Insight Law Insight Law 2026-11-10T16:06:03Z https://www.insightlawfirm.com/feed/atom/ WordPress /wp-content/uploads/sites/1304450/2020/12/Fav-icon-75x75.png On Behalf of Insight Law <![CDATA[Received IRS Letter 1058 or LT11? How to stop a levy]]> https://www.insightlawfirm.com/?p=49446 2026-11-10T16:06:03Z 2026-11-10T16:06:03Z Request a hearing before the 30-day deadline A Collection Due Process (CDP) hearing lets you challenge the proposed levy or request other payment options. To preserve your hearing rights:
  • Check the deadline: You generally have 30 days from when the IRS mails or delivers your notice. Check the deadline stated in your letter and confirm any discrepancy with the IRS.
  • Complete Form 12153: Explain your objections to the levy or identify the alternatives you want considered.
  • Submit your request: Send the form and a copy of your IRS notice to the hearing-request address listed on the letter. Consider using USPS Certified Mail with Return Receipt Requested and keep copies for your records.
A timely CDP hearing request stops the proposed levy for the tax periods covered by your notice during the hearing and any court proceedings. Certain exceptions apply, including jeopardy levies and levies involving state tax refunds, some employment taxes or federal contractors. This gives you time to discuss alternatives but does not erase your debt or prevent every collection measure. If you miss the deadline, you can generally request an equivalent hearing, a similar IRS review, within one year. However, it does not automatically stop collection or provide the same right to appeal to the U.S. Tax Court.

Explore ways to resolve your tax debt

If you cannot pay in full, consider these alternatives:
  • Installment agreement: Request monthly payments based on your financial circumstances and IRS requirements.
  • Currently not collectible status: Ask the IRS to temporarily delay collection if paying would prevent you from meeting basic living expenses. Interest and penalties may continue.
  • Offer in compromise: Propose settling your debt for less than the full balance, subject to IRS approval.
The IRS may request Form 433-A, 433-B or 433-F, along with records of your expenses, income, assets and debts.

Your options depend on acting in time

If you cannot pay your tax debt in full, an installment agreement or currently not collectible status may offer a way forward. Reviewing your notice and gathering financial records can help you prepare for the IRS hearing process. Before the 30-day deadline passes, a tax attorney who handles federal tax levies can help you evaluate your options and prepare your CDP request.]]> On Behalf of Insight Law <![CDATA[What happens if your business falls behind on sales tax?]]> https://www.insightlawfirm.com/?p=49422 2026-10-15T12:48:43Z 2026-10-15T12:48:43Z Penalties and interest can grow quickly Once a payment is late, penalties start at 9% of the unpaid tax. They rise to a total of 19% if the balance is still unpaid by the last day of the following month, and to a maximum total of 29% by the last day of the second month. Each tier has a $5 minimum, and interest builds until you pay in full. The department will waive penalties when circumstances beyond your control caused the delay. You may also qualify for a one-time waiver if you have a 24-month record of timely filing and payment. Because interest generally cannot be waived, documenting the reasons for the delay and acting promptly may help.

A tax warrant can lead to a lien and property seizure

If the balance stays unpaid, the department may issue a tax warrant, which has the force of a civil judgment. A warrant can lead to several consequences:
  • Penalty: The warrant adds a 10% penalty, with a minimum of $10.
  • Lien: If you do not pay within 10 days, the department files the warrant with the county superior court clerk. That filing puts a lien, or legal claim, on your real estate and on movable property such as equipment and vehicles.
  • Seizure: The department may seize property or levy bank accounts to collect.
  • License risk: The department may hold a hearing to revoke your business’s tax registration endorsement if a filed warrant stays unpaid for 30 days. You need this endorsement to operate legally in Washington.
Acting earlier may leave you more options:
  • Before a warrant: You may qualify for a self-service payment plan of 3 to 12 months for balances between $100 and $100,000.
  • After a warrant: An active warrant or lien disqualifies you from that plan, but you may still negotiate a partial payment agreement with a department revenue agent.
Penalties and interest continue to accrue during a payment plan.

