Minneapolis Tax Problem

Having unresolved problems with the IRS can lead to severe consequences. Funds from your bank account(s) or paycheck and be levied by the IRS without your even realizing it.

There are many ways to keep the consequences to a minimum. The first method we will look at is called Offer in Compromise. There is a Congress-mandated program that allows taxpayers to try to make an offer to settle their tax debt in full. This is an offer based on amount calculated by the IRS and may be for less than the total amount originally due. The IRS will no longer levy your property once there is an offer pending. There are three basic forms of this type of offer.

The first is called a Doubt as to Liability. Whether the taxpayer lawfully owes the money at all is what is in question here.

The second of these is called Doubt as to Collectability. When you think of an Offer in Compromise, this is the most common type of offer you would make.

Effective Tax Administration is the third type of compromise. It is a rare event when the IRS accepts this type of offer. It is designed for taxpayers whom the IRS feels can afford to pay their debt and applies when there may be some mitigating circumstances.

There is a fairly well-kept secret that constitutes the second basic way to resolve IRS difficulties. The IRS has a time limit for the collection of income tax. The Collection Statute Expiration Date (CSED) usually occurs ten years from assessment of the original tax debt. Sometimes you can just wait for this date to elapse.

The third way to handle IRS difficulties applies if a taxpayer has no ability to pay (according to the IRS' analysis). The debt, in this case, is put into a status called Currently Not Collectible. There is another name for this, Status 53, and it refers to the screen number an IRS employee is looking at. Taxpayer's accounts are placed in hardship status for a year or so at a time, but the collection statute continues to run.

You can set up, as your fourth alternative, a payment plan or installment agreement. This is just like any other payment plan you might be familiar with.

If you are in Chapter 13, a bankrupt status, you may also obtain tax debt relief. Some of the taxes and penalties or interest levied by the IRS may be discharged in this case.

Penalty abatement is another choice (the sixth we discuss here). This is forgiveness by requesting a cancellation of penalties. The original tax debt is still owed.

The last of our seven methods is Innocent Spouse Relief. If your spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits, you may be entitled to relief from an IRS debt.

Although some of these 'methods' may seem simple to implement, you are well advised to seek professional assistance when dealing with the IRS.

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.