Taxation & Estate Planning

IRS collections in troubled times

Posted on November 16, 2009
Everyday, I see how the IRS is responding to people hurt by the economy. The Journal of Tax Practice and Procedure asked me to write an article about it  - ”IRS Collections in Troubled Times.” Current IRS enforcement is centered on recovering government money that was spent to stabilize the economy...

IRS audits ? how can you prove expenses without receipts?

Posted on November 09, 2009
Can you prove expenses in an IRS audit without receipts and checks?  Thanks to the tax case of Cohan v. Commissioner,39 F. 2d 540 (2d Cir. 1930), the IRS will allow expenses even if receipts and checks are missing. All you need is a reasonable basis to recreate the expense and credible testimony that you actually spent the money...

Your word against the IRS ? you lose?

Posted on November 07, 2009
“I know I filed it, but the IRS tells me they never received it.” Tax returns – lost.  Collection appeals – misplaced.  Innocent spouse claims – never processed. The reality is that the IRS does lose incoming mail.  It is the exception, not the rule, but it happens...

Bankruptcy Forum: What Judges and Trustees Want You to Know

Posted on November 03, 2009
I will be on a panel seminar in Cincinnati on November 6 to address taxes and bankruptcy. My co-panelists include Bankruptcy Judge Jeffrey Hopkins and Bankruptcy Trustees Henry Menninger and Tom Geygan. In addtion to IRS and bankruptcy, other topics that will be discussed include bankruptcy’s impact on divorce, real estate and understanding means testing...

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IRS collection priorities and trends for 2010

Posted on October 31, 2009
What to expect from the IRS collection division in 2010: 1.     More aggressive IRS tax lien filing practices. IRS Revenue Officers have been instructed to make decisions on the filing of Federal tax liens within 10 days of case assignment.   The IRS hit an all-time low for lien filings in 1999 of 167,000...

Trust fund recovery penalty: How much time does the IRS have to assess it?

Posted on October 20, 2009
It can be tempting to use payroll tax withholdings as a source of operating capital for your business, especially in troubled times.  But this is dangerous – the IRS can penalize anyone in your business who took part in this decision with personal liabilty for the unpaid taxes...

IRS taking too long to decide your offer in compromise? After two years, its accepted.

Posted on October 10, 2009
The IRS is generally known to be prompt in processing offers in compromise. But the IRS is also known for losing files and not processing claims. Sometimes, things get washed into the big bureacracy. So, what if the IRS takes its time on your offer, or it slips through the cracks unattended without an answer?  Time can [...

Who?s afraid of an IRS letter? 5 reasons not to be.

Posted on October 06, 2009
A funny thing happened to me on the way to my mailbox today.  There was a letter from the IRS.  Sure, I get plenty of IRS mail everyday – I am an IRS defense attorney.   But this one had my name on it. I put myself in my clients’ shoes.  I understood their fears...

Real example: When can my taxes be discharged in bankruptcy?

Posted on September 27, 2009
I do alot of IRS and bankruptcy work for my clients, and receive many questions about  it works.  Bankruptcy is a valuable tool to eliminate IRS liabilities. To help in understanding taxes and bankruptcy, I thought it would be helpful to provide real life examples, starting here with a “bankruptcy timing” question I recieved from an enrolled agent [...

IRS auditor giving you trouble? Where else can you turn?

Posted on September 22, 2009
It is common to feel like you are not getting a fair shake from an IRS auditor.   Frustration mounts with perceptions that the auditor is unreasonable.  No matter what you do, the auditor cannot be satisfied.  You are told you owe money to the IRS, and you know you don’t...

Face to face with IRS agents: Who?s who?

Posted on September 18, 2009
If you find yourself in an IRS pickle, there are three IRS employees you are most likely to come face to face with.  Those are Revenue Officers, Revenue Agents and Special Agents.  Here is what to expect from each: An IRS Revenue Officer is in collection enforcement...

When does a Federal tax lien expire and become unenforceable?