Owners can be personally responsible for collected sales tax

Sales tax is trust fund money you hold for the state, not income your business keeps. If your limited liability company or corporation closes, becomes insolvent or is abandoned with a warrant unpaid, state law allows the department to pursue responsible individuals, including officers, managers and members of member-managed LLCs. Chief executives and chief financial officers may be strictly responsible even if they did not know about the unpaid tax, while others are liable only if they willfully failed to pay.

Getting legal guidance when you fall behind on sales tax

Falling behind does not always mean you have run out of options, and acting sooner may leave more of them available. An attorney who handles business tax matters can review your notices, explain which options may fit your situation and communicate with the department on your behalf. No one can promise a particular outcome, but understanding where you stand may help you plan your next step.  ]]> On Behalf of Insight Law <![CDATA[What if the IRS rejects your offer in compromise?]]> https://www.insightlawfirm.com/?p=49413 2026-09-14T16:06:39Z 2026-09-14T16:06:39Z You spent months gathering bank statements, pay stubs and asset records. Then the Internal Revenue Service (IRS) sent back a rejection of your offer in compromise. That decision stings, but it is not the final word on what you owe. You still have appeal rights, strict deadlines and several alternatives to consider.

Understand why the IRS rejected your offer

The rejection package usually explains the financial numbers behind the IRS decision. It breaks down the agency’s view of your income and expenses as well as the value and equity of your assets. Compare those calculations with the figures you submitted to identify where the IRS reached a different result. In most cases, the agency concluded it could collect more than you offered based on your reasonable collection potential, which combines the equity in your assets with your expected future income. One caution: a returned offer is not the same as a rejected one. Offers returned for missing returns, unpaid estimated taxes or an open bankruptcy generally do not provide the same appeal rights.

Act within the 30-day appeal window

If the notice says rejected, the clock starts right away. Count 30 days beginning with the date shown on the rejection notice, rather than the day you receive it. Send your request to the office that issued the rejection. You may submit IRS Form 13711 or prepare a written protest that provides the same information. Explain the items you dispute, the facts supporting your position and any legal authority you rely on. Timing matters for a second reason, since the law generally bars the IRS from levying while a timely appeal is pending.

Build evidence for the points you dispute

Meeting the deadline only opens the door. Appeals work from documents, not frustration, and the IRS warns that a general statement that you cannot pay will not move the review. Compare your Form 433-A (OIC) or Form 433-B (OIC) with the worksheets you received, then identify every line where the figures differ. The IRS measures living costs against published collection standards, and the Washington housing and utility allowances vary by county, so it does not hold a King County household to a rural figure. For vehicles and real estate, the IRS generally calculates quick sale value by reducing fair market value by 20%, then subtracting what you still owe.

Consider other ways to resolve the tax debt

An appeal is not your only route. A monthly installment agreement spreads the balance over time, and a partial payment plan may fit when full repayment is out of reach before the collection period ends. If paying anything would leave you short on basic living expenses, currently not collectible status can pause collection, though the debt and interest remain. Penalty relief may shrink the balance itself. Submitting another offer may also become reasonable after a meaningful change in your income, assets or necessary expenses.

Choose the next path for unresolved tax debt

A rejection tells you what the IRS believes it can collect. It does not tell you that number is right. Review the letter promptly, calculate the 30-day deadline and decide whether the disputed figures justify an appeal or another payment strategy makes more sense. Either choice beats letting the deadline pass and leaving the IRS to decide for you.]]> On Behalf of Insight Law <![CDATA[What should you know about injured spouse relief?]]> https://www.insightlawfirm.com/?p=49393 2026-08-11T15:49:11Z 2026-08-11T15:49:11Z A joint tax refund can sometimes go toward a debt that belongs to your spouse, leaving you without the portion of the refund you expected to receive. When that happens, you still have options available to help you recover your share when the debt belongs to your spouse rather than you.  Here are the key details you should know about injured spouse relief.

How it works

Injured spouse relief lets you ask the IRS to return your portion of a joint refund after they applied it to certain past-due debts. These debts can include:
  • Past-due federal or state taxes
  • Child support
  • Certain federal debts
  • State unemployment compensation debts
The amount you can recover depends on your share of the joint refund, which the IRS will calculate by investigating your financial and tax records.

