Sacramento Tax Attorneys

There can be severe consequences to having unresolved problems with the IRS. The IRS is allowed to levy (seize) funds from your paycheck of 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. This is a program mandated by Congress that allows taxpayers the option of making an offer to settle their tax debt in full. The offer the taxpayer makes can be for less than the full amount owed, but it 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 of these. This type of offer can only be made when the taxpayer questions whether he lawfully owes the money at all.

The second of these is called Doubt as to Collectability. Within the Offer of Compromise Category, this is the most common.

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. In this type of settlement, it is determined that the taxpayer can afford to pay but that there would be some difficulty in the procedure.

There is a fairly well-kept secret that is the second basic way of resolving problems with the IRS. It is based on the fact that the IRS actually has a time limit during which they must collect their tax. Generally ten years fro the date of the assessment of the tax, there is a Collection Statute Expiration Date (CSED). You can sometimes simply wait for 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. When in Status 53, your debt is placed in 'hardship' category, and the collection statute continues to count down.

The fourth alternative to handling unresolved IRS issues is to set up an installment agreement (payment plan). This is just what it sounds like.

The fifth method of obtaining relief from IRS issues is available via bankruptcy (in Chapter 13). Some of the taxes and penalties or interest levied by the IRS may be discharged in this case.

Penalty abatement is your sixth option. Cancellation of any penalties is what this actually is. The original tax must still be fully paid.

Innocent Spouse relief is also possible. 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.