Tax Debt Settlement

It’s important you do not to ignore IRS back taxes for long. When IRS collection notices are ignored, the IRS has to resort to collecting from taxpayers by force. They do this with their dreaded IRS tax levy. By law, the Internal Revenue Service has the right to issue an IRS tax levy on you. This means it’s completely legal for the IRS to levy your bank accounts, issue wage garnishments, and even seize your assets in extreme cases.

The most common IRS tax levy collection tools are the IRS bank levy and the IRS wage levy. If you receive notice from the IRS that either Tax Levy is going to be issued on you, you need to act fast. Your income and bank account funds are at stake and the matter is now extremely urgent!

IRS Bank Levy:

The IRS bank levy is an extremely harmful way to collect IRS back taxes. All of the money you scrimped and saved can be gone in and instant. Here’s what happens when the IRS Issues a bank levy: 1. First, the IRS freezes your bank account. 2. They give you 21 days to contact them and explain why you should receive the money. If you do not comply, the IRS will keep all of the money in your account for good. If you received a Notice of Intent to Levy from the IRS, it’s imperative to act fast and get your tax debt taken care of. It’s a smart idea to consider professional help at this point. Timing is crucial and a tax professional has a better chance of negotiating with the IRS and getting the bank levy removed in the short 21 day time frame. Remember that once the IRS seizes your account funds with the bank levy, you will not be able to get them back.

IRS Wage Levy:

The IRS wage levy is another brutal method used to collect IRS back taxes. It’s also known as wage garnishment. Basically, the IRS can take a percentage of your paycheck until your tax debt is paid in full, or until the statute of limitations on your tax debt expires. You do not want the IRS to seize money from your paycheck for years. Remember, they can seize up to 70% of your paycheck. It’s important to work fast to find a better solution for paying off your IRS back taxes.

Stop the Bleeding:

Your bank account and paycheck are being threatened. How do you stop the tax levies, and fast? You have to start by giving the IRS what they want. You have to make an arrangement to pay on your IRS back taxes. You can pay by settling your tax debt (for less than the full amount due) with an Offer in Compromise, or your can pay them monthly through what is called an Installment Agreement.

Hiring Professional Help:

Once an IRS tax levy or federal tax lien has been issued against you, things get tricky. Negotiating with the IRS is tough once they’ve opened a direct route to your money. If you’ve already received an official IRS Notice you might need professional assistance with your tax debt. With a tax professional working on your side you have a better chance of being successful and getting your tax debt issues resolved once and for all.

Efforts to save the reform effort were teetering "on the brink of collapse Thursday as House and Senate leaders struggled to coalesce around a strategy to rescue the plan," Politico reports. "The legislative landscape was filled with obstacles: House Democrats won’t pass the Senate bill. Senate Democrats don’t want to start from scratch just to appease the House. And the White House still isn’t telling Congress how to fix the problem. … But for the first time in the yearlong push, Democratic aides — and even some members — finally acknowledged privately that the fear of failure was real." Congress recessed for the weekend (O’Connor and Budoff Brown, 1/21).

The Christian Science Monitor: "After meeting with the House Democratic caucus today, Speaker Pelosi told reporters that she does not see the votes to pass the Senate bill. ‘Without any change, I don’t think it is possible to pass the Senate bill in the House,’ she said at a briefing (Thursday). … That vote count — by a Speaker noted for being good at it — derails what had been the fastest track to moving healthcare through the Congress. Passing the Senate bill as written avoids further action in the Senate, where Democrats no longer have the 60 votes needed to block a Republican filibuster. Democrats are in agreement on about 80 percent of policy, she said" (Chaddock, 1/21).