Posted on September 13, 2009
IRS tax liens are not forever.  They do expire – here is an overview of when: For starters, the IRS has 10 years to pursue you for the unpaid taxes that caused the lien to be filed.  The 10 years starts on the date you began owing the IRS money...

Non-filers with mortgages: The IRS might be watching

Posted on September 02, 2009
I received a call from a Wall Street Journal reporter on a story he was writing on an IRS announcement that they might use mortgage interest payments to identify non-filers. It goes like this:  You have not filed tax returns.  You are self-employed and your income is not reported to the IRS...

Get ready ? 2,000 new IRS collection Revenue Officers are coming

Posted on August 25, 2009
In an unprecedented hiring move, the IRS is bringing on board almost 2.000 new Revenue Officers, starting this fall (2009).  This is a 35% increase in high level IRS collection enforcement staffing. The ramp up will entail over 1,000 new Revenue Officers in the fall, with another 350 coming on board in 2010 and then 500 [...

The first step to ending IRS collection problems: Finding the money for estimated taxes

Posted on August 22, 2009
If you have had trouble paying taxes to the IRS in the past and would like to settle up, the first step is to ensure that you are paying your taxes now.  The IRS will not negotiate unless it sees that you are current on your taxes. And any solution that is negotiated will quickly [...

What the IRS must do before it enters a private space to make a seizure.

Posted on August 17, 2009
The IRS cannot come into your private space on their own and seize business assets or your valuable personal possessions.  They first need either: (1)   Your permission or (2)   A writ of entry from a federal judge. This is a basic Fourth Amendment protection against unreasonable searches and seizures...

Trust Fund Interview and Form 4180

Posted on July 06, 2009
In today?s difficult economic environment, expect more businesses to resort to using payroll tax money to stay afloat and a corresponding increase in IRS enforcement measures. With bank lending tight, employee tax withholding is a ready ?but dangerous?source of immediate operating capital...

Who do you pay first - IRS debt vs. credit cards?

Posted on July 05, 2009
It is not unusual for my clients to find themselves indebted to two masters - the IRS and credit card companies.  Both want a piece of the pie, but there is not enough to go around.  So who do you pay first? How do you make both go away? The IRS comes first...

How common are IRS mistakes in property seizures?

Posted on June 20, 2009
The IRS appears to be human, and it makes legal and administrative errors when seizing property, says the Treasury Inspector General for Tax Administration (TIGTA). TIGTA just completed a review of 50 IRS property seizures to determine if they complied with the requirements of Internal Revenue Code sections 6330 to 6344 and Internal Revenue Manual guidelines...

Reopening IRS audits - are they really final?

Posted on June 14, 2009
I have seen a stream of new calls from readers who went through an IRS audit and are receiving IRS collection notices for amounts they probably do not owe. Although they disagreed with the audit, they did not understand the need to take the dispute to IRS appeals or Tax Court...

Why does the IRS ask on Form 433A if you have lived out of the country six months in last 10 years?

Posted on June 07, 2009
It is always important to understand what the IRS is asking, and why. Resolution of most collection cases involves providing answers to IRS questions about you.  The questions are asked on an IRS financial statement, known as Form 433A.     One question the IRS asks:  Have you lived out of the country for more than six [...

IRS is hiring auditors and collection agents - enforcement to increase

Posted on June 06, 2009
The IRS is hiring revenue agents (auditors), revenue officers (collectors), and special agents (criminal investigators).  This has been made public by the IRS, but I attended a joint conference with the IRS last week in which every IRS panelist - from IRS auditor managers to taxpayer advocates to senior IRS attorneys - confirmed the trend [...

Four ways to handle disagreements with IRS auditors

Posted on June 04, 2009
A common problem with IRS audits is not seeing eye to eye with the auditor. The auditor sees the case narrowly, while you see the big picture.  You know you incurred that expense or did not have unreported income, but the auditor’s criteria is difficult to satisfy...