Who qualifies for relief

You generally need to meet several requirements to qualify. You must have filed a joint return, the IRS must have applied your refund to your spouse's legally enforceable past-due debt and you must not have been responsible for that obligation. You also generally need to have contributed to the joint refund through income, tax withholding, estimated tax payments or certain refundable credits. Because Washington follows community property rules, special allocation rules can affect how the IRS calculates your share if you lived in Washington during the tax year.

How to claim your share

You generally request relief by filing Form 8379, Injured Spouse Allocation, either with your joint return or separately after the IRS applies the refund to the debt. You need to file a separate form for each tax year for which you seek relief. The IRS generally requires you to file within three years from the return's due date (including extensions) or two years from the date you paid the tax that later got offset, whichever period ends later.

Take steps to protect your refund

If you believe your spouse's debt reduced your joint refund, reviewing your tax return and the offset notice with an attorney can help you determine whether you qualify and what you need to file. Getting advice early can also help you avoid missing the applicable filing deadline.]]> On Behalf of Insight Law <![CDATA[Can you dispute the results of an IRS audit?]]> https://www.insightlawfirm.com/?p=49382 2026-07-13T06:24:38Z 2026-07-13T06:24:38Z Reasons to challenge the audit findings A dispute generally rests on one or more of these reasons:
  • Errors involving the facts: The examiner misunderstood or overlooked information relevant to your return.
  • Errors involving the law: The examiner incorrectly applied a tax law or regulation to your circumstances.
  • Errors involving the evidence: The examiner rejected an item that you can support with records that were not considered during the audit.
You generally bear the burden of demonstrating that the IRS made an incorrect adjustment. Under certain circumstances, that responsibility may shift to the agency if you satisfy federal recordkeeping requirements and cooperate with its requests.

Records to support your position

An audit challenge depends on records that address the specific adjustments in dispute. The relevant documents are often those created near the time of the transaction, including:
  • Bank statements and canceled checks tracing deposits and payments
  • Invoices, receipts and mileage logs recording business expenses
  • Appraisals supporting charitable gifts or disputed asset values
  • Third-party records, such as Forms 1099, brokerage statements and loan documents
  • Signed statements from people with direct knowledge of the transaction
If original documents are missing, reconstructed records may still help. Courts may accept reasonable estimates for some business expenses, but travel, meals and vehicle use require more detailed proof. Sorting records by tax year and disputed adjustment can also show how each document relates to the issue.

Ways to pursue a formal challenge

Before the IRS assesses additional tax, you may ask the Independent Office of Appeals to review the audit findings. Smaller disputes may qualify for a small case request, while larger disputes generally require a formal written protest. After receiving a notice of deficiency, you generally have 90 days to petition the U.S. Tax Court without first paying the disputed amount. If the IRS has already assessed the tax, you may request audit reconsideration based on new information. Alternatively, you may generally pay the liability in full, file an administrative refund claim with the IRS and, if the agency denies the claim or does not act within six months, submit a refund suit in a U.S. district court or the U.S. Court of Federal Claims. An attorney can review the findings, determine which path fits the stage of your dispute and prepare the required protest, claim or petition. Counsel can also present your position and track the deadlines that may limit your options.]]> On Behalf of Insight Law <![CDATA[How remote work affects your taxation as an employee]]> https://www.insightlawfirm.com/?p=49372 2026-06-19T09:22:36Z 2026-06-19T09:22:36Z What states levy personal income taxes? Washington does not levy a personal income tax on wages and salaries. As a remote worker, you do not have to pay a personal income tax to Washington. The state only imposes a tax on specific high-value capital gains. However, if your company is based in another state, you may be subject to the income tax laws of that state. Always check which state your company is based in. States which have “convenience of employer” rules may tax you, even if you are a non-resident. For example, New York and Pennsylvania tax personal income based on where employers are headquartered. The only exceptions are when reasons for remote work are for absolute necessity.

How else does WFH taxation affect you?

