On the eve of tax day, a Statesboro-based tax attorney gave his best tips for dealing with the Internal Revenue Service for those who might one day fall under its microscope.
Jeffrey L. Williamson of J.L. Williamson Law Group, spoke on Tuesday to the Savannah Chamber of Commerce’s Small Business Council SMART luncheon, hosted monthly at the Savannah Morning News headquarters on Chatham Parkway.
Employing humor and at least two screens of legal disclaimers, the Statesboro attorney said his biggest advice for those who fall behind is to not hide from the IRS.
“I represent businesses all the time that don’t understand the full nature of their liabilities,” Williamson said. “So what if you get behind and can’t pay and don’t want to go to Leavenworth?”
Explaining the difference between liens and levies — a lien is a claim attached to property while a levy is the actual seizure of that property — he said these are the two tools the IRS uses to garnish back taxes. He said there are only a few items the IRS won’t try to collect on, for example clothing and furniture.
“If you can get to it, so can the IRS,” he said.
He said this includes retirement accounts, unemployment benefits, Social Security and houses with equity in them.
“Of all the things I say, here’s the most important thing you ought to know. If they call you and want to talk to you: shut up, shut up, shut up,” he said to laughter. “You don’t know what to say and what not to say.”
He said the main thing is to be proactive. There are a number of procedural avenues you can take, Williamson said, including a collection due process hearing (CDP), collection appeals program (CAP) and offers in compromise. There’s also installment agreements and bankruptcy.
“Those notices of federal tax liens and notices of intent to levy are very important documents because they trigger certain procedural rights you have before the IRS,” he said.
Once a business owner receives an IRS notice, for instance, he or she can get a lawyer to file a form for a CDP, a collection due process hearing, within 30 days.
“Why is that important? Because it suspends all collection activity,” he said. “This will slow things down.”
Compromise is often a good tact once other issues are worked out, and he said every offer he’s made has been accepted by the IRS. In one example he cited, a client who owed nearly $850,000 in payroll taxes settled with the IRS for $350,000.
Williamson only briefly mentioned bankruptcy, a procedure he described as too complicated to get into, and said it should generally be used as a last resort.
Asking if there were any questions, no one in the 50-plus audience raised a hand, another opportunity for Williamson to employ some trademark lawyer humor.
“No one wants to admit they owe anything,” he said. “Enjoy filing your 1040s.”