Taxation & Estate Planning

Are your social security benefits being levied by the IRS?

Posted on April 19, 2010
I was recently interviewed by a journalist for a story about the hardships of having the IRS levy a retiree’s social security benefits. The reporter, who is courteous and professional, would like to speak to anyone who has been affected by the IRS taking their social security...

Offer in compromise: Here?s how to value your income in negotiating with the IRS

Posted on April 18, 2010
If you are considering an offer in compromise with the IRS, the amount of money you make can play a crucial role in your settlement. In an offer in compromise, the IRS will take what you earn, subtract what you spend (provided it is within government allowances) and arrive out how much money you have every month to repay [...

Collection due process appeals: Stop the IRS collection machinery, negotiate one on one

Posted on April 11, 2010
If you owe the IRS back taxes, it is not always enough to just be “right” when negotiating with the government. You need to be right, but you also need to be in the right place and working with the right IRS person.  This increases the likelihood of a fair and impartial review of your case...

Filing Chapter 7 bankruptcy on the IRS? A step by step guide to getting it done

Posted on April 04, 2010
Chapter 7 bankruptcy is a powerful tool when facing the IRS – it can eliminate an entire tax liability if properly done.  To help with your understanding of how a Chapter 7 bankruptcy can help you end an IRS problem, here is a step by step guide...

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IRS allowances: Expenses you may not need to verify in settling your tax debt

Posted on March 21, 2010
When negotiating a resolution to a tax problem, expect the IRS to ask for verification of your living expenses.  After verification, the IRS will likely match the amount you spend to their tables of allowances. The IRS wants to know how much you can repay them – and the government relies on their standard expense allowances [...

Spouse forged your signature on a tax return? What are your rights?

Posted on March 14, 2010
Your name is signed on a joint tax return, but the signature is not yours.  Your spouse signed your name, but did you agree to it? This becomes a problem if there are taxes owed on the return from your spouse, and the IRS starts coming after you for it...

Defaulted on your IRS installment agreement? Where do you turn now?

Posted on March 07, 2010
You promised the IRS a monthly payment that your budget could no longer bear.  Or you tried so hard to repay your back taxes that you fall behind on this year’s return.  Your intentions are good, but this has caused your IRS installment agreement to default...

Tax liens on real estate: Filed where I live or where my property is located?

Posted on February 28, 2010
Here is a situation from a reader showing why location counts when it comes to Federal tax lien filings:   The IRS has filed a tax lien against me where I live in Hamilton County, Ohio.  But I own real estate in North Carolina, and there are no tax liens filed against me there...

5 Things You Should Know About the IRS

Posted on February 22, 2010
As a member of the Cincinnati Bar Association, it was exciting to see my article about solutions to today’s IRS collection problems in March’s monthly bar journal.    Here is a brief overview of the 5 Things You Should Know About the IRS: (1)     The offer in compromise program is not as advertised on television...

Knock, knock ? the IRS is at my door ? how should I handle it?

Posted on February 14, 2010
I received a call this week from a small businessman in Cincinnati who had an IRS Revenue Officer sitting in his living room.  Technically, he did not have to let the Revenue Officer in his house, but he did.  I am glad he called me.  My client handled the situation correctly – professional, courteous and honest...

IRS problems and have credit card debt? Tips for handling both

Posted on February 08, 2010
I received a call today from an enrolled agent for my help with a client who was having problems not only with the IRS, but credit cards as well.  As usual, my enrolled agent friend got it right – bankruptcy was likely on the horizon for us to take care of both problems simultaneously...

IRS statute of limitations on collection: Be careful, these actions will extend it.

Posted on February 02, 2010
Tax problems do come to an end – the IRS has 10 years to collect a tax debt.   But be careful:  The time the IRS has to collect can be unknowingly extended by you.  The decisions you make in attempting to resolve your tax problem can impact when it ends...

What is the impact of successive bankruptcies on the tax discharge timing rules?

