Success Stories

Up to 30 Months of Incarceration Reduced to Just Probation

Chicago, IL
January 2017

Situation

Client was indicted in U.S. District Court, Northern District of Illinois (Chicago) for filing false and fraudulent tax returns. She had fraudulently obtained $600,000 in refunds. Plea agreement was executed in late 2016. Sentencing guideline range was 24 – 30 months.

Resolution

On January 17, 2017 client was sentenced to three (3) years of probation. No incarceration.


$130,000 Tax Bill Settled for $3,500

Situation

As a result of failing to properly account for and make estimated tax payments to the IRS for several years, the taxpayer’s liability with the IRS swelled to over $ 130,000. The liability became unmanageable due to the taxpayer’s financial difficulties following his divorce.

Resolution

Through the IRS’s Offer in Compromise Program, the taxpayer’s total liability of more than $ 130,000 was settled with the IRS for $ 3,500.


$ 1.2 Million Tax Bill Settled for $ 75,000

Situation

As a result of criminal charges for failing to file his tax returns for three years, the IRS assessed tax, penalties, and interest in an amount exceeding $ 541,000. In addition, the IRS also assessed civil fraud penalties against the taxpayer for those same years in an amount exceeding $ 250,000. Lastly, the taxpayer failed to pay his tax liabilities for an additional four years which amounted to an additional liability of more than $ 415,000.

Process/Resolution

Through the IRS’s Offer in Compromise Program, the taxpayer’s total liability of more than $ 1.2 million was settled with the IRS for $ 75,000.


Client's Lawsuit Settlement Classified as Nontaxable

Canton, OH
July 2015

Situation

Taxpayer won a civil lawsuit against her former employer for over $425,000. The IRS claimed this amount was taxable and they attempted to assess more than $250,000 in taxes.

Process/Resolution

We worked with client to prepare and defend her tax return. In filing the return, we found an exception that allowed all of the $425,000 damages to be exempt from income tax. Successfully classified the income as nontaxable and defeated IRS in their attempts to assess more than $250,000 in tax. Client paid zero taxes on the $425,000 of damages.


Successfully Negotiated Offer in Compromise

Cleveland, OH
March 2016

Situation

Taxpayer owed over $300,000 in personal income tax. The IRS wanted the taxpayer to pay the full amount in a payment plan over several years.

Process/Resolution

We took the case away from collections by filing an offer in compromise to settle the debt for a lesser amount. Our firm settled the debt in an offer in compromise for $12,000.


$85,000 Tax Bill Settled for $ 9,000

Situation

After the IRS examined the taxpayer’s returns for three years, the IRS assessed additional tax, penalties, and interest in an amount exceeding $ 63,000. The taxpayer also filed a return with an additional $ 18,000 in tax due. After penalties and interest were calculated, the taxpayers total liability with the IRS was over $ 85,000.

Resolution

Through the IRS’s Offer in Compromise Program, the taxpayer’s total liability of $ 85,000 was settled with the IRS for $ 9,000.


Correcting IRS Mistake Saves Taxpayer $ 1,200,000

Situation

After the IRS examined the taxpayer’s returns in the early 2000’s, the IRS assessed additional tax, penalties, and interest in an amount exceeding $ 1,200,000. The taxpayer took steps to resolve this tax liability by attempting to settle for $ 50,000. However, the IRS rejected his settlement offer and the taxpayer was unable to pay the tax liability.

In general, the IRS has 10 years to collect any tax debt after it has been assessed. However, there are a few instances in which the time for collection can be extended by the IRS. In late 2013, the IRS began attempting to collect on his tax liability again. The IRS contended that it could collect from the taxpayer until 2018 because the settlement offer extended the time for the IRS to collect. However, the IRS did not correctly calculate this extension of time. Our office, working with the Taxpayer Advocate Service, argued to the IRS that the time to collect had already expired and therefore, the taxpayer no longer had a tax liability.

Process/Resolution

The IRS accepted our argument that the time for collection had expired and wrote off the taxpayer’s balance. As a result, the taxpayer did not have to pay any portion of the $ 1,256,228.94 that the IRS contended he owed.


Client's Unfiled Tax Returns

Situation

The client had unfiled tax returns as far back as 1997. They owed over $40,000 of tax, penalty and interest to IRS.

