REAL WORLD PROOF
Real Tax Solutions : CLIENT CASE STUDIES
Taxpayer Saved His Business
with Robinett &Associates (R&A)
Problem:
The taxpayer lost a successful business due to the economic impact of the Great Recession of 2008. He sold his home and used the proceeds to start a new business in hopes of returning to financial stability. The IRS hit the new business with an audit and assessed over $750,000 in excise taxes and penalties.
Consequences:
The IRS threatened to levy bank accounts and seize assets. The agency wanted to close the new business claiming that the taxpayer could not pay the tax due and should be prevented from incurring further excise tax debt in the future. The taxpayer’s business could not pay the assessed amount, and the taxpayer could lose his livelihood, including the capital contributed from the sale of his home, unless a resolution could be reached.
“I didn’t know what to do. I felt helpless and hopeless,” said the taxpayer. “The auditor showed up without notice, asked for documents and left without much to say. Then, I got a collection notice from the IRS. Before I could figure out the notice, a Revenue Officer showed up to assess the Trust Fund Recovery Penalty (TFRP) on top of the other tax due. I knew I was in big trouble with no way to defend myself.”
Choosing R&A:
The taxpayer learned about R&A from a letter Denise routinely sends to taxpayers letting them know that help is available for tough tax problems. He decided to call the moment the letter landed on his desk. “I spoke with Denise for about thirty minutes and felt a sense of relief. She wasn’t surprised by my problems or concerned about the amount of the assessment. She never promised me that she would get rid of the tax, but explained that we would work for the best solution possible,” he said. “I needed to understand the risks and the reality of the process. She made that clear for me.”
Results:
R&A began by helping the taxpayer maintain full compliance in all tax filing by working with IRS to make sure the tax record at the agency was complete and accurate. R&A helped the taxpayer set-up a point-of-sale tax collection procedure for accuracy and the timely remittance of tax going forward. Denise lowered the tax liability by correcting many excise tax returns which the IRS had filed for the taxpayer as part of the audit. Then, Denise and her team prepared business and personal financial statements to show the IRS that the business could not pay the assessed tax out of earnings and that seizing the assets would cause financial hardship for the taxpayer’s family. The IRS settled for a partial pay installment agreement allowing the taxpayer to pay a workable amount each month until the statute closed. The IRS collected a portion of the tax assessed and the taxpayer kept his business and with it, the financial security to support his family.
“I’ll always be grateful for their professionalism and solid help,” the taxpayer added. “The IRS process was everything but professional. Thankfully I’m in a better place now and I could not have made it here without Denise.”
Taxpayers Chose R&A and Avoided
the Trust Fund Recovery Penalty
Problem:
The taxpayers’ home construction business was severely impacted by the COVID-19 pandemic. Sales of new homes fell off quickly and collecting payments from customers became more and more difficult. Since work continued to finish the homes in progress, payroll costs were on-going but the funds for payroll tax deposits dwindled. The IRS sent a Revenue Officer (RO) to collect past due payroll taxes after placing liens on business property and cleaning out the bank account several times. The taxpayers’ business was crippled from COVID-19 and IRS enforcement.
Consequences:
The taxpayers could not borrow funds to pay IRS debt because of liens, and the RO intended to assess the Trust Fund Recovery Penalty (TFRP), a penalty of 100% of the trust fund taxes due, against the officers of the company. Without quick resolution the company would have been forced into bankruptcy and the taxpayers would suffer severe financial hardship as they relied on the business for income.
“When I tried to contact the RO, I found that he was missing in action,” said the taxpayer. “The IRS office, listed on the contact information he gave me, said he had moved. Meanwhile the notices and levies were still coming. I had no one at the agency to talk to about the problem. I called the IRS phone number on the notices we received, and they couldn’t talk to me because a RO had been assigned to our case. The feelings of helplessness and frustration were overwhelming. I was angry that as taxpayers, we had no way to stand up for ourselves.”
Choosing R&A:
The taxpayer learned about R&A from a letter Denise routinely sends to taxpayers letting them know that help is available for tough tax problems. She searched the web for other firms and chose Denise after comparing tax resolution services. “After my experience with the disappearing RO, the last thing I wanted was to be lost in a sea of clients. I liked that Denise has lots of experience handling tough cases, but she isn’t part of a huge firm.”
