Common Tax Problem Questions

If an Offer in Compromise is accepted and paid will I get my tax refunds in the future?

The IRS will take your first refund and usually your second refund after your Offer in Compromise has been accepted. So - you are best off just paying the right amount of taxes and avoiding getting a refund in the first two years. And of course - you have to be compliant (filing and paying your taxes) for five years for the Offer to stick.

How long do I have to unlock a bank levy and get funds released to me?

Your bank will hold funds for 21 days before they release it to the IRS. Be careful to find out exactly the day you were levied so you know when to start counting the days.

Can I use my bank account if I have been levied?

If the IRS levies your bank account it is a one-time event. You should be free to use your account - going forward - and yes - that means you can deposit funds and they should be available to you. You can learn more about dealing with a bank levy at the blog: Bank Levies 101

Will I go to jail for owing taxes?

In most cases, you will NOT go to jail for owing the IRS. As long as you and/or your tax professional comply with what is requested by the IRS and come up with a plan for resolution you should avoid jail-time.

Will I go to jail for not filing taxes?

In most cases, you will NOT go to jail for not filing taxes - simply because you usually will have the opportunity to file your tax returns before the heat is on. However - the IRS does consider not-filing tax returns to be a potential felony.

When will my back taxes expire?

The IRS statute of limitations for taxes expiring is 10 years after they have been assessed. However - events like bankruptcies, Offer in Compromise and collection appeals stop the Statute of limitation's clocks from clicking and add to the time before they expire.

Will I have to meet with the IRS if WATAX represents me?

In almost all situations, you will NOT have to meet the IRS if you hire WATAX to represent you. However, if you are being audited by the IRS - we will ask that you supply us information in a quick fashion. Some IRS auditors get impatient and sometimes ask for a live meeting if we are slow in providing information.

On a IRS collections case, the same rules apply - if you provide information quickly - you won't have to meet them. But if you delay - the IRS sometimes will issue a "Summons" which often requires an appearance by the client.

Finally, if your business owes payroll taxes and you are a corporation or a LLC, you should expect to have a "Trust fund Interview" to determine if you are personally liable for the tax. This interview usually can be done over the phone with the IRS agent. The trust fund interview is fairly basic though and most corporate/LLC business owners are liable for the trust fund anyway.

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