Taxation & Estate Planning

Has IRS collections set a deadline you cannot meet? 7 solutions for more time

Posted on June 10, 2013
If you owe the IRS money and are dealing with an IRS Revenue Officer, or even IRS Automated Collection Service, expect deadlines.  Deadlines to provide financial information, deadlines to provide unfiled returns, and deadlines for a plan for account resolution...

How an IRS installment agreement can get your tax lien withdrawn

Posted on May 21, 2013
If an IRS tax lien is hurting your credit, or stopping you from purchasing a house or car, the IRS offers a path to freedom. The IRS will withdraw the lien from public record in the following circumstances: 1.     The amount you owe is under $25,000.   But this is flexible – see [...

Know the IRS warning signs of levy or seizure: IRS Letter 3174, New Warning of Enforcement

Posted on May 05, 2013
When working with an IRS Revenue Officer, there are two warning signs that levy action is imminent. The first sign is the IRS Final Notice of Intent to Levy.  This notice is required by law (Internal Revenue Code 6331) and provides a 30 day right to stop levy action by filing an administrative appeal...

How owing the IRS helps avoid bankruptcy means testing

Posted on April 20, 2013
It is complicated enough to understand when taxes can be discharged in a bankruptcy.  But once it is determined that your taxes can be done away with in bankruptcy, another potential hurdle rears its ugly head:  Bankruptcy means testing. Means testing determines what type of bankruptcy you qualify to file – Chapter 7, which eliminates [...

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An IRS letter that you want to receive: Case Closed ? Currently Not Collectible

Posted on March 25, 2013
There are many options to resolve an unpaid tax liability – you can agree with the IRS to make monthly installment payments, reach a settlement with an offer in compromise, eliminate the taxes in bankruptcy, or have the IRS place your account in currently not collectible status...

Offer in compromise vs. bankruptcy: Which one takes longer on the IRS?

Posted on March 09, 2013
Deciding whether it is best to submit an offer in compromise or file bankruptcy on your taxes involves thoughtful consideration of many factors.  Those factors include how long each can take, which option will have the lowest settlement payment, which is most likely to be successful, and post-settlement terms (like tax lien releases in bankruptcy [...

Is your tax return asking for an IRS audit? Five factors the IRS considers

Posted on February 24, 2013
There is an uncanny consistency in the returns that I see the IRS auditing.    The process that the IRS goes through to determine whether to audit a tax return is far from random.  The IRS knows what to look for, and can spot a return that is prone to having mistakes in it, making [...

What paperwork should I be prepared to provide to IRS collections? 10 items they may ask for

Posted on February 09, 2013
Resolving your tax debt often involves providing a financial statement to the IRS that discloses what you own, who you owe, what you make, and how much you spend. Your financial disclosures are required to be made on forms designed by the IRS.  There are three forms that the IRS uses:  The 433A, which you [...

Unfiled tax returns? How to make it right with the IRS

Posted on January 26, 2013
Falling behind on filing your taxes can be scary, filled with questions and doubt about how to make it right with the IRS.  Fortunately, there are steps that can be taken to satisfy the IRS and get you back into the system. Here are 10 things you should know about getting current with your unfiled [...

The three most urgent IRS letters, what they mean, and how to respond

Posted on January 12, 2013
The IRS sends out a lot of mail.  Any letter from the IRS should be taken seriously, but some have more legal ramifications than others.  Here are three of the most important IRS letters – what they mean, and how to respond: 1.     Notice of Deficiency...

What property is the IRS most likely to levy?

Posted on December 29, 2012
If you owe money to the IRS, chances are you have justifiable concerns over the IRS involuntarily taking your property to pay the debt. But the IRS releases statistics on what they levy and seize. This provides valuable direction as to what is really at risk for you rather than losing sleep and energy worrying [...

How should I dress and present myself when meeting with the IRS?

Posted on December 15, 2012
Meeting with the IRS is a stressful situation, filled with questions about what to expect.  If you have to meet with the IRS, a common concern is how to present yourself. Whether you are meeting with an IRS collections officer (Revenue Officer), an auditor (Revenue Agent) or with an appeals officer, it is important to [...

IRS says you spend too much? Solutions to IRS expense allowance guidelines

Posted on September 09, 2012
You decide to tell the IRS collection representative what you make, give them your paystubs, and innocently list your monthly living expenses.  You would like a payment plan, and have some idea of what you can afford.  Or you do not think you can afford any payment, and would like the IRS to put your [...

How Chapter 7 bankruptcy can help you with an IRS tax debt

Posted on August 26, 2012
Chapter 7 is for you if you do not have any money left at the end of the month to repay your creditors.  It is designed to give you a fresh start from honest mistakes you made in your finances – too much credit card debt, medical bills, a failed business and yes, unpaid taxes...

What to expect from the IRS if your business owes employment taxes: 10 tips

Posted on August 15, 2012
Unpaid employment tax liabilities results in the highest level of IRS enforcement.  The IRS usually assigns its most experienced Revenue Officers to investigate employment tax cases, including pursuing the individuals in the business personally for not paying their employees taxes...