Bankruptcy as leverage in an offer in compromise

Posted on May 27, 2009
On more than one occasion I have used the possibility of bankruptcy as leverage in reducing the value of a offer in compromise.  The possibility of bankruptcy can have a big impact on an IRS compromise.  Here’s why: 1.     A Chapter 7 bankruptcy can “discharge” a tax liability...

Can I make the IRS an offer to pay tax only?

Posted on May 23, 2009
I received this question about using an offer in compromise on interest and penalties: I owe $25,000 in tax, but the interest and penalties have made the amount I owe almost double.  Won?t the IRS be happy just to get the principal I owe back and forgive the interest and penalties? In an offer in compromise, the [...

A Tax Court win for the good guys

Posted on May 17, 2009
It really does happen - you can overturn an IRS audit in Tax Court. My client disagreed with an IRS audit that determined she should pay a 10% tax on early distributions from her retirement account.  She had taken early retirement, and wanted to start taking withdrawals from her retirement account...

The Tax Compromise Improvement Act of 2009

Posted on May 13, 2009
House Ways and Means Oversight Committe Chairperson Charles Lewis and Ranking Member Charles Boustany have introduced H.R. 2343, the Tax Compromise Improvement Act of 2009. The bill would eliminate the requirement of IRC 7122(c) that lump sum offers must be accompanied by an upfront payment equal to 20% of the value of the compromise...

All of it, or just 15% - IRS manual and automated levies on social security benefits

Posted on May 09, 2009
A reader asks the following regarding IRS levies on social security benefits: What is the difference between an automated federal levy on social security and a manual tax levy, and why does the IRS choose one over the other? Here is my response: 1.     Automated Levy (15%)...

Why a tax lawyer can make a difference

Posted on May 04, 2009
I am often asked by new clients how a tax lawyer can make a difference in an IRS dispute.  Here is my answer: Once you retain a tax lawyer, the IRS must stop calling you.  The IRS is required to conduct all negotiations - telephone calls, meetings, etc...

How much IRS debt is uncollectible?

Posted on April 27, 2009
The IRS Taxpayer Advocate, Nina Olsen, reported in her recent testimony to the House Ways and Means Committee that the IRS classified nearly $20 billion in tax debt as “currently not collectible” in 2008.   This is more than the amount the IRS collected on taxpayer delinquent accounts, including installment agreements and offers in compromise [...

Collection of IRS withholding taxes against business owners and managers

Posted on April 24, 2009
The IRS takes the decision to use employee tax withholdings to pay business operating expenses rather than the IRS quite seriously.  The owners and managers of the business who make these decisions will find the IRS coming not only to the business, but to them, to recover a portion of the withholdings...

IRS statute of limitations - without waking up the IRS

Posted on April 18, 2009
A client came in today with an older tax liability that appeared to have only two years left on the IRS statute of limitations on collection.  The client had not heard from the IRS in years. A statute of limitations is the time the IRS has to do something...

IRS Commissioner Douglas Shulman on IRS collections during recession

Posted on April 13, 2009
Today IRS Commissoner Douglas Shulman gave an interview on National Public Radio (NPR) about how the IRS will be dealing with hardship cases during these difficult economic times. Shulman did not addresss what is really holding up IRS collections - an offer in compromise system that accepts only 25% of the offers it receives...

Your budget vs. IRS expense allowances - How do you compare?

Posted on April 11, 2009
In determining whether you can repay a delinquent tax liability, the IRS uses its own expense allowances to arrive at your cash flow.  Just because you have the expense does not mean the IRS will allow it.   In most cases, your housing/utilities and auto operating expenses will exceed IRS guidelines...

IRS bank levy - how safe is my account?

Posted on April 08, 2009
An IRS levy on your bank account can be disastrous - checks not clearing, bank service charges, and concern over paying basic living expenses from the lost funds.   The good news is that tax law gives you a 21 day window to get the money back into your account before your bank sends it to [...

