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In: CNC Tax Law

Resolution of a debt to the IRS can be accomplished by different methods; the obvious one is full payment. If one cannot full pay or believes the debt is bogus, other means are available. Installment Agreements may be negotiated. Abatements are possible if reasonable cause can be established. Filing corrected returns may be an option. Jerry, Hillhurst Tax Group, clarifies,  “The Offer-in-Compromise, which is typically preferred, is available if one qualifies. However, if you cannot pay or qualify for another similar program; the temporary hardship or “Currently Not Collectable” (CNC) may be an intermediate resolution. It is likely not a “final” resolution. This along with several other steps will take a huge burden off of you and offer you peace of mind.”

If you owe the IRS a large sum of money but do not have the ability to make payments on the debt right now, you might qualify for a hardship. The CNC program is not new, but qualification for it is very tough. Getting your account placed in hardship is not guaranteed to be permanent. In fact, it likely will only last 18-24 months. However, it might give you time to get back on your feet so that you can make payments later. In rare cases, a hardship may remain until the taxes expire, but don’t count on it!

In order to qualify for suspension of collection activity on your account by IRS, you must have at least the last 6 years tax returns filed. You must also be in current tax compliance. This means that you must have correct tax withholding at your job or be making proper Estimated Tax Payments if self-employed. In addition, you must be able to prove that your necessary living expenses meet or exceed your current income. Furthermore, you must not have any substantial “liquid assets.” Liquid assets are things like bank accounts with large cash balances, money market funds, stocks, CDs, or un-borrowed funds in cash value in life insurance etc.

You will be required to provide 3-6 months documentation on proof of income and expenses (bills). If you have medical expenses, get proof of them as well. You may be required to provide car note information as well as rent or mortgage proof. Cable TV, cell phone, country club or health club dues, and credit cards will not be factored in when calculating your qualifications for CNC. These items are considered unnecessary by IRS. Under the law, IRS is a senior creditor to most debts.

If your account is placed in a hardship CNC, you still owe the taxes, they continue to accrue interest, refunds will be kept, and a Federal Tax Lien may be filed. You will not be required to make individual payments while the case is in CNC. No bank levy or wage levy will occur while in CNC. However, unless the Statute of Limitations blows, the tax will go back to IRS Collections at some point.

Should your IRS debt exceed $25,000, please get professional help. A good CPA, Enrolled Agent or Tax Attorney can help you deal with IRS. The fees you pay will be well spent if you hire a competent and experienced professional. If you cannot afford professional help, the IRS has free help in the form of the Appeals Office and the Taxpayer Advocate Service. If you feel that you are not being treated fairly, you can file an administrative appeal or a Form 911 with the Advocate.… Read the rest

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In: Wills and Trusts

The law becomes involved when it is time to decide if a conservator is a necessary measure. A conservator is a person appointed by court to make healthcare and financial decisions for another person when he or she is unable to make them on his or her own due to an illness, injury or disability. This process can get a little more complicated than appointing a guardian, whom is only responsible for healthcare and other decisions not involving finances. All of these decisions are based off of the medical condition(s) of the person needing help.

 

Erin with Stone & Sallus Law emphasizes, “In most cases seeking a conservator, the medical condition of an individual is commonly a serious, biological brain disorder.” Examples of these illnesses would be manic/clinical depression, obsessive compulsive disorder, schizophrenia, dementia or Alzheimer’s. The individual must be deemed unable to make these decisions for him or her self due to mental state. The process begins with taking the individual to a psychiatrist to decipher whether or not they are gravely disabled. If the individual refuses to test, there are ways to set up an involuntary exam to get them the help they need. Once the conclusion is reached that a conservator may be a necessity, it is passed on to court. 

 

Erin adds, “The court’s first choice for a conservator would be an immediate family member. However, if the individual needing help doesn’t have immediate family willing or available to serve, a friend or specially trained attorney can be appointed. During the trial, anyone may object the person potentially being appointed for the conservatorship in general. Whomever is aiming to be appointed has the right to an attorney- if they choose to have one, will be asked questions by him or her in front of the judge.” If an attorney is not hired, they can simply explain why they feel they are qualified to be conservator.

 

If it is decided upon that the individual is incapacitated and the person willing to be conservator is appointed, the appointee is usually required to post a bond. This bond is to protect the ill individual’s asset’s from being mishandled. Once it is said and done, the conservator will keep the job until the individual dies, doesn’t need him or her anymore, or cannot handle the responsibility- in which case a different conservator will have to be appointed.

 

To summarize , if an individual’s medical condition prohibits them from making financial decisions on their own, it may be time to look into a conservatorship. It can be a lengthy process, but every case is different and can lead to getting the individual the proper help.… Read the rest