When a taxpayer owes substantial unpaid taxes, the IRS may file a Notice of Federal Tax Lien (NFTL), creating a public record that attaches to all current and future property. For wealthy individuals in Boca Raton, this lien impacts real estate transactions, investment portfolios, and even trust or estate planning.

To prevent a lien, it is critical to engage the IRS before the lien is filed. You may qualify for a payment plan (Installment Agreement) or submit an Offer in Compromise (OIC). Entering into a Direct Debit Installment Agreement often avoids liens entirely if your balance is below certain thresholds.

If a lien is filed, remedies include: Withdrawal (removes from public record if the debt is satisfied or if it was filed in error), Subordination (allows refinancing while lien remains in place), and Discharge (removes the lien from specific property, like in a real estate transaction).

For Boca Raton high-net-worth taxpayers, timing matters. The IRS Collections Advisory Unit may be engaged for complex portfolios with securities or foreign holdings. Sophisticated representation can ensure liens are prevented or minimized.

Beyond these mechanics, prevention hinges on credible compliance behavior. Promptly filing all past-due returns, reducing the assessed balance with amended filings (when defensible), and making good‑faith voluntary payments signals to the IRS that enforced collection is unnecessary. If your balance qualifies, a streamlined payment plan with direct debit can be the fastest path to avoiding a notice of lien. Where liquidity is temporarily constrained but net worth is high, document illiquidity (e.g., restrictive partnership agreements, loan covenants, or margin requirements) and propose a short‑term plan that converts to a larger principal reduction after a planned liquidity event (sale, refinance, bonus, or distribution). If an NFTL is already filed, pair a withdrawal request with process improvements—such as auto‑debit enrollment and proof of current deposit compliance—to strengthen your case. Finally, evaluate property‑specific strategies (subordination for refinance; discharge for a pending sale) so transactions can proceed while you resolve the broader liability.

IRS Federal Tax Lien Information

A levy is different from a lien. While a lien is a claim, a levy allows the IRS to seize assets. For wealthy individuals in Boca Raton, this often means brokerage accounts, retirement funds, or bank accounts. Once levied, your financial institution must hold and then turn over funds to the IRS within a set period.

High-value levies can disrupt investment strategies, forced liquidations, and cause tax consequences from early withdrawals. You may prevent or release a levy by: Entering into an Installment Agreement, Applying for an OIC, Demonstrating financial hardship, or Filing an appeal through the Collection Due Process (CDP) procedure.

Sophisticated taxpayers should also consider liquidity planning: shielding retirement funds (subject to limited exemptions), preserving homestead rights under Florida law, and negotiating before assets are frozen.

Practically, the best defense is speed and documentation. If you have received a Final Notice of Intent to Levy, request a timely CDP hearing to pause enforcement while you present a resolution proposal. Provide a current, well‑supported financial statement, evidence of market disruption or risk from forced sales, and a plan that pays more over time than a levy would net after taxes and transaction costs. Where funds are in retirement accounts, weigh the excise taxes and early‑withdrawal penalties that would erode recovery; the IRS will consider this when evaluating alternatives. If a levy has already hit, contact the revenue officer immediately with proof of harm (e.g., margin calls, default risk, payroll failure) and a concrete payment plan to seek a release. Establishing direct‑debit payments and demonstrating current‑year compliance (estimated taxes paid, withholdings corrected) materially improves outcomes.

IRS Levy Information

Yes. The IRS actively enforces international reporting requirements under FATCA and FBAR. If you have delinquent taxes and undisclosed offshore accounts, the IRS can seize or levy those accounts through international agreements.

Wealthy Boca Raton taxpayers with significant global holdings risk enhanced scrutiny. Offshore banks frequently cooperate with the IRS, particularly if your accounts exceed reporting thresholds.

Defenses include entering Streamlined Foreign Offshore Procedures or negotiating compliance before collections. Non-compliance often results in penalties greater than the unpaid tax itself.