What an IRS criminal investigation for tax fraud looks like

Posted on April 03, 2009
With tax season in full bloom, a little reminder to avoid making false or fraudulent claims on your tax return is in order.    If you want to see what a criminal tax case looks like, the IRS makes it easy - here are the fact patterns and sentencing results of over 50 criminal tax cases [...

IRS updates collection due process handbook

Posted on March 30, 2009
The IRS has updated its handbook on Collection Due Process appeals (Chief Counsel Notice 2009-10). Included in the handbook is internal IRS guidance on issues such as disqualified employment tax levies, levies on single member limited liability companies, ex parte communications between appeals/collection and equivalent hearings...

Does the IRS follow a divorce decree?s statement of responsibility to pay a joint tax liability?

Posted on March 27, 2009
IRS problems and divorce often come bundled together.  Here is my response to a question I recieved about how a divorce decree impacts the IRS in the collection of an unpaid tax liablity: My ex was self-employed when we were married, and he never paid his taxes...

Tough economy + aggressive IRS = tax bankruptcy.

Posted on March 21, 2009
All recent indications are that the IRS is plowing ahead in its collection efforts under a weakening economy.  Revenue Officers continue to push hard, and there are no signs that Automated Collection Service has backed off its levy and lien filings. The unfortunate result of this pressure is that more and more clients are turning to a [...

Protecting retirement accounts from IRS seizure.

Posted on March 15, 2009
Retirement accounts are considered to be an investment that is protected from creditors.  But here is an interesting question from a reader about a big exception to that rule (yes, it is the IRS):  Several years ago, I liquidated all of my retirement money to pay for gambling trips to the casinos...

IRS to hire over 1,000 new collection personnel in 2009

Posted on March 13, 2009
After conducting an extensive review of their use of outside private debt collectors, the IRS has decided to eliminate the program in its entirety.  The program lasted for all of 30 months.   But the IRS is not standing still.  This is not a downsizing mode...

What to expect when an IRS Revenue Officer comes calling to your home or business.

Posted on March 11, 2009
IRS Revenue Officers are the most experienced and sophisticated collection employees within the IRS. They work high dollar cases identified by the IRS to be of significance.  Focus is often given to business cases, employment tax liabilities, repeat offenders and non-filers...

Proposed relief for IRS interest and penalties.

Posted on March 05, 2009

The damage that can be done by IRS substitute returns, and how to solve it.

Posted on February 25, 2009
Here is a reason to always filed your tax returns… I just resolved a case where my clients did not file their 2000 and 2001 returns. This resulted in the IRS making an estimate of their liability by what is known as a “Substitute for Return...

The advantage of the Automated Collection Service practitioner priority line

Posted on February 20, 2009
For taxpayers seeking to contact the IRS on their own, what follows is a reason not to go at it alone but through a tax professional. Professionals can access the IRS Automated Collection Service by first dialing in through the IRS Practitioner Priority Line...

How does the IRS approach collecting unpaid employment taxes from a closed business and its officers?

Posted on February 14, 2009
I received this question from a reader about a closed business that owes employment taxes to the IRS, and her personal liability for the taxes: The IRS is trying to collect on employment taxes from a company that has been out of business for several years...

Has the time arrived for IRS amnesty for non-filers?

Posted on February 09, 2009
Today’s Cincinnati Enquirer published an editorial of mine about offering IRS amnesty to non-filers.   There are 6.1 million non-filers - to find out how to bring them back into the system with a fresh start and stimulate the economy, read the article here.

The powers of an IRS Revenue Officer?

Posted on February 04, 2009
When negotiating with IRS Revenue Officers, it is important to remember the many enforcement tools they have at their disposal.  These powers include: 1.     Filing a Federal tax lien securing the IRS’s interest in a taxpayer’s property. 2...

Assets to always claim as ?exempt? on an IRS financial statement (433A)

Posted on January 27, 2009
Internal Revenue Code section 6334(a) shields certain taxpayer assets from the IRS collection powers.  As these assets are beyond the reach of the IRS, it is important to remember to always exclude their value from IRS financial statement Form 433A. Claim as “exempt” the following: 1...

