Advice Pool - Finance

Friday is the payday for most Americans. Getting paid is usually a good start to a great weekend. Unfortunately, for some people payday is a disaster because the IRS has issued a wage levy and they get little or nothing on payday. What could be wor

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

se? Calling the bank to find out if you have money to pay your bills and finding out that your account has been frozen with an IRS bank levy. Does this happen? Yes, it does and it is occurring more often now that IRS has adopted a “get tough” polic

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

y on collecting tax debts.

IRS keeps an amount from each pay check based on the number of exemptions claimed on the employee copy of the Form 668W. Failure to fill out the 668W may mean the maximum is kept from an employee paycheck. If you are mar

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

ried or have kids, it is critical to fill out the 668W exemption portion. For very low wage earners, an IRS levy may not result in a huge bite due to the allowed amount you can take home; but for anyone making over $10 an hour, the IRS wage levy can

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

be devastating. IRS can also levy on Social Security or Military Retirement, but in those cases normally only 15% of the payment is attached.

The good news for those people who get hit with a levy is this: IRS doesn’t normally plan to collect a ta

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

x debt via a wage levy or constant bank levy action. Collection enforcement actions are often used as “attitude adjusters” to get taxpayers into compliance. If you get an IRS bank or wage levy, you just need to respond quickly with a willingness to

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

do what it takes to get the levy released and work out a payment arrangement. Barring rare circumstances; IRS will release a wage levy if you are in current tax compliance, provide them with the financial information they require to make a collectio

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

n determination, and agree to a payment plan or prove financial hardship.

Current compliance means that you have correct withholding and at least the last 7 years tax returns filed (if you had income or were self-employed). If you don’t have your W

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

2s for prior years, IRS can get the info to you so you can file the returns. Those who are self-employed must start making Estimated Tax Payments for 2006. Failure to get into current tax compliance may mean no wage levy release.

A bank levy is muc

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

h harder to get released than a wage levy. If IRS issues a levy on your bank, the funds are frozen and placed on hold in escrow for 21 days. If you can get the levy released within that time frame, the bank will put the money back in your account.

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

Otherwise, the bank sends in the cash to IRS after the hold expires. Please note, unless a new levy is issued, you can still deposit money into your account after the initial levy to pay checks. To get a bank levy released, you must show extreme f

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

inancial hardship or show that the levy is invalid. An example of hardship might be an eviction notice or documentation of a medical condition that requires drugs that can’t be paid for without the money in the bank etc. An invalid levy would be one

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

that was issues for taxes already paid in full or expired, a levy made without proper notice, or a levy attaching to an account of someone other than the taxpayer.

In my career as an Enrolled Agent, some of the toughest battles I’ve fought have bee

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

n over bank levy actions. In the past year I’ve had two cases where a mother in her 60-70s had an account frozen due to a son or daughter who owed taxes. The child was on their bank account for convenience. They were released but I had to get the

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

Taxpayer Advocate involved both times. IRS is very reluctant to grant relief on a bank levy.

The best course of action is to prevent a levy by filing your tax returns and paying your taxes on time. However, if you know you have an IRS problem, be

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

pro-active and get help now before a levy. Be sure to pick up your Certified Mail and open any IRS letters. I can't tell you how many folks come to me after not picking up letters or opening IRS mail. If you get an IRS letter, call a tax professi

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

onal or call the IRS ASAP. Many people who think they can "slip through the cracks" get caught in one!

If you owe less than 10K in payroll tax or $20K in personal taxes and have all your returns filed, you may be able to just pick up the phone and

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

call IRS to set up an Installment Agreement. For those people who owe more than $10K in payroll tax, $20K in personal tax or have un-filed tax returns, you might be well served by hiring a good CPA, Enrolled Agent, or Tax Attorney. Whatever you do,

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

don't hire some "tax resolution" firm you see on TV or on an internet pay per click ad offering "95% off tax debt" etc. These companies often have you talk with a "Tax Consultant" who is nothing more than a salesman. If you seek professional help,

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

insist on talking to a CPA, EA, or Tax Attorney. They may bill you $75-$150 per hour, but in the long run will likely be much less expensive than those "tax resolution" firms. Also, instead of making wild promises, they will likely deliver results

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Advice Pool - Obtaining an IRS Levy Release: The 668W & 668A

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