Results:
Denise tracked down the missing RO and secured extra time for the taxpayers to address the collection issues because the IRS had been unresponsive and neglectful in this case. R&A ensured the taxpayer maintained full compliance in all tax filing by working with the IRS to make sure the tax record at the agency was complete and accurate. The agency had assessed incorrect payroll tax for missing quarterly returns when the taxpayer had proof of filing them. Denise sent the returns and proof of filing to the RO and this lowered the tax and penalty liability. Because the company had good credit, except for tax problems, Denise asked the RO to remove the liens so that the company could borrow the funds to pay off the trust fund portion of the tax and thus avoid the assessment of the TFRP. The taxpayers borrowed the funds and Denise provided payment instructions so that the trust fund portion was paid in a timely manner according to the agreement. The IRS approved an installment agreement for the remaining tax allowing the company to continue operating. Later, payroll returns were amended for the application of the Employee Retention Credit and the remaining tax was paid.
“I’m so appreciative. R&A allowed me to spread their fee over 12 months which was so helpful to us after this COVID nightmare,” the taxpayer said. “Denise recommended we setup a business savings account with the extra funds we received from the Retention Credit. We will use this account to smooth out cash flow problems in the future and hopefully never miss a payroll tax deposit again. She saved us thousands of dollars, lots of time, and helped us get back to normal.”
R&A Secured Installment Agreement
after Taxpayer Gave Up
Problem:
The taxpayer failed to file tax returns for two years while enduring a family hardship. He owned a small business which required he pay self-employment tax on top of income tax. The IRS filed substitute returns for the unfiled years, assessed tax, and sent him a bill of $150,000. The taxpayer contacted the agency immediately and was told to apply for an installment agreement by sending in an IRS collection form with supporting documents. The IRS representative said the agency would review the financial information and determine the amount he should pay each month. The taxpayer completed the form and mailed it to the IRS several times. This back and forth with the agency continued for years while the IRS placed a lien on his home and randomly levied his bank accounts using the bank information he provided on the collection forms. No installment agreement was ever approved nor did the taxpayer hear back about his application.
Consequences:
The taxpayer could not pay the tax and was unable to secure an installment agreement to make tax payments over time. He felt the substitute returns filed by IRS must be grossly incorrect to assess so much tax. He could not borrow against his home because of the lien, and the bank levies made it impossible to take care of his family and make the current year required estimated tax payments. Without making the estimated tax payments, he continued to add to the debt when he filed his current year return. He was in a tax debt spiral.
Choosing R&A:
The taxpayer was referred to R&A by a former client who had contacted Denise when the IRS would not release a tax refund. Denise solved the problem after the former client had spent years trying to get her money back from the agency. “I heard great things about Denise,” the taxpayer said. “My colleague said that if she could straighten out the 3-year refund hold, she could certainly fix the 3-year installment agreement debacle.”
Results:
R&A ensured the taxpayer maintained full compliance in all tax filing by working with the IRS to make sure the tax record at the agency was complete and accurate. Denise prepared and submitted returns to replace the IRS substitute returns and the tax liability was lowered significantly. Next, R&A prepared personal financial statements and submitted the proper forms and documents to the IRS for an installment agreement. Because of the agency track record in this case, Denise followed-up routinely and discovered that the IRS continued to lose the paperwork even when the agency signed for the documents via certified mail. Denise filed for a Collection Due Process hearing and met with IRS appeals on behalf of the taxpayer. The installment agreement was granted by the appeals officer after reviewing the taxpayer’s record and the IRS process.
“My experience with the IRS was just unbelievable,” the taxpayer said. “Denise reminded me often that I had rights and that the IRS had to honor those rights. She secured a manageable path forward for me after I had given up. I’m paying off old debt and I’m making estimated tax payments to stay on track. I’m sleeping again. Denise stopped the tax debt spiral.”
Taxpayer Saved $10,000 in
529 Plan Audit with R&A
Problem:
The taxpayers, married filing jointly, received a $10,000 IRS collection notice for omitting 529 plan distributions from their income. The taxpayers took 529 plan distributions to pay for their children’s college expenses. The taxpayers called the IRS and were told to send in receipts to prove education expenses. The taxpayers complied and the IRS responded to the taxpayers’ evidence with a revised assessment of $10,500.
Consequences:
The taxpayers were assessed incorrectly since the funds taken from the 529 plans were used for qualified educational expenses and as such, were not required to be included in income. The taxpayers’ rebuttal of this incorrect assessment only increased the tax due. The IRS sent collection notices warning of enforcement action for non-payment. The taxpayers faced the threat of levies, the accumulation of interest and penalties, and the possibility of a full tax return audit.