Even without a personal income tax, you will be subject to mandatory Washington payroll taxes and federal income taxes. Washington levies mandatory state payroll taxes such as WA Cares Fund for WFH employees. You are also required to pay federal payroll taxes like the Federal Insurance Contributions Act (FICA) taxes.

What happens with incorrectly withheld taxes?

Aside from special cases, your employer should generally not apply taxes from other areas. Check in with HR to ensure that your taxes are going to the right states. If you do spot errors in taxation, you will need to file a non-residency tax return to claim a refund. The refund process may take some time based on the state. In Washington, the main source of errors is when out-of-state employers apply taxes based on their headquarters. If you believe your employer has taxed you incorrectly, consider contacting a CPA or a tax law professional to determine your next steps.]]> On Behalf of Insight Law <![CDATA[Can bankruptcy help businesses with tax debt?]]> https://www.insightlawfirm.com/?p=49370 2026-05-22T09:52:22Z 2026-05-22T09:52:22Z What types of tax debt can bankruptcy address? Bankruptcy can potentially discharge qualifying federal income tax debts. For Washington businesses, state excise taxes like the business and occupation (B&O) tax may also qualify for discharge under strict circumstances. These follow different rules under federal bankruptcy law. Generally, the tax debt must meet specific criteria:
  • The tax debt is at least three years old from the original due date
  • The tax return was filed at least two years before filing for bankruptcy
  • The tax assessment is at least 240 days old
Federal bankruptcy law sets the rules for tax discharge. However, Washington State laws determine which state tax debts qualify as “trust fund liabilities” that cannot be discharged. Sales taxes your business collected also fall into this category and must be paid.

Which type of bankruptcy works for tax debt?

Different bankruptcy chapters offer different solutions for tax debt. The appropriate choice depends on your business’s legal structure. This includes:
  • Chapter 7: This chapter does not wipe out tax debt for coporations or limited liability companies (LLC). Instead, a Chapter 7 filing simply closes the business doors and hands all assets over to a court trustee to sell off. Tax debt is only completely discharged under this chapter if the business operates as a sole proprietorship. The process usually takes four to six months.
  • Chapter 11: This enables businesses to restructure their tax obligations into a manageable repayment plan. It allows the business to keep operating while addressing debt over time. The process can provide more time to make payments. Nevertheless, priority tax debts must be paid in full throughout the duration of the plan.
Chapter 7 works well when you have limited assets and qualifying tax debt. Alternatively, Chapter 11 allows you to manage operational challenges and tax obligations at the same time. You may benefit from talking to a legal professional to determine which chapter suits your situation.

Understanding bankruptcy options for tax debt relief

Bankruptcy offers potential relief for businesses struggling with tax debt. While not every tax obligation qualifies for discharge, many businesses find meaningful solutions through Chapter 7 or Chapter 11. The key is understanding your options and the specific requirements that apply to your circumstances.]]> On Behalf of Insight Law <![CDATA[What does SB 6347 mean for estate taxes?]]> https://www.insightlawfirm.com/?p=49364 2026-05-12T17:22:34Z 2026-05-12T17:22:34Z Estate planning requires a person to think about a variety of circumstances that might occur when they pass away. One of these is the ever-changing legal landscape surrounding estate planning and estate taxes.  For families in Washington, SB 6347 is one of the changes that’s occurring in 2026. The state’s top estate tax rate will drop to 20% on July 1, 2026. This means that individuals who die on or after that date will pay the 20% rate instead of having to pay the 35% that’s required prior to that date. 

SB 6347 raises challenges

The change in the law brings up some challenges for people who have taxable estates, such as those with real estate, farms, investment portfolios and other significant assets. While many people will focus heavily on the reduction in the tax rate, another concern is the exemption amount.  In 2025, changes increased in the amount of the estate that can be excluded. The rollback that’s coming in July raises questions about future inflation adjustments, which has some families closely watching the current threshold of $3 million. That exemption amount is frozen, so there’s no guarantee that it will increase in the near future. 