Posted on January 27, 2010
A great question from a reader about discharging taxes when \ successive bankruptcies are filed: Mr. Levy – I hope you can help me.  I owe back taxes and filed a Chapter 13 to repay the IRS.  The Chapter 13 was dismissed because I could not keep up with the payments...

Five ways to lower the value of your offer in compromise

Posted on January 22, 2010
Being successful in an offer in compromise can depend on how much you know about IRS settlement guidelines.  An offer in compromise is a negotiation – you may have points to make with the IRS that only you can raise.  Here are five pointers to lower the value of your offer in compromise:  (1)      Make sure you claim property the IRS cannot take [...

Does the IRS have the right to see your personal finances before completing a trust fund investigation?

Posted on January 17, 2010
IRS trust fund recovery penalty investigations are a sure source of unease.  Trust fund investigations can place personal liability on you for not paying your employees’ withholding taxes to the IRS.   Adding to the dilemma is an IRS request during the trust fund investigation for a personal financial statement (Form 433A) detailing your assets, income and living expenses...

What?s the difference between an IRS tax lien and a tax levy?

Posted on January 11, 2010
The IRS has two ways to collect back taxes:  a Federal tax lien and tax levy.  A tax lien is different from an IRS levy – the lien does not result in the IRS taking your property from you.  That is done by levy.    You have rights to defend the filing of a lien, and prevent the issuance of a levy...

Will the IRS take my house? Seize my car?

Posted on January 07, 2010
One of the most common concerns about owing the IRS back taxes is that they will show up one day and take your house or car from you.  No matter what the IRS may tell you or what you may have heard, it is very unlikely the IRS will levy on your house, car or furniture...

IRS installment agreement vs. Chapter 13 bankruptcy: Which repayment plan saves you the most?

Posted on January 02, 2010
Trying to repay the IRS in an installment agreement can be difficult.  The interest and penalties the IRS charges doubles the original amount of tax you owe every five years. Your installment agreement may keep the IRS at bay, but your tax liability does not get paid off...

Can the IRS take my property without telling me first?

Posted on December 28, 2009
In most every case, the IRS cannot take your property until they send you a letter stating their intentions.  This letter – called a “Final Notice of Intent to Levy” - is the government’s last attempt to reach you before they start levying your wages, bank accounts or other property...

Offer in compromise: Avoiding an unseen IRS settlement cost

Posted on December 22, 2009
In today’s difficult economic times, every dollar counts.  An offer in compromise may help, but for many there is a hidden cost – lost tax refunds.   Tax refunds increase the amount you pay to the IRS in an offer in compromise.    Here’s why:  The terms of an offer in compromise requires the IRS to keep your tax refund for [...

Does bankruptcy stop IRS audits?

Posted on December 19, 2009
Bankruptcy is a powerful tool in solving IRS problems – but can it stop the IRS from auditing you? A centerpiece of bankruptcy law is the concept of an “automatic stay.”    The automatic stay stops creditors from calling and writing to enforce or collect a debt from you...

Self-employed? All IRS levies are not created equal

Posted on December 09, 2009
IRS levies on those who are self-employed are serious, but it may not always be as bad as it seems.  For those who are self-employed, a levy reaches only what you have a fixed and determinable right to. In other words, the IRS stands in your shoes.  Whatever you have a right to at the time of levy, [...

Tips for dealing with Automated Collection Service

Posted on December 01, 2009
ACS can be intimidating – big, impersonal and far away on a 1-800 number. Most IRS collection letters are sent from an Automated Collection Service Center (ACS).  ACS handles the incoming calls from the collection notices. It is responsible for levy releases, lien determinations and setting up installment agreements...

Ads for IRS problems: Be informed, get the facts

Posted on November 23, 2009
Pennies on the dollar!  Act now before its too late! The laws may change! During first consultations, my clients often have questions about advertisements they have seen on television or heard on the radio about the IRS offer in compromise process.  Here is my response: The IRS offer in compromise rejection rate is 75%...

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...

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...

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