Tax Lien Removed and Amended Tax Return Leads to Substantial Refund

The Back Story:

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Individual from Lake County, Illinois

Our taxpayers have been married to each other since 1991 and had unpaid joint federal Form 1040 liability for 1991, 1992 and 1993 stemming from an audit of their tax returns for those years.  The IRS also assessed the fraud penalty against our taxpayers for each year.  The husband previously owned and operated his own business, and the IRS assessed the Trust Fund Recovery Penalty against him in excess of $150,000.00 and filed Notices of Federal Tax Lien.  Because of the husband’s unpaid liability due to the IRS, both taxpayers began filing their tax returns under the filing status of Married Filing Separate to keep the IRS from seizing the wife’s tax refunds.  After retaining Patrick T. Sheehan & Associates, we obtained and analyzed IRS transcripts of account and learned that the collection statutes of limitation for all of the liability had expired.  As a result, the IRS abated the prior liability but failed to release one of the two Notices of Federal Tax Lien that it had previously filed.  We contacted the IRS and obtained the release of the remaining federal tax lien.  We also advised our taxpayers to file amended tax returns for the last three years changing the filing status from Married Filing Separate to Married Filing Joint.  As a result of our advice, the taxpayers enjoyed substantial refunds from the IRS for the last three years, something that they would not have occurred had they not retained Patrick T. Sheehan & Associates.  The taxpayers are now free of their prior IRS debt, have no federal tax liens and are enjoying their refunds for the last three years.