Offer in compromise vs. bankruptcy - Which settlement amount will be the lowest?

Posted on January 21, 2009
With new clients, I spend time discussing the options for obtaining a fresh start from IRS problems. The consultation most always involves making the client aware of the pros and cons of resolution by compromise, and by bankruptcy.   In that spirit, here then is the first of a continuing series on the use of an offer [...

Can the IRS take my spouse?s income if only I am liable?

Posted on January 17, 2009
The IRS cannot take collection action against the separate income of a non-liable spouse.   If separate tax returns are filed, only the person who signed and filed the return is legally obligated to pay the taxes.  If your spouse did not sign or file a joint return with you, then the IRS cannot collect from him [...

Is there such a thing as a ?hardship status? with the IRS?

Posted on January 09, 2009
If you cannot pay your delinquent taxes because of an economic hardship, the IRS can suspend collection efforts against you.  This does not mean your debt is forgiven; just that the IRS will defer collection and not take your wages or bank account. Internal Revenue Service Policy Statement 5-71 permits hardship status on IRS accounts, as [...

How can an extension to file a tax return impact a discharge of taxes in bankruptcy?

Posted on January 03, 2009
One rule to follow in bankrupting income taxes is that the liability must be from a return that was due to be filed three years before the bankruptcy is commenced. The key is to be careful to include extensions of time to file in calculating the due date of the return, especially starting in 2009...

How do I know if my business is in tax trouble?

Posted on December 27, 2008
Entrepreneurs justifiably take great pride in their business.  But this pride often gets in the way of a clear understanding of the risk of continuing to operate into a storm of IRS trouble.  The IRS comes down hardest on businesses with tax troubles, and owners and management are usually implicated as well...

Can the IRS continue to audit me year after year?

Posted on December 22, 2008
There are limits on the IRS continuing audits year after year.  These audits are known as “repetitive audits.” Their scope is limited by Internal Revenue Manual 4.10.2.8.5.   The Internal Revenue Manual states that if you are contacted by the IRS, and had a similar issue examined by them in either of the two prior years, [...

When is the IRS prohibited from taking collection action? Part III

Posted on December 14, 2008
Here are the final five situations to look for when the IRS cannot take collection action: When the value of the property is protected by exemptions provided by Section 6334 of the Internal Revenue Code.  There is certain property that the IRS cannot take under any circumstance, including your furniture and household goods valued up to [...

When is the IRS prohibited from taking collection action? Part II

Posted on December 07, 2008
Here are five more situations in which the IRS is barred from taking collection action against you: When the timeframe to collect the liability has expired.  The IRS has 10 years to collect a liability from the date it puts the liability on its books...

When is the IRS prohibited from taking collection action? Part I.

Posted on November 30, 2008
The list of when the IRS cannot take property is fairly extensive, so I will do this in parts to break it down simply. Here is Part I of when the IRS is prohibited from taking collection action: When there is insufficient equity in the property.  There must be sufficient net proceeds from the sale to [...

How many offers in compromise does the IRS really accept?

Posted on November 17, 2008
The IRS offer in compromise program has been promoted endlessly over the last several years. Turn on your television, open up the newspaper, or listen to the radio, and there it is.   My clients usually are very interested in the compromise program, but the first thing I do is set them straight that this is [...

What do I do if I am audited by the IRS but my recordkeeping is poor or my records are lost?

Posted on November 09, 2008
Since I often help clients close out IRS audits when their records are lacking, I thought it was time to answer this question:  I recieved a letter to meet an auditor from the IRS to audit my 2005 - 2007 taxes. My house was broken into several times, and I don?t have any of my paperwork [...

If I file bankruptcy on the IRS, but my spouse does not, will the filing stop the IRS to both of us or only me?

