Case #1: $1,200,000 IRS Liability Settled for Approximately $300,000 |
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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. |
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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. |
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Case #2: $125,000 Tax Bill Settled for $10,000 |
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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. |
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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. |
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Case #3: $475,000 Tax Bill Settled for $70,000 |
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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. |
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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.
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Case #4: Initially a Bankruptcy Case - Successful Offer in Compromise |
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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. |
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Process/Resolution
His tax liability was in excess of $106,000 and the case was settled for $8,050 in late 2009.
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Case #5: Business Owner Under Criminal Investigation Avoids Prosecution |
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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. |
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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. |
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Case #6: Physician Business Owner Ends 10 Year IRS Battle |
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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. |
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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. |
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Case #7: Expected Criminal Case Declined; $10,000 Due IRS |
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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. |
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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. |
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Case #8: State Offer in Compromise - Significant Discount |
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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. |
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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). |
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Case #9: IRS Offer in Compromise - Resolved! |
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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. |
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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. |
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Case #10: Corporate Payroll Tax Liability Successfully Resolved |
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Situation
Landscape company had a state payroll tax liability. Liability was approximately $100,000.
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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). |
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Case #11: Business Owner Avoids Prosecution Despite $200,000 Yearly Underreporting of Income |
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Situation
Our firm was aproached 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 analsysis 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. |
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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. |
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Case #12: 2010 Successful Offer in Compromise |
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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. |
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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. |
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Case #13: 2010 Successful Offer in Compromise |
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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. |
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Process/Resolution
The Offer was accepted in May, 2010.
The client paid the settlement immediately and in full. |
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