Melbourne Tax Attorneys

Having unresolved problems with the IRS can lead to severe consequences. Failing to address the matter can result in the IRS putting a levy (seize) your assets - from your paycheck or bank account(s).

There are many ways to keep the consequences to a minimum. The first is called Offer in Compromise. This is a Congress-mandated program that allows taxpayers to make an offer to settle their tax debts in full. The offer can be less than the full amount but is calculated by the IRS. Once there is an offer in place, your property and wages are no longer seizable. This offer can be in one of three basic forms.

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.

Doubt as to Collectability is the second type of offer. This is the most common type of offer and what people typically think of when they think of an Offer in Compromise.

The third type of offer is called 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 constitutes the second basic way to resolve IRS difficulties. It is based on the time limit for the collection of income tax. Generally ten years fro the date of the assessment of the tax, there is a Collection Statute Expiration Date (CSED). Sometimes, you can simply sit and wait.

When a taxpayer is deemed by the IRS to have an inability to pay, this third way of settling the debt can be implemented. 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. 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.

The fourth alternative is to set up an installment agreement of payment plan. This is fairly straightforward.

If you are in Chapter 13, a bankrupt status, you may also obtain tax debt relief. 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.

The sixth of your options is penalty abatement. In penalty abatement, quite simply, you are asking for those to be cancelled. You must still fully pay your original tax debt.

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.

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.