Is there property that a tax lien does not stop you from selling?

Posted on August 02, 2012
The general rule is that a Federal tax lien attaches to all of your property.  But there are exceptions – known as “superpriorities” – situations in which you can sell your property even though the IRS has filed a tax lien against you...

IRS wage levy? Know your exemptions to protect your earnings

Posted on July 26, 2012
An IRS wage levy does not have to result in the loss of all of your paycheck. The Internal Revenue Code has exemptions that can protect your earnings from an IRS levy. These “exemptions” are listed in Section 6334 of the tax code, appropriately titled “Property Exempt from Levy...

IRS audits: If you don?t agree, you can appeal

Posted on July 15, 2012
IRS audits can leave your stomach in a knot and your head in your hands, often because you feel innocent of the changes the IRS is proposing to your tax return. Notice I said proposing. An IRS audit is not simultaneously the beginning and end of your defense, with the auditor playing the role of [...

Considering a collection due process appeal? Two reasons to file it late

Posted on March 09, 2012
The ability to file a collection due process appeal is probably the most powerful right you have in defending against IRS enforcement by levy or seizure. Due process, in the context of IRS collections, means the right to reach resolution of your case before the IRS can take your property, and the right to have [...

IRS interest and penalty fees: How it can double the amount you owe

Posted on March 05, 2012
As a general rule, count on IRS interest and penalties doubling the amount you owe every five years.   Interest is only part of the cause; it is the penalties that really hurt. Interest rates charged by the IRS are not unfair – the federal short-term  rate plus 3%...

Life after an IRS audit: What to expect next on the balance owed

Posted on December 18, 2011
Making it through an IRS audit is stressful and anxiety ridden, but for many, it is not the end of the road in dealing with the IRS.  Many IRS audits result in balances due.  Here are my responses to great questions from a reader about dealing with IRS collections after the audit...

Discharging taxes in bankruptcy: How collection due process hearings can change the result

Posted on August 20, 2011
Another great question from a reader on how the bankruptcy code and tax code can intersect when discharging taxes in bankruptcy. Dear Mr. Levy, We owe income tax from 2007.  We filed the return on October 15, 2008 with an extension.  We filed a collection due process appeal and had a hearing, agreeing to monthly payments of [...

Discharging taxes in bankruptcy: How collection due process hearings can change the result

Posted on August 20, 2011
Another great question from a reader on how the bankruptcy code and tax code can intersect when discharging taxes in bankruptcy. Dear Mr. Levy, We owe income tax from 2007.  We filed the return on October 15, 2008 with an extension.  We filed a collection due process appeal and had a hearing, agreeing to monthly [...

Statute of limitations on collection: Are you unwittingly giving the IRS more time?

Posted on July 18, 2011
The statute of limitations on collection will make most every IRS collection problem come to an end.  Internal Revenue Code 6502 puts a limit on how long the IRS can pursue the collection of a tax debt. The timeframe is 10 years from when the IRS puts a liability on its books...

Statute of limitations on collection: Are you unwittingly giving the IRS more time?

Posted on July 18, 2011
The statute of limitations on collection will make most every IRS collection problem come to an end.  Internal Revenue Code 6502 puts a limit on how long the IRS can pursue the collection of a tax debt. The timeframe is 10 years from when the IRS puts a liability on its books...

IRS levy? Two ways to get a release fast, no questions asked

Posted on July 06, 2011
When the IRS gets you with a levy, bad things can happen – your wages are frozen and you are looking at living without a paycheck. The money you need to pay bills is suddenly swiped out of your bank account. This presents an urgent dilemma requiring immediate relief...

Offer in compromise: Not all it?s cracked up to be?

Posted on June 26, 2011
Turn on your television, listen to the radio, and it will be there: advertisements encouraging you to settle up with the IRS. Or watch the media, and you will see government agencies getting coverage for cracking down and closing some “pennies on the dollar” promoters for, well, over promoting the offer in compromise...

Offer in compromise: Not all it?s cracked up to be?

Posted on June 26, 2011
Turn on your television, listen to the radio, and it will be there: advertisements encouraging you to settle up with the IRS. Or watch the media, and you will see government agencies getting coverage for cracking down and closing some “pennies on the dollar” promoters for, well, over promoting the offer in compromise...

Is the IRS going to seize and take my car?

Posted on February 01, 2011
Here is a practical question from a reader about a concern of everyday living – IRS seizure of your car to pay your tax debt. If I own a free and clear vehicle that is ten years old and has 115k miles on it, and it is worth 4,000.  Will it be seized if the IRS [...

Is the IRS going to seize and take my car?

Posted on February 01, 2011
Here is a practical question from a reader about a concern of everyday living – IRS seizure of your car to pay your tax debt. If I own a free and clear vehicle that is ten years old and has 115k miles on it, and it is worth 4,000.  Will it be seized if the [...

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