From a collections perspective, foreign exposure increases leverage for the government and complexity for the taxpayer. Expect information requests about beneficial ownership, entity structures, and transfers between related accounts. To reduce risk, promptly file overdue FBARs/Forms 8938, correct prior returns, and document tax basis and income characterization for offshore investments. If reasonable cause is supportable (e.g., reliance on a professional, ambiguity in residency), assemble contemporaneous evidence. Where assets are in jurisdictions with strong treaty cooperation, early voluntary disclosure can prevent asset freezes and reputational damage. Align your disclosure strategy with a parallel collections resolution (installment plan or OIC) so that compliance and payment track together, demonstrating good faith while capping penalties.

FATCA and FBAR Requirements

The IRS may accept less than the full tax owed if you prove inability to pay. Wealthy individuals often assume they are ineligible, but cash flow, liquidity, and asset accessibility are considered, not just raw net worth.

If assets are illiquid (e.g., closely held businesses, real estate tied up in trusts), the IRS may accept an OIC even if net worth looks high. Properly documenting asset restrictions, legal encumbrances, and family obligations is key.

For successful OICs at higher income levels, precision in the financial disclosure is everything. Support every line of Form 433‑A(OIC) with third‑party statements, appraisals for unique assets, and legal documents that prove encumbrances or transfer restrictions. Tie your offer amount to the IRS’s “reasonable collection potential” (RCP) formula: realizable equity in assets plus a multiple of future disposable income after allowable expenses. Where income is variable (e.g., K‑1s, bonuses, capital gains), use multi‑year averages and document volatility; propose a payment option (lump‑sum vs. periodic) that best aligns with expected cash events. If medical needs, special education, or elder care materially reduce disposable income, include detailed proof so those amounts are allowed. Finally, keep all current‑year filings and estimated payments perfect during review; processable, compliant offers get traction—noncompliance stalls or kills them.

Offer in Compromise

The IRS uses Collection Financial Standards to determine allowable living expenses when negotiating repayment. For wealthy Boca Raton residents, many lifestyle expenses (luxury cars, country clubs, high private school tuition) exceed IRS standards and will not be allowed as necessary expenses.

A skilled CPA must align your financial disclosures to IRS standards, while justifying legitimate business or medical expenses. Failure to do so can result in aggressive collection demands far higher than realistic cash flow.

Practically, this means recasting your monthly budget into what the IRS recognizes as necessary and reasonable: national/local standards for food, housing/utilities, transportation, and out‑of‑pocket medical. Items outside those bands must be defended with evidence of necessity (e.g., special‑needs schooling, medically required transportation) or tied directly to income production (e.g., professional dues, licensing, secure communications). For Boca Raton households with higher costs of living, leverage the “local standards” where they exceed national medians and document any atypical but essential expenses. Anticipate that discretionary spending, luxury leases, and second‑home costs will be excluded; plan a resolution that still works after those adjustments. Align business distributions and estimated taxes so that current‑year compliance is maintained—this both improves the proposal and prevents new balances that could invalidate an agreement.

Collection Financial Standards

Florida DOR applies control tests, and reclassification means paying back reemployment tax plus penalties. The IRS may also pursue payroll taxes, including Social Security, Medicare, and income tax withholding.

Misclassification can trigger both federal and state liabilities, including the Trust Fund Recovery Penalty, making Boca Raton owners personally liable.

Expect auditors to examine who controls the manner and means of work, whether the worker has multiple clients, bears entrepreneurial risk, and supplies their own tools. If reclassification occurs, liabilities often include retroactive RT‑6 contributions, interest, and penalties in Florida, plus federal assessments for FICA and withholding. Downstream exposure may extend to workers’ compensation, wage‑and‑hour claims, and benefits disputes. To mitigate risk, compile contracts that reflect true independence, collect W‑9s, verify business registrations/insurance, and avoid behavioral controls that look like employment (fixed schedules, mandatory meetings, exclusive work). If caught in an audit, consider Section 530 relief at the federal level (if you have a reasonable basis and consistent treatment) and negotiate penalty abatement by demonstrating good‑faith compliance efforts. Going forward, implement a classification policy, train managers, and conduct periodic reviews so you can defend your model under both IRS and Florida standards.

Florida Reemployment Tax

The IRS generally audits three years back, but extends to six for major underreporting and unlimited years for fraud. Florida DOR’s standard lookback is three years, extendable to five in fraud cases.

