Sacramento Tax Attorney

There can be a bit of trouble if you have unresolved issues with the IRS. Failing to address the matter can result in the IRS putting a levy (seize) your assets - from your paycheck or bank account(s).

You can keep consequences to a minimum in any one of a number of ways. An Offer in Compromise is the first method we will discuss. To settle their tax debt in full, taxayers can use this Congress-mandated program. The taxpayer can make an offer to 'settle for less' and the IRS would determine the amount. Having an offer in place, or pending, will cease the levy on your property or wages. This type of offer has three basic forms.

The first is called a Doubt as to Liability. The lawfulness of the debt is what is in question here.

The second type of offer is called Doubt as to Collectability. When you think of an Offer in Compromise, this is typically what you would refer to.

The name of the third type of compromise is Effective Tax Administration. This type of offer is one of the most rarely accepted by the IRS. It is for taxpayers who can afford to pay (at least on paper) but forcing them to do so would be difficult.

There is a fairly well-kept secret that is the second basic way of resolving problems with the IRS. It is based on the time limit for the collection of income tax. There is something called a Collection Statute Expiration Date (CSED), which is generally ten years. It is possible to simply wait this out.

This third method happens if the IRS determines that a taxpayer has no ability to pay. In this case, the taxpayer's account can be placed into a status called Currently Not Collectible. It is also called Status 53, as the number 53 corresponds to the screen number that an IRS employee sees upon not collectible status being implemented. Although the collection statute continues to run, a taxpayer's 'debt' is put into hardship status for a year at a time under this Status.

You can set up, as your fourth alternative, a payment plan or installment agreement. This is just what it sounds like.

If you are in Chapter 13, a bankrupt status, you may also obtain tax debt relief. In this case, some of the taxes and penalties are dischargeable, and those that are not may be paid without interest.

Penalty abatement is another choice (the sixth we discuss here). This is cancellation of any penalties that have been incurred. You still must pay the original tax.

The last method is Innocent Spouse Relief. Under specific circumstances, taxes due by a former or current spouse can be forgiven.

When you are ready to resolve your IRS problems, you are well advised to seek professional assistance.

American Tax Lawyer, Darrin T. Mish represents taxpayers all over the United States and on every inhabited continent. His many years of experience in dealing with tax problems benefit clients tremendously. For more information, visit http//americantaxlawyer.com. Darrin may be reached by calling toll free (888) 438-6474.