Posted on October 26, 2008
When a bankruptcy is filed on the IRS, Section 362 of the Bankruptcy Code imposes what is called an “automatic stay” on collection activity by creditors, including the IRS.  The automatic stay requires the IRS to release any levys and to cease any further collection action...

Can the IRS conduct a collection interview at your house or business?

Posted on October 18, 2008
IRS Revenue Officers continue to become more aggressive in the field. Here is a new approach to look for: I had a recent case in which a Revenue Officer sent my client a notice stating that that there would be an interview at my client’s house.  These meetings usually take place at an IRS office...

Go back six years to get current on unfiled returns.

Posted on October 15, 2008
In most cases, the IRS will require the past six years of unfiled tax returns for an account to be considered current.  This is a written directive of the IRS, found in IRS Policy Statement 5-133, “Delinquent Returns - Enforcement of Filing Requirements”...

How does the IRS value retirement accounts in an offer in compromise?

Posted on October 12, 2008
I recently received a email question inquiring about how the IRS values retirement assets in an offer in compromise. If you do not have the right to access the retirement money, then neither does the IRS, and it is not included in the value of a compromise...

IRS levies on Social Security benefits - enforced collection on those who can least afford it

Posted on September 15, 2008
I have seen an increase in calls to my office from retirees who have received an IRS levy on their Social Security benefits.  In most every case, the levy (1) relates to conduct from self-employment when they were younger, and that conduct has long ago ended and (2) creates a substantial hardship for the retiree, [...

Can the IRS take my stuff?

Posted on September 09, 2008
In the vast majority of cases, you will not lose any of your stuff to the IRS.  Most clothing and personal household belongings are beyond the scope of the IRS collection power.  Here’s why: Section 6334(a)(1) of the Internal Revenue Code allows you to keep all of your clothing...

IRS steps it up on pursuit of unpaid employment taxes

Posted on August 31, 2008
In tough economic times, hard-working entrepreneurs protect their business by first paying the vendors, suppliers and employees that are necessary to operations, and delaying payment to the IRS.   This is because the vendors and employees are at the door, waiting for payment, and there can be no tomorrow without them...

5 things to always do when talking to the IRS.

Posted on August 19, 2008
1.     Be courteous and respectful.  You will get nowhere with an angry or condescending attitude, and will just give the IRS reason to come down harder on you.  When your head is in the mouth of the bear, say nice bear. 2.     Abide by deadlines, or call for more time if one can’t be met...

Where do Tax Court judges get their experience from?

Posted on August 17, 2008
Tax Court judges have experience either as former government lawyers or in the private sector at law firms. Of the thirty-two Tax Court judges, thirteen previously worked for the government as IRS lawyers; four were employed by the Department of Justice’s Tax Division...

Agreements to repay IRS debts under $25,000 can be simple and straightforward.

Posted on August 02, 2008
I often have new clients come in who owe the IRS under $25,000 and have the ability to repay the debt with monthly installment agreements.  If we determine they can repay the debt within 60 months, we secure from the IRS a repayment that is called a “streamlined installment agreement...

Doing away with an audit result in bankruptcy.

Posted on July 26, 2008
I received this referral this week about eliminating taxes in bankruptcy: I was audited for my 2005 taxes and owe $55,000 to the IRS as a result.  I owe other debt in addition to the IRS liability, and was considering bankruptcy even before an IRS Revenue Officer came to my house and left her card in [...

When does the collection of IRS debt expire?

Posted on July 19, 2008
With more money sitting delinquent in the US Treasury than the government has resources to collect, this is a great question.  All of that “quiet” debt does go eventually go away.   The IRS has 10 years to collect a tax debt.  The IRS refers to this as a “Collection Statute Expiration Date...

?But I thought bankruptcy couldn?t eliminate IRS taxes??

Posted on July 15, 2008
I hear this often when I suggest bankruptcy as a source of resolution.  I heard it again today during a telephone conversation with a new client.  Here is what I explained to the client: Under the bankruptcy code, the answer is ”Yes” to bankruptcy as a means of IRS resolution if you owe income taxes, you filed your returns, and the [...