For planning, assume auditors will request at least twelve quarters of payroll data, with sampling techniques that extrapolate findings across periods. Keep payroll registers, tax deposits, and quarterly returns synchronized; reconcile Forms 941, W‑3, and state RT‑6 totals to your general ledger. If records are incomplete, the government may estimate based on bank statements, 1099/1096 filings, and third‑party data—usually unfavorable. Statute extensions can be avoided by timely filing accurate returns; if you’re asked to sign a statute extension (Form SS‑10), negotiate scope and duration and exchange it for audit efficiencies or penalty considerations. When exposure spans closed and open years, craft a global resolution that limits lookback via materiality thresholds and sampling agreements. Finally, maintain impeccable current‑year compliance during the audit—clean current behavior can influence discretion on penalties and installment terms.

IRS Employment Taxes

The IRS may hold you personally liable for unpaid payroll taxes withheld from employees’ wages. This penalty attaches to officers and decision-makers, even if the business entity itself collapses.

The Trust Fund Recovery Penalty (TFRP) equals 100% of withheld income and FICA taxes that were not remitted. The IRS will conduct interviews (Form 4180) to determine who was responsible and willful—signers on bank accounts, approvers of payments, or those who decided to pay vendors instead of the IRS. Once assessed, the TFRP can lead to personal liens and levies against owners, CFOs, controllers, and sometimes outside managers. Defenses include demonstrating lack of authority, no willfulness (e.g., you did not know of the delinquency), or reasonable cause. If assessment seems likely, position for mitigation: restore trust funds quickly, enter a business installment agreement, and document changes in controls (e.g., dedicated tax escrow accounts). During investigations, respond precisely and avoid speculative statements; anything suggesting knowledge and preference for other creditors over the IRS is harmful. Retain counsel for Form 4180 interviews, and appeal promptly if proposed assessments misstate facts. Remember: paying net payroll while skipping deposits creates personal exposure—freeze distributions until deposits are current.

Trust Fund Recovery Penalty

Options include Installment Agreements, Partial Pay Installments, or Offer in Compromise. Payroll tax debts are considered more serious, so negotiations are stricter.

Start by stabilizing current deposits—showing that new liabilities will not accrue is a prerequisite to any deal. Provide a complete, accurate Form 433‑B (and 433‑A for owners) with bank statements, AR aging, lease terms, and proof of expenses. For cash‑flow‑tight companies, a Partial Pay Installment Agreement can align payments to seasonal revenue while protecting jobs; propose a realistic amount that still exceeds what enforced collection would net after disruption. If the business is not viable without restructuring, consider an OIC based on RCP, but note that payroll‑related compromises face high scrutiny. Seek penalty relief by documenting reasonable cause (theft, natural disaster, sudden key‑person loss) and implement forward‑looking controls: tax escrow accounts, payroll provider with auto‑debits, and board policies prioritizing deposits. Coordinate state liabilities with Florida DOR so federal and state plans don’t conflict, and memorialize all agreements in writing with clear default terms.

Online Payment Agreement

Maintain payroll registers, W-2s, 1099s, bank statements, contracts, and timecards. Incomplete records often result in estimates that heavily favor the IRS or Florida DOR.

Build a defensible file: payroll journals matching gross‑to‑net, proof of tax deposits, quarterly Forms 941/RT‑6, annual W‑2/W‑3 reconciliations, and signed I‑9/W‑4 forms. Keep contractor packets (W‑9, certificates of insurance, engagement agreements) and evidence of independence (invoices, advertising, multiple clients). Reconcile payroll expense to cash disbursements and to GL accounts monthly; discrepancies are audit magnets. Retain board minutes or emails that show policy decisions, particularly around cash crunches and tax deposit priorities. Use a payroll provider with audit‑ready reports and enable role‑based approvals to avoid unauthorized changes. Digitize everything and maintain backups; missing documentation is often treated as noncompliance. Finally, implement a month‑end checklist that includes deposit verification, return filings, and management sign‑off; consistent process is your strongest proof of good‑faith compliance and can materially reduce penalties.

IRS Employment Taxes

Keep reconciled POS, merchant, and DR-15 filings. DOR often uses markup analysis, so discrepancies between purchase invoices and reported sales trigger assessments.