Process/Resolution

Our firm completed and filed all past due returns. We settled the tax due for $3000 through Offer in Compromise Program.


$1,200,000 IRS Liability Settled for Approximately $300,000

Situation

The taxpayer is a physician who had accumulated liabilities with the IRS and other taxing authorities over a period of about fifteen (15) years. Our office reviewed the issues outstanding, made some strategic planning decisions, and ultimately filed bankruptcy under Chapter 7 of the U.S. Bankruptcy Code.

Our office, on behalf of the taxpayer, brought suit against the Internal Revenue Service in bankruptcy seeking to discharge most of the tax liabilities at issue.

Process/Resolution

The taxpayer received a discharge of his debts through the Chapter 7 filing. We ultimately negotiated a settlement with the Internal Revenue Service wherein approximately $900,000 of the IRS liability was discharged and the remaining sum due is being paid interest free through a payment plan.

On behalf of the taxpayer we were also able to amend several years' of the tax returns at issue and bring to the client an additional $100,000 in tax savings.


$125,000 Tax Bill Settled for $10,000

Situation

The taxpayer was a small business owner. Her income and expense records for several tax years were destroyed. Shortly thereafter, she received notice that the IRS planned to audit her records for the same years. The taxpayer had no records to substantiate her business expenses and as a result, all expenses were disallowed. She received a bill from the IRS in excess of $125,000.

Prior to arriving at our office, the taxpayer met with another tax professional who told her she had no choice but to pay the bill in full.

Process/Resolution

Our office met with the taxpayer to discuss her options. Based on her income, assets & liabilities, our office determined that she was a good candidate for the IRS' Offer-in-Compromise Program. After approximately 7 months of careful planning and negotiations, our office was able to settle the tax debt for $10,000.

The OIC program was developed by the IRS in order to assist taxpayers who will not be able to pay the full amount of their tax liabilities within the requisite time frame. Both Individuals and businesses may qualify for this program. Our office will review monthly income and expenses as well as the value of your equity in assets to determine if you are a good candidate for the program. Not all taxpayers qualify, and beware of tax resolution services that make promises to the contrary! But for the select group of taxpayers who do qualify, the savings can be substantial.


$475,000 Tax Bill Settled for $70,000

Situation

Taxpayer is a medium size business that had not filed or paid payroll taxes for three (3) or four (4) years. Its total IRS liability was approximately $475,000, with a substantial sum of interest and penalties accumulating daily.

The taxpayer was concerned about staying in business, resolving its problems with the Internal Revenue Service, and avoiding criminal prosecution for its actions.

Process/Resolution

We immediately acted to get the taxpayer in compliance with its payroll obligations. All past due payroll tax returns were filed and the taxpayer began to make payroll deposits on its current payroll obligations. We then reviewed which options best suited the client. The options included bankruptcy reorganization, liquidating the business, paying the liability in full, or filing an offer in compromise.

Once we were able to keep the client "current" for six (6) months, and based on its income, assets & liabilities, we determined that the company was a good candidate for the IRS' Offer-in-Compromise Program. After approximately twelve (12) months of careful planning and negotiations, our office was able to settle the tax debt for $70,000.


Initially a Bankruptcy Case - Successful Offer in Compromise

Situation

Client was in the midst of a chapter 13 bankruptcy in 2008 wherein he was spinning his wheels on a five year payment plan with the IRS and his other creditors. He retained our firm and immediately we advised him to convert his case to chapter 7.

Thereafter, we filed an offer in compromise with the IRS.

Process/Resolution

His tax liability was in excess of $106,000 and the case was settled for $8,050 in late 2009.


Business Owner Under Criminal Investigation Avoids Prosecution

Situation

Taxpayer-Business Owner had failed to file payroll tax returns or pay any payroll taxes for approximately an eight (8) year period. Robert J. Fedor, Esq., LLC was consulted and developed a strategy to work with IRS criminal investigation and also work toward bringing the taxpayer into compliance.

All of the outstanding payroll tax returns were filed immediately. We retained a payroll service company to begin withholding and impounding deposits.

Process/Resolution

After months of negotiations, we were able to convince the Internal Revenue Service Criminal Investigation Division that this particular taxpayer would not make a good criminal prosecution candidate.