Estate plan review is critical

Now is the time to check estate plans to determine how to proceed. Because Washington’s tax is separate from the federal estate tax, it’s possible to owe state estate taxes even if there isn’t a federal estate tax due. This can be a shocking situation for people who believed that no estate tax would be due as long as there wasn’t a federal estate tax liability. Working closely with someone who can review the comprehensive estate plan and determine how to adjust for these changes may be beneficial for anyone in this position. Even though the date of the change is coming up fast, it’s best not to wait until then to check the estate plan to ensure that it still accurately reflects the creator’s wishes while taking the new law into account.   ]]> On Behalf of Insight Law <![CDATA[Washington SB 6346: Strategic planning for the 9.9% income tax]]> https://www.insightlawfirm.com/?p=49361 2026-05-09T00:17:37Z 2026-05-09T00:02:28Z What does the law now require? SB 6346 technically takes effect on January 1st, 2028. Those subject to the tax may need to make payments when filing their annual income tax return beginning in April 2029. The lookback period for residency and income-sourcing begins in 2026, which makes planning now critical. The revenue generated by this new 9.9% tax will fund public schools, health care programs and tax credits for lower-income families. SB 6346 does include provisions that extend credits to individuals who have paid other forms of taxes, such as capital gains taxes. The tax does not apply to assets, such as real property or business holdings. Married couples and domestic partners who cohabitate may be subject to the tax based on their joint income. The income of one spouse may push the couple over the $1 million threshold, resulting in both spouses facing financial obligations. Additionally, the law applies to part-year residents and non-residents who generate income in Washington.

How can people plan?

Those concerned about this tax can explore their eligibility for deductions and evaluate their Washington-based sources of income carefully. Business owners may need to review their operating agreements and pass-through arrangements for entity income to make adjustments that may minimize tax obligations. Pending lawsuits could theoretically affect the implementation of the new law. For the time being, Washington residents and those who generate income in Washington may benefit from planning as though the law may take effect as enacted by the legislature. Business owners, tech executives and others worried about aggressive Department of Revenue collection efforts or audits likely need guidance as soon as possible. Those facing state tax collection efforts or concerned about state income tax compliance may benefit from consulting with a Washington state income tax lawyer. Planning in advance can help those potentially impacted by this new tax avoid underpayment and other income tax issues.]]> On Behalf of Insight Law <![CDATA[What happens if I can’t afford to pay the full tax amount the IRS says I owe?]]> https://www.insightlawfirm.com/?p=49322 2026-04-22T12:18:31Z 2026-04-22T12:18:31Z You open a letter from the IRS and see you owe thousands of dollars. Your bank account cannot cover that amount. The IRS understands that many taxpayers face this situation and offers several programs to help. Taking action quickly gives you more options than ignoring the problem.

IRS programs for taxpayers who cannot pay

The IRS provides different ways to handle tax debt when you cannot pay the full amount immediately. For example:
  • Installment agreements: The IRS may let you pay your debt over time through monthly payments that fit your budget, though interest and some penalties continue adding up.
  • Offer in compromise: You might settle your tax debt for less than the full amount if you can prove paying everything would create serious financial hardship for you.
  • Currently not collectible status: The IRS may temporarily stop collection efforts if paying anything right now would prevent you from covering basic living expenses like rent and food.
  • Penalty relief: You might qualify to reduce or remove penalties if you have a good reason for not paying on time, though you still owe the original tax and interest.
Choosing one of these options stops the IRS from taking more aggressive collection actions against you.

What happens if you ignore the tax debt

The IRS increases pressure on taxpayers who do not respond to tax bills or try to arrange payment.
  • Interest and penalties grow larger each month you wait
  • The IRS files a tax lien that appears on your credit report and attaches to your property
  • The IRS can garnish your wages or take money directly from your bank account
  • The IRS keeps any tax refunds you expect and applies them to your debt
Someone familiar with IRS procedures and payment programs might help you understand which option fits your financial situation and how to apply before collection actions begin. The IRS offers real solutions for taxpayers who cannot afford to pay their full tax bill. Responding quickly and exploring your tax payment options protects you from liens, levies and other enforcement actions that make your situation worse.]]>