Denver Tax Advice

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.

You can keep consequences to a minimum in any one of a number of ways. 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. The offer can be less than the full amount but is calculated by the IRS. Your property or wages will no longer be seizable once there is an offer in place. The offer can be one of three different types.

Doubt as to Liability is the first. One makes this type of offer only when there are questions as to whether the debt is lawfully owed.

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

The third type of compromise is called Effective Tax Administration. This is a rare offer in terms of acceptance by the IRS. 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. There is a time limit for the collection of income tax by the IRS. This is called the Collection Statute Expiration Date (CSED) and is generally ten years from the date of the assessment of the tax. It is sometimes possible to wait for the elapse of this date.

This third method happens if the IRS determines that a taxpayer has no ability to pay. 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. During the time you are in this status, your debt is in the hardship category and the collection statute continues to run.

Setting up a payment plan or installment agreement is the fourth alternative. This is just like any other payment plan you might be familiar with.

The fifth method of obtaining relief from IRS issues is available via bankruptcy (in Chapter 13). If you have filed for bankruptcy, some of the taxes and penalties are dischargeable and those that can't be may be paid without interest.

Penalty abatement is the sixth of your options. This means you are requesting that penalties be cancelled. You still must pay the original tax.

The last method is Innocent Spouse Relief. This, too, is what it sounds like - if your current or former spouse failed to report income, you may be entitled to relief.

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.