The business was ultimately sold prior to any tax liabilities being assessed against the corporation. To this day (2009), the taxpayer himself does not owe the IRS anything. The taxpayer now collects a regular check from the sale of the business and remains in possession of his retirement income.


Physician Business Owner Ends 10 Year IRS Battle

Situation

In the early 1990's, a physician/business owner had deducted several hundred thousand dollars on his tax return related to farming and other business expenses. The IRS conducted and audit and determined that the taxpayer owed several hundred thousand dollars in additional tax, penalties and interest.

The taxpayer sought legal representation and tried the case before the United States Tax Court. After spending tens of thousands of dollars in legal fees, the Tax Court held in favor of the IRS.

Process/Resolution

A year later he sought out Robert J. Fedor, Esq., LLC as possible counsel. We analyzed the case and determined that a chapter 11 plan of reorganization (bankruptcy filing) could eliminate ninety percent (90%) of the tax liabilities and the remaining ten percent (10%) could be paid through a plan over a five (5) year period.

The case was a success because our office took the time to analyze the case properly, examine the options available to the client and, ultimately, help the client decide what the best course of action would be.


Expected Criminal Case Declined; $10,000 Due IRS

Situation

We were engaged by a business and individual in Houston, Texas, whom had never filed a tax return, despite making approximately $450,000 per year for the last several years. The case was in the process of being referred to the criminal investigation division of the IRS.

We met with the IRS and convinced the assigned agents that the subject case was not worth pursuing on a criminal level. We agreed to file all outstanding tax returns due and to pay the liabilities due, including penalties and interest.

Process/Resolution

Originally, the IRS proposed a liability of approximately $500,000, excluding interest and penalties, because we had no documentation for any of the company's expenses. However, we persuaded the IRS Agents to extrapolate expenses/deductions from prior year returns and use approximately the same deductions for the years' outstanding.

After all of the tax returns were filed and processed, the IRS accepted the returns as prepared. There was a balance due of approximately $10,000, all of which has been recently paid.


State Offer in Compromise - Significant Discount

Situation

State tax liability was $435,100.53, composed of prior years' withholding tax, sales tax and income tax.

We approached the State Offer group, which we are in constant contact with and have a great working relationship with and provided the State with an analysis of the client's income and expenses, as well as, equity in assets.

Process/Resolution

We settled the matter for approximately $36,000.

We also negotiated a 36-month no-interest payment plan (AGO typically only allows a payment plan up to 24 months).


IRS Offer in Compromise Resolved

Situation

Income tax liability was in excess of $72,000.

Our firm analyzed the client's income and expenses, as well as, equity in assets and approached the IRS with an Offer in Compromise.

Process/Resolution

We worked with the IRS and the Offer Specialist and ultimately resolved the entire matter.

Our firm resolved the case for $1,584.


Corporate Payroll Tax Liability Successfully Resolved

Situation

Landscape company had a state payroll tax liability. Liability was approximately $100,000.

Process/Resolution

Our firm settled for $28,946.

We also negotiated a 40-month no-interest payment plan (AGO typically only allows a payment plan up to 24 months).


Business Owner Avoids Prosecution Despite $200,000 Yearly Underreporting of Income

Situation

Our firm was approached by an accounting firm with a difficult case; a business owner and his company under IRS examination. False returns were prepared and previously filed. Our preliminary analysis revealed that at least $200,000 of income per year over a period of several years was not reported to the IRS.

We reviewed what defenses the client has available, prior accounting work which was substandard and went through the examination. The term for this is an "Egg Shell Audit" for obvious reasons.

Process/Resolution

We were successful in convincing the IRS that the issues outstanding did not rise to the level of a criminal investigation referral. While there may be significant tax due, it was our position that the client did not hold the requisite intent to criminally investigate the case.

The examination was completed in 2009. The client, due to current year net operating losses, will be able to take advantage of net operating loss carrybacks and eliminate most, if not all, of his tax liabilities. He will also, of course, not be prosecuted.


2010 Successful Offer in Compromise

Situation

The taxpayer was an insurance salesperson who had federal income tax liabilities spanning over a period of ten (10) years.

The taxpayer's liability was approximately $62,000.