IRS by the numbers

Posted on July 11, 2008
IRS enforced collection activity continues to heat up.  Compromise settlements are down by 70% while bad debt accounts continue to accumulate.  Here are the numbers: 1.     779,000 taxpayer accounts were assigned to the IRS collection queue. 2.     The number of offers in compromises accepted by the IRS declined by 70% from 2001 (38,643) to 2007 (11,618)...

What do all of these different IRS collection letters mean?

Posted on June 28, 2008
IRS collection letters often look similar, and all seem intimidating. But they are not. I get calls from my clients all the time who have received IRS collection letters and are in a state of anxiety. I ask them to read me what the heading of the letter says, and fax a copy over so I [...

IRS property seizures and auctions for June and July, 2008

Posted on June 14, 2008
The IRS has announced its public auctions of seized taxpayer property for June and July, 2008.  Property being sold includes designer clothing and jewelry in New Jersey, vacant commercial real estate in Cleveland, Ohio and, yes, even the frozen horse semen of three time National Champion Park Stallion MHR Nobility in Fort Collins, Colorado...

How do soaring restaurant costs translate into a IRS collection problem?

Posted on June 08, 2008
This week, the New York Times reported that the cost of a 30-pound sack of rice has doubled, and a 15-pound bag of flour has almost tripled for restaurants.  An article yesterday in The Cincinnati Enquirer had pasta up 130 percent, eggs up 73 percent...

IRS collectors moved to answering questions on economic stimulus refund

Posted on June 04, 2008
The Government Accountability Office (GAO) has outlined the costs to the IRS collection function in implementing President Bush’s Economic Stimulus Refunds.  Of the roughly 2,000 employees in the IRS Automated Collection Service, the GAO report stated that approximately half were moved in this spring from collecting delinquent taxes to answering taxpayer calls about the economic stimulus refund...

IRS employee charged with improper access to taxpayer files

Posted on June 02, 2008
The U.S. Attorney’s Office in the Eastern District of Kentucky has issued a release detailing that an IRS employee at the Covington, Kentucky, IRS Service Center has been charged and arrested with improperly accessing the accounts of taxpayers.   It is alleged that the employee, John Snyder of Cincinnati, who worked in a business return function, accessed the [...

Gas at $4.00 gallon; IRS National Standards lag behind

Posted on May 31, 2008
The Speedway gas station I can see from my suburban office window lists gas at $4.00 gallon. It now costs about $75 to fill-up a F-150 truck these days. At one fill-up per week, that is $325 per month for gas for one family car. The IRS, in reviewing an ability to repay a [...

What happens if the IRS accepts my offer in compromise, but then I have trouble staying current on my taxes?

Posted on May 25, 2008
This is frustrating, and has happened to my clients in the past. The IRS does not want the compromise to default any more than you do. The IRS wants to give you an opportunity to remedy a potential default in an already accepted compromise. There are three primary ways the IRS will [...

?But I thought bankruptcy couldn?t eliminate IRS taxes??

Posted on May 15, 2008
I hear this often when I suggest bankruptcy as a source of resolution.  I heard it again today during a telephone conversation with a new client.  Here is what I explained to the client:    Under the bankruptcy code, the answer is ”Yes” to bankruptcy as a means of IRS resolution if you owe income taxes, you filed your returns, and the [...

Tax Court - providing a level playing field in audits.

Posted on May 13, 2008
I just settled an audit on behalf of a client that had to make its way to Tax Court to be resolved.  The audit was caused by significant losses my client claimed on rental real estate.  But it but morphed into an IRS investigation of her banking statements and deposits...

IRS Financial Statements Revised - Traps Included!

Posted on May 13, 2008
For the first time in 4 years, the IRS revised the financial statements that are required to be used in collection cases.   There are several changes that are noteworthy, and to be careful with when answering.  On Form 433B, used to investigate businesses with IRS problems, the IRS asks who is responsible for depositing payroll taxes...