Scenario Description
Chris, a client facing severe tax compliance issues, approached Davidov & Associates for assistance. For the last six years, Chris had not filed tax returns, leading the IRS to contact him for nearly two years, threatening to file liens against his property and garnish his wages. In a dire situation, Chris sought the firm’s expertise to resolve these impending financial burdens.
Key Tax Considerations
- Unfiled Tax Returns: The primary issue was Chris’s failure to file tax returns for the past six years, which had escalated to the IRS taking aggressive collection actions.
- IRS Liens and Wage Garnishments: The IRS had placed liens on Chris’s property and initiated wage garnishment as a means of enforcing tax collection, significantly impacting Chris’s financial stability.
Advice and Planning
- Compiling and Filing Delinquent Returns: Davidov & Associates worked closely with Chris to gather all necessary support documents and meticulously prepared and filed all of his delinquent tax returns.
- Initiating the Removal Process: After allowing about 60 days for the IRS to process the filings, the firm proactively contacted the IRS to start the procedure for removing the liens and garnishment.
- Negotiation and Compliance: Their negotiation skills and thorough understanding of IRS processes were instrumental in convincing the IRS to lift the financial constraints on Chris’s accounts and wages.
The resolution brought immense relief to Chris, who was grateful to regain full access to his bank accounts and receive his entire take-home pay. Most importantly, he received a refund for most of the funds that had been impounded while the lien was in place. Davidov & Associates’ effective handling of this complex situation not only resolved the immediate financial crisis but also reinstated Chris’s compliance with tax obligations, demonstrating the significant impact of professional CPA intervention in challenging tax situations.