Modesto Tax Problem

There can be severe consequences to having unresolved problems with the IRS. The IRS can even seize funds from your paycheck or bank account(s) if you fail to address the matter.

There are a number of ways to keep this from happening. 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. 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 different types of offers.

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

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.

Effective Tax Administration is the third type of offer. The IRS rarely 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 second way of resolving IRS issues, and it is actually a fairly well-kept secret. The IRS must collect the income tax within a specific amount of time. Generally ten years from assessment of the tax, the Collection Statute Expiration Date (CSED) occurs. It is sometimes possible to wait for the elapse of this date.

The third way to handle IRS difficulties applies if a taxpayer has no ability to pay (according to the IRS' analysis). Curently Not Collectible Status is what this type of status is called. When you are in status of Currently Not Collectible, the screen number that the IRS employee looks at is 53 - hence the name. When in this status, a taxpayer's accounts are put into hardship for a year or so at a time.

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 bankruptcy, you may be eligible for the fifth 'method' of obtaining IRS tax debt relief. In this case, some of the taxes and penalties owed may become discharged.

Penalty abatement is your sixth option. This means you are requesting that penalties be cancelled. The original tax must still be fully paid.

Finally, there is what is referred to as 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.

No matter which of these ‘methods' you choose to solve your IRS problems, it is wise to seek special counsel for 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.