Archive for December, 2007

Delayed IRS Collection and Currently Not Collectible Status

Saturday, December 29th, 2007

Delayed IRS Collection
IRS policy states that whenever the taxpayer raises a question or presents information creating reasonable doubt as to the correctness or validity of an assessment, “reasonable forbearance” will be exercised with respect to collection efforts as long as the interests of the government are not jeopardized.

This does not mean the taxpayer’s debt will be forgiven, or a tax lien will not be
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Tax Problem FAQ: What is an IRS Installment Agreement?

Saturday, December 29th, 2007

INSTALLMENT AGREEMENTS AND IRS PAYMENT PLANS
The IRS will always accept some type of payment arrangement for past due taxes. In order to qualify for a payment plan with the IRS you must meet the following rules and provide the IRS with this information:
You must have filed all tax returns (It’s OK to owe money but you must file).
You will need to disclose all assets owned including all
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Filing Unfiled Returns and Replacing Substitute for Returns

Saturday, December 29th, 2007

Filing unfiled returns and replacing substitute for returns
Every year, tens of thousands of taxpayers fail to file required tax returns. The act of not filing usually contributes to more significant problems with the passing of time.
While there are many reasons why a taxpayer has not filed a tax return, you need to aware of the following:

Failure to file tax returns may be construed as a
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Tax Liens and Levies

Saturday, December 29th, 2007

Tax Liens and Levies
Tax Liens
A lien is an encumbrance- it does not result in the physical transfer of the taxpayer’s property to the IRS.
Tax Levies
A levy allows the IRS to seize the taxpayer’s property.
Levies are divided into two categories.

The first category includes tangible real and personal property owned by the taxpayer
The second category includes third parties who hold
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Unfiled Returns – Delinquent Tax Returns

Saturday, December 29th, 2007

Many taxpayers fail to file required tax returns for many reasons. The taxpayer must be aware that failure to file tax returns may be construed as a criminal act by the IRS. This type of criminal act is punishable by one year in jail for each year not filed. Needless to say, it’s one thing to owe the IRS money but another thing to potentially lose your freedom for failure
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Statutes of Limitations – Taxpayer’s rights

Saturday, December 29th, 2007

Statutes of Limitations – Taxpayer’s rights
Two perspectives-
From the government’s perspective, the statute of limitations restricts the taxpayer’s rights follows:

Claim a refund of overpaid tax
Initiate action to obtain a refund

From the taxpayer’s perspective, the statute of limitations restricts the IRS’s rights as follows:

From collecting a deficiency in tax
Asserting a civil or criminal case

In either case, the statute of limitations provides a date of finality after which actions may not be
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Taxpayer Rights

Saturday, December 29th, 2007

Taxpayer Rights
Taxpayer Rights are specifically addressed in publication 1 (see appendix).
The original Taxpayer Bill of Rights focused on providing taxpayers protection during the audit process-
Original Taxpayer Bill of Rights

Taxpayers have a right to an explanation of the audit process, their appeal rights, and the collection process at the start of an audit.
Taxpayers have a right to
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Tax Problem FAQ: How Do I Know When I Need Professional Tax Help?

Friday, December 28th, 2007

HOW TO DETERMINE WHEN A TAXPAYER NEEDS PROFESSIONAL HELP
Can the taxpayer handle their own case?
A Taxpayer may always represent themselves before the IRS. However, many taxpayers find dealing with the IRS frustrating, time-consuming, intimidating or all of the above.
The disadvantages of a taxpayer representing themselves are many:

The taxpayer does not have the professional’s expertise or know what the options are or how
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Tax Resolution Options and Alternatives

Friday, December 28th, 2007

WHICH IRS TAX SOLUTION OPTION IS BEST? ALTERNATIVES TO AN OFFER IN COMPROMISE

This is a key question which must be addressed. Left to only the IRS or the taxpayer, this question is usually not fully or adequately explored.
There are 10 options commonly employed to resolve a tax collection matter (see full explanations below):

Full pay the tax owed
File unfiled returns to replace Substitute for Returns
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Tax Problem FAQ: How Do I Resolve a Problem with the IRS?

Friday, December 28th, 2007

Working with the IRS To Resolve the Taxpayer’s Problem
One of the most frequent and frustrating aspects of working with the IRS is being transferred from person to person while trying to resolve a tax related problem. Sometimes, this arises as a result of the practitioner either not understanding the central issue or failing to accurately assess which section of the IRS is responsible for addressing the issue. However, the
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Freedom of Information Requests

Friday, December 28th, 2007

Many taxpayers just want to know what type of information is in their IRS file without drawing a lot of attention to themselves. Congress passed legislation (FREEDOM OF INFORMATION ACT) that requires government agencies, including the IRS, to disclose such information when requested.
Freedom of Information documents can also be used to explain why, how, when and where a taxpayer’s IRS problems started. Having this information is helpful as it
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Taxpayer Advocate

Friday, December 28th, 2007

Taxpayer Advocate
The mission of the Taxpayer Advocate is to:

Help taxpayers solve problems with the IRS and recommend changes that will prevent those problems from reoccurring
The Taxpayer Advocates have been folded into the National Taxpayer Advocate Service to establish an independent channel for taxpayers that are having problems with a specific case.
The Taxpayer Advocate
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IRS Operating Divisions

Friday, December 28th, 2007

IRS Operating Divisions
There are four operating divisions with specific responsibility for taxpayers assigned to that division. Each operating division has Criminal Investigation Division, Appeals, Taxpayer Advocate, and Chief Counsel Personnel attached to the division.
Areas and Territories
The divisions are divided into areas and territories. The Territory Managers and Area Managers have responsibility for practitioner liaison relationships and resolution of issues in the field. The Territory Managers are responsible
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Mission Statement of the IRS

Thursday, December 27th, 2007

The mission of the IRS is to provide America’s taxpayers with top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.
This is in contrast to the previous Mission Statement which read:
The purpose of the Internal Revenue Service is to collect the proper amount of tax revenue at the least cost, serve the public by continually improving
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IRS Overview

Thursday, December 27th, 2007

Due to Congressional concerns over the growing gap between taxes that should have been collected and taxes that were actually collected, the IRS is moving to reallocate its budget resources. Ultimately, this will be evidenced by a significant increase in IRS personnel and potentially third party collection agencies dedicated to support tax compliance and collection efforts. Recent IRS collection initiatives are yielding increases in both levies and tax revenues collected.
On
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