Roll Call reports on the Democrats’ differing opinions on the next steps. "’You couldn’t get the House to pass the Senate bill if your life depended on it,’ said Rep. Ra l Grijalva (D-Ariz.), co-chairman of the Congressional Progressive Caucus. … Democratic Senators and aides said they still do not believe that House passage of the Senate bill is completely off the table, despite Pelosi’s statement. They said the Speaker has told them privately that, in order to secure enough votes for the Senate bill, she would need a promise of Senate action on the House’s concerns" (Dennis and Pierce, 1/21).

The Washington Post has more on Pelosi and House members who "demanded that the Senate pass a separate bill amending the health-care legislation before they consent to support it." House members worry about the — what they term insufficient — level of federal subsidies the Senate version would offer the uninsured and an excise tax on so-called "Cadillac" insurance policies. "Senate Democrats agreed to many of the changes during negotiations this month to merge the chambers’ respective bills. … The only other option under consideration is to write a new bill, possibly scaled back considerably to win Republican support, an undertaking that could consume months, with no guarantee of success" (Murray and Kane, 1/22).

The Wall Street Journal: While some Democrats "said they weren’t in a rush to push ahead and needed time to absorb the new political dynamic," and others urged a more populist tone, Republicans were sending a clear message. "Congress needed to start from scratch. ‘The American people right now want this health-care bill defeated,’ said Eric Cantor, the No. 2 House Republican. ‘They want health-care reform, but not in the way that has been constructed under either one of these bills’" (Adamy and Bendavid, 1/21).

McClatchy: "The White House bowed to the need to pause on health care. ‘The president believes it is the exact right thing to do, by giving this some time, by letting the dust settle, if you will, and looking for the best path forward,’ White House Press Secretary Robert Gibbs said" (Lightman and Douglas, 1/21).

Gannett/Statesman Journal: Brown’s election has wracked Democrats and led to conflicting views of the direction the president should take. "Will he pull back to the center, reassess and cut deals, like Bill Clinton? Or will he press ahead on health care reform and other issues dear to liberals?" Liberals say the Massachusetts vote punished Democrats for timidity on health care; centrists argue it’s a call for the party to reassess priorities (Raasch, 1/21).

Meanwhile, certain consumer groups, patient advocates and doctors are urging Democrats "not to abandon the comprehensive health overhaul they’ve worked so long to pass," according to the Los Angeles Times. The AARP, American Cancer Society Cancer Action Network, Consumers Union, Families USA and the Service Employees International Union sent a letter in support of the reform bills to Pelosi and Senate Majority Leader Harry Reid.

"Leaders of the American Medical Association also voiced continued support for efforts to expand insurance coverage and reshape the nation’s healthcare system. ‘We’re the last … industrialized country that has not figured out how to do this. It is time,’ said Dr. Nancy Nielsen, immediate past president of the AMA." Liberal groups MoveOn.org and Health Care for America Now also reasserted their support (Levey, 1/21).

Another group of stakeholders — insurers — who seem to have reason to celebrate the "possible collapse" of the reform effort may find that the recent difficulties may "not actually be such good news," The New York Times reports. In exchange for agreeing to "offer coverage to everyone, regardless of medical status … the government could ensure that people, even the young and healthy, would have to sign up." As many as 30 million more customers would have meant significant new revenues for insurers, analysts say. Now, "the insurers still face the daunting challenge of selling a product that is increasingly out of reach for more Americans as the cost of medical care — and thus premiums — continues to climb" (Abelson, 1/21).

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There are four main taxes involved in any property sale and purchase transaction These taxes are:

* The transfer fee which is payable to Land Registry Office

* The capital gains tax which is payable to the Tax Office

* The VAT (KDV) which is payable to the Tax Office or to the vendor

* The Stamp Duty which is payable to the Tax Office

Different taxes apply to gifts of property for no consideration and transfers of property between family members.

As a general rule, capital gains tax is payable by the vendor and the transfer fee and Stamp Duty is payable by the purchaser, although this can always be varied by the parties by an express clause in the Contract of Sale.

