Denver Tax Advice

There can be a bit of trouble if you have unresolved issues with the IRS. 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. To settle their tax debt in full, taxayers can use this Congress-mandated program. The offer the taxpayer makes can be for less than the full amount owed, but it is calculated by the IRS. Once there is an offer pending, the IRS will not levy your property. The offer can be one of three different types.

Doubt as to Liability is the first of these. The lawfulness of the debt 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 typically what you would refer to.

The third type of compromise is called Effective Tax Administration. These offers are rare, at least in terms of acceptance by the IRS. In this type of settlement, there is usually some difficulty in implementing payment.

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. 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.

When a taxpayer is deemed by the IRS to have an inability to pay, this third way of settling the debt can be implemented. In this case, the taxpayer's account can be placed 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 this status, a taxpayer's accounts are put into hardship for a year or so at a time.

An installment agreement or payment plan can also be initiated. You are probably already with this, it is straightforward.

The fifth way you can be deemed eligible for IRS tax relief debt is when you are in bankruptcy. In this case, some of the taxes and penalties are dischargeable, and those that are not may be paid without interest.

Penalty abatement is another choice (the sixth we discuss here). This is cancellation of any penalties that have been incurred. The original tax must still be fully paid.

Finally, there is what is referred to as Innocent Spouse Relief. Failure of a current or former spouse to file or pay taxes can be forgiven.

When you have had tax issues with the IRS, you are well advised to seek professional assistance for resolving the matter.

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.