Process/Resolution

Our firm negotiated a settlement with the IRS through the Offer in Compromise program.

The taxpayer's liability was resolved for $4,000.


2010 Successful Offer in Compromise

Situation

Insurance Agency Owner was referred to our firm in 2009 with an IRS liability of approximately $55,000. We met with the client and developed a plan to get the client in compliance with the IRS, including beginning to pay estimated taxes and timely filing returns.

Once in compliance, our office submitted and Offer in Compromise to the IRS. We offered to pay the IRS $1,500 in full and final settlement of the liabilities.

Process/Resolution

The Offer was accepted in May, 2010.

The client paid the settlement immediately and in full.


2011 Successful Offer in Compromise

Business owner was prosecuted for failure to withhold and pay over payroll taxes to the IRS for a period of several years. Owner was separately convicted of bank fraud and served three years in prison. Our firm submitted an Offer in late 2010, offering the sum of $20,000 in full settlement of a liability to the IRS in the amount of $3,200,000.

The $20,000 offer amount was accepted and immediately paid in 2011.


Criminal Investigation Dismissed Against Business Owner

Chicago business owner hired our firm in February, 2009 after being contacted by IRS criminal investigators. We represented business owner in all facets of the investigation. In September, 2011 criminal investigation was dismissed and the matter was referred by to the IRS civil division.


Potential Bankruptcy Case - Successful Commercial Lease Negotiation

Situation:

Business client was facing a significant increase in monthly lease payments. The client was prepared to throw in the towel after former counsel was unsuccessful in negotiating an amendment to the lease agreement. Client initially consulted with our firm to discuss filing a Chapter 7 bankruptcy. This would have resulted in total liquidation of the business assets and the loss of over 100 jobs.

Process/Resolution:

Our office immediately began negotiating with the landlord, using the possibility of a bankruptcy filing as leverage. The landlord agreed to a three-year reduction in lease payments and CAM expenses. The client was able to avoid bankruptcy, save over 100 jobs and used the amended lease agreement to refinance and consolidate outstanding debt.


Business Closed by State Reopened

Situation:

Business clients had been shut down by the state's Department of Revenue due to delinquent sales tax liabilities. Clients faced potential criminal prosecution if they attempted to operate their business despite the notice of closure. Department of Revenue refused to re-open business unless balance was paid in full.

Process/Resolution:

Our office identified one major source of problems as the accountant. On our firm's advice, our client immediately hired a payroll company to file and pay the required taxes moving forward. Our office then completed an Offer in Compromise application and negotiated a resolution to our client's delinquent sales tax liabilities. The state agreed to initially accept less than 1/3 of the total tax due and agreed to a payment plan over a period of 24 months. The business was re-opened within one week of hiring our firm.


$640,000 Sales Tax Liability Settled for Approximately $545,000

Situation:

The taxpayer underwent a sales tax audit that put its liquor license and business in jeopardy. The taxpayer's liability was approximately $640,000.

Process/Resolution:

Our firm was retained after completion of the audit an after the deadline for appealing any audit findings. Despite this, our firm negotiated a discount of the penalties and interest on the tax liability for a total savings of approximately $95,000 to our client. The client's liquor license was reinstated and our client was able to continue to operate.


Successful Criminal Tax Violation

Situation

The financial professional was charged with criminal tax violation, a felony.

Process/Resolution

We successfully negotiated the felony down to a misdemeanor charge and disputed a possible prison sentence. The client received 8 months of home confinement with work privileges.


Successful Offer In Compromise

Situation

Client had an original tax liability of $110,000. Our firm analyzed the client's income and expenses and approached the IRS with an Offer In Compromise.

Process/Resolution

We worked with the IRS and successfully resolved this matter for $5,000


Successful Offer In Compromise

Situation

Client had an original tax liability of $68,000. Our firm analyzed the client's income and expenses and approached the IRS with an Offer In Compromise.

Process/Resolution

We worked with the IRS and successfully resolved this matter for $4,500


Successful Offer In Compromise

Situation

Client had an original tax liability of $90,000. Our firm analyzed the client's income and expenses and approached the IRS with an Offer In Compromise.

Process/Resolution

We worked with the IRS and successfully resolved this matter for $3,500