The payment of VAT depends on two factors:

* Whether or not the transaction is subject to VAT. This depends on whether the vendor is deemed by the Tax Office to be a “professional vendor” (i.e. whether the transaction is of a commercial nature or for profit). If the vendor is deemed to be a professional vendor, the transaction will be subject to VAT. If the vendor is a private individual, the transaction will not be subject to VAT.

* Terms of the Contract of Sale. If the transaction is subject to VAT, who will actually pay the VAT depends on the terms of the Contract of Sale i.e. whether or not the sale price is stated to be inclusive or exclusive of VAT.

Taxes are generally paid on transfer of title. The percentages listed below are calculated as follows: the Transfer Fee is generally paid as a percentage of the assessed value of the property which is carried out just before transfer of title takes place. The Land Registry assesses the property in the state it is in at the date of the assessment i.e. if there is a new construction on the property, this will be included in the assessment of the value of the property. The VAT, Capital Gains and the Stamp Duty are based on either the assessed value or the contract value, whichever is the highest. Under new regulations, the Tax Office now requires a copy of the contract of sale to be presented to it prior to transfer of title.

The percentages levied for each of the three types of tax are shown below:

* TRANSFER FEE – The transfer fee is 6%. However, every person has a once in a lifetime option to reduce this to 3%. If a purchaser elects to use this option on the purchase, he or she will only pay 3%. Once this option right has been used, the transfer fee payable on all future purchases by that person will be 6%.

* VAT FOR PROPERTY TRANSACTIONS – 5% of either the assessed value or the sale price. Please note that some vendors require the VAT to be paid on the actual sale value of the property as stated in the Contract of Sale on the date that possession of the property is delivered to the purchaser. You should check the terms of your contract of sale on this point.

* CAPITAL GAINS TAX – As stated above, this is usally paid by the Vendor. The amount payable depends on whether the vendor is a professional vendor a private individual as defined under VAT above. If the vendor is a professional vendor, the rate will be 6.25%. Otherwise, the rate will be 3.5%

* STAMP DUTY – This is 0.5% of the contract price provided this is paid within 1 month of the date of the contract. If it is not paid within this time, the rate increases in stages until after 6 months it becomes 1.5%.

FREQUENTLY ASKED QUESTIONS

Vat For Property Transactions

Will I have to pay VAT on my property purchase?

In determining whether you will be liable to pay VAT on your property purchase, you need to establish the following:

* Whether the vendor is a professional vendor as defined above.

* Whether your contract requires you to pay the VAT.

Where the contract does not expressly mention VAT, it is our opinion that the purchase price shall be deemed to be inclusive of VAT.

CAPITAL GAINS TAX

Will I have to pay Capital Gains Tax on my purchase?

Generally, no. Capital Gains Tax is usually paid by the Vendor, unless otherwise stipulated in your contract.

Will I have to pay Capital Gains Tax on the sale of my property? If so, how much will this be?

This depends on whether you are a private individual or a professional vendor (as defined above):

Every private individual has a once in a lifetime tax free sale option (for a house and land not exceeding approximately 1 donum). If you use this use this option, you will not be liable to Capital Gains Tax on that sale. On all subsequent sales, Capital Gains Tax will be payable at 3.5%, provided you do not sell more than 3 properties in one year, making you a professional vendor.

For professional vendors, there are no tax exemption rights. Capital Gains Tax is payable on every sale at a rate of 6.25%.

What if I sell my property before taking title? Will I still have to pay Capital Gains Tax?

Capital Gains Tax is not payable if you sell the property before taking title by doing an assignment of contract.