“We didn’t have $10,500 to give to the IRS for an error they made. We couldn’t make them understand how we used the distributions. We called the IRS several times. We sent copies of receipts. We wrote letters to the IRS. Our broker wrote a letter to the IRS explaining how 529 plans work. We received IRS letters back saying they had our information; but soon after, we received notices saying we owed 10k and had better pay up,” the taxpayer said. “We were going in circles, getting nowhere, and growing angrier by the day.”
Choosing R&A:
During one of the tedious, frustrating phone calls with IRS, the taxpayers asked the representative how to resolve this problem since they had done everything possible. The representative recommended they contact an Enrolled Agent. Following this advice, the taxpayers conducted a web search and selected Denise. “She had years of experience in solving tax problems and filing tax returns plus the client reviews were solid.”
Results:
Denise called the IRS and spoke with the compliance unit. She obtained copies of the original notice, the data the IRS had from the taxpayers, and the information logged into the IRS computer each time the taxpayers called or wrote letters about the problem. After reviewing all the IRS data, including the tax return where the issue originated, the 1099-Q Forms and the educational receipts, Denise prepared a statement showing all distributions and the corresponding expenses proving that the funds were used for education. She prepared a packet of supporting information, including proof of each dependent’s enrollment in college. Lastly, Denise gave the taxpayers a list of expense receipts to keep ready in case the IRS hit them with another 529 plan audit.
Once the IRS processed the data, the assessment was removed and the taxpayers were informed that their case was closed with no tax due.
“After going through this nightmare, I now understand that nothing is easy for taxpayers at the IRS even when you are right and they are wrong. They don’t seem to understand the tax code even though they are supposed to work for us,” the taxpayers said. “Thankfully Denise understood us, and she speaks IRS.”
R&A Helped Taxpayer Settle
$1.6M tax debt for $85,000
Problem:
The taxpayers’ business was hit with a multi-year sales tax audit and assessed $1,600,000 in back tax. The business founder had just passed away and the other officer was seriously ill during the field audit. Leadership passed to the corporate secretary, and he was unable to manage operations and the audit. The result was a huge assessment at a time of corporate instability. The business could not pay this tax and could not challenge the accuracy of the audit in a timely manner.
Consequences:
In response to the company’s inability to pay the assessed tax, the state levied the business bank accounts pulling out the cash randomly over several months. The continuing levies caused problems with making payroll tax deposits and paying current sales tax furthering the company’s descent into insolvency and causing more trouble with tax agencies. Without intervention, the business would have to close or file bankruptcy.
“We could never pay this. It was an unfair audit, and we didn’t respond within the timeframe for protesting the outcome. After that, we had one problem after another. It was like the sales tax auditor arrived with our death certificate,” said the corporate secretary.
Choosing R&A:
The taxpayers learned about R&A from a letter Denise routinely sends to taxpayers letting them know that help is available for tough tax problems. “I called the state agency asking for relief and they told me to get help and get it fast,” said the corporate secretary. “They were straightforward in explaining that we could not do this on our own because our options were so limited, we owed too much, and we were behind in current sales tax payments.” The secretary called Denise that afternoon and conducted a short interview. Then he interviewed several other tax resolution firms.
“I chose R&A because Denise spelled out the way we would on-board with the firm and how we would collaborate through the case. I felt their method was professional and efficient. R&A had the resources to file returns and prepare financial statements. Since we didn’t have time to engage another accounting firm to augment their work, this full-service approach was important to us.”
Results:
Denise called the state agency to gather the data from the audit and the assessment and to establish contact with the agent assigned to the case. Because she had reviewed the company’s financial statements and Point of Sale reports, she explained to the agent that there were problems with the sales tax audit even though the time had passed for challenging it. The agent explained that the company had other problems like unfiled income tax returns, missing employment tax returns and a couple of missing sales tax returns.
R&A worked quickly to file these returns and compile accurate financial statements. After correcting the taxpayer’s account at the agency and engaging in several discussions with the agent, R&A submitted an Offer in Compromise asking for the tax to be reduced due to problems with the field audit, the company’s inability to pay the entire amount and the probability that the company would close if the state continued to levy the bank accounts. Financial statements with supporting information were submitted in support of the offer. The agency approved the offer and accepted a reduced tax liability to be paid by installment agreement.
“We were thankful to Denise and her team and relieved that we could get back on track. We followed her advice and purchased key-man insurance for our officers so that a devastating death would not leave the company strapped for cash or without resources in an emergency like this. We made a mistake in not challenging the audit, but we scored big in choosing R&A.”
