement from a previous tax debt and your financial institution has changed, we may be able to modify or restructure your Installment Agreement to include additional amounts owed into one agreement.

Additionally, a Collection Information Statement may have to be completed to further illustrate your financial situation. If an Installment Agreement is modified, reinstated, or restructured, a $45 “User Fee” will be charged.

Will I still receive my tax refund, if I have already entered into an Installment Agreement?

As a condition of your Installment Agreement, any refund due to you in a future year, will be applied against the amount you owe. Therefore, you may not get all of your refund, if you owe certain past-due amounts, such as:

Federal Tax
State Tax
A Student Loan
Child Support

The IRS will automatically apply the refund to the taxes owed, and if the amount of the refund does not take care of the tax debt, then your Installment Agreement continues until all of the terms are met.

Contact an Ohio tax lawyer from Sheppard Law Offices to answer your questions about your specific IRS issue.