IRSDebtHelpHQ.com – If you owe money on back taxes to the IRS, and you decide to hire a tax relief firm, you need to understand that you will still be expected to participate in the process. If there is a sales person at the other end of the phone promising you that you will never have to provide financial information to the firm or the IRS, then run! In order to resolve ANY tax debt to the IRS, two very important things must be provided (1) Any and all late tax returns must be filed. The …

Remarks of President Barack Obama – As Prepared for Delivery
Tax Delinquency Memorandum
January 20, 2010
Washington, DC
 
Good morning.  Here in our nation’s capital, there are a number of ways to advance the ideals and interests of the American people. Often, it is done through Congress. But it can also be done through what’s called a Presidential Memorandum – a directive that I give to cabinet secretaries and to federal government employees to change how our government works. In a few moments, I will issue one of these directives to help stop government contracts from going to companies that are seriously delinquent in their taxes.
 
This is not simply a matter of signing a piece of paper or taking a bureaucratic act. By issuing this directive, all of us in Washington will be required to be more responsible stewards of your tax dollars. All across this country, there are people who meet their obligations each and every day. You do your jobs. You support your families. You pay the taxes you owe – because it’s a fundamental responsibility of citizenship.
 
And yet, somehow, it’s become standard practice in Washington to give contracts to companies that don’t pay their taxes. Studies by the Government Accountability Office have identified tens of thousands of such deadbeat companies that are being awarded government contracts. One company owner who owed over one million dollars in taxes was paid over one million dollars as a defense contractor – and instead of using that money to pay his back taxes, he chose to buy a boat, some cars, and a home abroad with his earnings. The total amount owed in unpaid taxes by companies like that is estimated at more than $5 billion.
 
Now, in Washington, $5 billion might not seem like a lot of money. But if we were to invest that money in education, it would be enough to cover the cost of annual college tuition for more than half a million students.  If we were to invest it in health care, it would be enough to cover two and a half million children. If we were to invest it in energy, it would be enough to weatherize more than 800,000 homes.
 
In a time of great need, when our families and our nation are finding it necessary to tighten our belts, and be more responsible with how we spend our money, we can’t afford to waste taxpayer dollars. And we especially can’t afford to let companies game the system. We need to make sure every tax dollar we spend is going to address our nation’s urgent needs and to make a difference in the lives of our people.
 
The status quo, then, is inefficient and wasteful. But the larger, more fundamental point, is that it’s wrong.  It is simply wrong for companies to take taxpayer dollars and not be taxpayers themselves. We need to insist on the same sense of responsibility in Washington that so many of you strive to uphold in your own lives, in your own families, and in your own businesses.
 
That is exactly what the memorandum I am issuing today is meant to do.  I am directing my budget office, together with the Treasury Department and other federal agencies, to take steps to block contractors who are seriously delinquent in their taxes from receiving new government contracts.  I am also directing the IRS to conduct a review of the overall accuracy of companies’ claims about tax delinquencies. We need to be sure that when a company says it’s paying taxes, that company is, in fact, paying taxes. 
 
Beyond these steps, I am also calling on Congress to build on the kind of legislation that Senator McCaskill, Congressman Ellsworth, and Chairman Towns have introduced – and that I introduced when I was a Senator – legislation that will crack down on tax cheats by allowing the IRS to share information about tax delinquency with contracting officials. And by the way, when I introduced that Senate bill, Claire stood by me, and Brad led the way in the House.
 
Further, my budget from last year proposed that if a company with lots of unpaid taxes receives a federal contract, the government ought to be able to pay taxpayers back in full before it is required to pay the contractors themselves. It also proposed that tax collection, on behalf of American taxpayers, should not be subject to long bureaucratic delays – it should be done swiftly.  Since Congress did not act last year on this proposal, I am including it in this year’s budget – and I once again urge Congress to act on it.
 
The steps I’m directing today and the steps I’m calling on Congress to take are just basic common-sense. They’re not going to eliminate all of the waste or abuse in government contracting in one fell swoop. Going forward, we’ll also have to do more to hold contractors more accountable not just for paying taxes, but for following other laws as well, including employment and environmental laws.
 
But the efforts I’m outlining today will help scale back waste and abuse. And they will help bring the values of America’s government and the values of America’s companies in line with the values of the American people.  So with that, I’m going to sign this memorandum.

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