Taxpayer Avoided Multi-Year
IRS Audits and TFRP with R&A
Problem:
The IRS assessed tax and penalties against the taxpayer after his office manager filed payroll tax returns for two years and failed to remit payroll taxes. The office manager filed all returns on time and processed payroll although she did not sign checks or determine pay for employees. Since the taxpayer did not respond to IRS collection notices, the agency assigned a Revenue Officer (RO) to collect the tax and assess the Trust Fund Recovery Penalty (TFRP). The RO attributed the failure to pay tax to the taxpayer’s disregard for the law through negligence.
Consequence:
The IRS filed liens against the taxpayer’s property, levied bank accounts and threatened to close the business by seizing business assets to pay the tax due. The RO also threatened to refer the client to examinations to conduct audits for the years in which the taxpayer relied on the office manager to file business income tax returns. The taxpayer faced large penalties, audits which could increase the tax due, a hostile RO, and insolvency from bank levies. The taxpayer could be assessed the TFRP due to negligence in remitting trust fund taxes. The taxpayer’s reputation at the IRS was one of a non-compliant business owner who deserved to be punished for his blatant disregard for the law.
Choosing R&A:
The taxpayer was referred to Denise by his CPA. “My CPA warned me not to let the office manager run the company,” the taxpayer said. “But I trusted her. As a manager she was organized and always took care of things. The customers liked her. I was busy finding new customers and didn’t pay attention to the day-to-day stuff. When my CPA recommended Denise, I knew I had to listen for a change. I was in a terrible situation because the RO was a complete jerk to me. How can you solve a problem or make things right when you can’t communicate?”
Results:
The taxpayer had filed and paid all other taxes to the IRS in a timely manner and had been a compliant taxpayer for most of his life. The taxpayer had made a costly mistake in allowing the office manager free-range over his business and this error had changed the taxpayer’s standing at the IRS.
Denise spoke at length with the RO assuring him that the taxpayer was dedicated to righting this situation and that although he was ultimately responsible for the business, he had not known about the failure to remit the taxes. The office manager had kept the IRS collection notices from him, but he was prepared to return to full compliance and to take action to prevent future problems. With this assurance the RO stopped the bank levies.
R&A set to work on a plan developed to address the concerns of the RO. First, the office manager was terminated and the payroll outsourced to a reputable company so that all payroll tax deposits were electronically submitted on time. R&A ensured the taxpayer maintained full compliance in all tax filing by working with the IRS to make sure the tax record at the agency was complete and accurate. Next, Denise reviewed the business tax returns the RO had determined should be referred to examination. The returns were amended by an in-house licensed tax professional. Then, Denise asked the RO to remove the liens so that the company could borrow funds to pay the payroll taxes. R&A submitted financial statements and a letter from a lender agreeing to supply the funds if the IRS liens were removed. The RO determined the pay-off and removed the liens. The company remitted the full amount due to the RO and the TFRP was not assessed against the taxpayer.
“My tax problem almost cost me a lifetime of work. I had to take control of my company and I had to change the way we did a lot of things. It was a stressful time dealing with an irate RO, digging up old paperwork for amendments, applying for loans, watching the cash snatched out of the bank account, feeling disappointed and betrayed by a trusted employee, and facing a $75,000 penalty for not remitting the taxes. I thought about throwing in the towel, but Denise kept me moving through the process, reassuring me that we would arrive at a workable solution and that I could transform my business. She was there with me step-by-step and I’m grateful.”
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I’m EXTREMELY happy with REALTAXSOLUTION.NET’s service. They helped me get to compliance again with the IRS. Working with Denise Robinett gave some peace of mind and if I had to do it again, I would choose this company.
I cannot praise DENISE ROBINETT enough for resolving my IRS audit. There was another company I went to first that had a slick radio advertisement that took my money and did ABSOLUTELY nothing. I googled to find a better solution – and lucked out when I found Denise and REAL TAX SOLUTIONS. She methodically worked with me and got everything taken care of. She also told me things to change so I don’t get another audit. Thumbs up!
Denise Robinett is OUTSTANDING! Denise was originally recommended to me by my CPA, and she represented and assisted me with an IRS audit. She helped make the BEST of -let's face it- a horribly annoying situation. Pleasant and professional to work with, as well. If I ever get audited again? Denise is my first pick to help! THANK YOU Denise!