Build an audit‑ready file before you get a notice: monthly tie‑outs between POS sales, bank deposits, and DR‑15 returns; inventory movement reports; vendor invoices; and documentation for discounts, voids, and returns. For restaurants and salons, retain detailed tip reports and service vs. product breakdowns. If your markup varies by category, provide category‑level metrics so auditors don’t apply a single blended rate that overstates sales. Maintain current resale/exemption certificates and verify them at sale; absent proof, auditors deem sales taxable. Where cash sales are material, implement controls (daily cash counts, camera coverage of tills, and manager sign‑offs) to rebut assumptions of skimming. If an assessment seems inflated, challenge methodology: propose narrower samples, remove anomaly days, and correct product mix. Demonstrate corrective actions (upgraded POS mappings, periodic CPA reconciliations) to support penalty relief and a faster close.

Florida Sales Tax

Restaurants, salons, construction, and luxury retail are high audit risks. Cash sales and tipping make audits more complex.

Florida DOR prioritizes sectors with complex taxability and significant cash flow. Restaurants and bars face menu‑item taxability, waste/spillage issues, and tip allocations. Luxury retailers experience high ticket variability and promotional discounts that can confuse reported taxable sales. Construction trades grapple with real property improvements versus retail sales of tangible personal property, use‑tax exposure on materials, and exemption documentation for resale or government work. Medical spas and salons must parse taxable products from exempt medical procedures. E‑commerce sellers with Florida nexus are scrutinized for marketplace facilitation and shipping/handling taxability. If you operate in these sectors, conduct a pre‑audit risk review: map POS codes to taxability, sample invoices for correct tax, and confirm that exemption certificates are valid and retained. Bolster controls around cash handling and train staff on when tax applies, especially for mixed transactions.

Florida DOR Audit Information

Typically three years, but up to five if fraud is suspected. Boca Raton businesses with incomplete records may face extended audits.

Audit duration depends on responsiveness, data quality, and the need for expanded testing. Provide complete sales registers, merchant statements, purchase records, and general ledger extracts at the outset to avoid iterative requests. Clarify sample periods and agree in writing to projection methods before work begins. If records are missing, auditors may expand the scope or apply adverse assumptions; invest time upfront to reconstruct gaps from bank data and vendor statements to keep the window narrow. When negotiating lookback, highlight operational changes (new POS, ownership, product mix) to prevent projections from earlier periods overstating later liabilities. Request penalty abatement concurrently—demonstrate training initiatives, policy updates, and reconciliations implemented during the audit to support reasonable cause. A proactive, organized posture shortens the cycle and reduces both tax and soft costs.

Florida DOR Audit Information

You must maintain copies of resale certificates and proper documentation. Missing certificates mean the sale is taxable, even if exempt in theory.

Florida places the burden on the seller to substantiate exemptions. Collect current Annual Resale Certificates (Form DR‑13) and verify buyer details; implement POS prompts to scan/attach certificates to the transaction record. For exempt organizations and government entities, retain letters/contracts proving status and purpose of use. Train staff to distinguish exempt resale from exempt end‑use and to apply tax correctly to mixed invoices. Periodically audit your exemption files—expired or illegible documents can invalidate otherwise exempt sales. If certificates are missing during audit, attempt post‑sale validation; while not guaranteed, auditors may accept subsequent documentation for reasonable, good‑faith transactions. Establish a written exemption policy and reference it in employee training and vendor onboarding to demonstrate systemic compliance and support penalty relief.

Florida Sales Tax

Florida considers unremitted sales tax as theft of state funds. Penalties include interest, fines, and potential criminal referral.

Because sales tax is trust money collected from customers, non‑remittance is treated severely. Expect assessments for tax, interest, and penalties that escalate with the length and intent of nonpayment. In egregious cases, cases may be referred for criminal prosecution, and responsible persons can face personal liability. Operationally, delinquency can trigger liens, bank levies, and license revocations that halt operations. To course‑correct, immediately file past‑due DR‑15 returns, even if you cannot pay in full, and begin a payment plan while demonstrating improved controls—segregated tax accounts, daily deposit procedures, and CPA oversight. If prior filings overstated tax due to mapping errors, pursue amendments with documentation. For first‑time issues tied to cash‑flow shocks (hurricanes, theft, supplier collapse), prepare a reasonable‑cause package to seek penalty relief. Showing a credible, monitored compliance plan is essential to avoid escalating enforcement.

Florida Sales Tax