Modesto Tax Problem

If you have unresolved issues with the IRS, you can be in for a bit of trouble. 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. The first method we will look at is called Offer in Compromise. Taxpayers have the option to settle their tax debt in full via 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. Your property or wages will no longer be seizable once there is an offer in place. This offer can be in one of three basic forms.

The first of these is Doubt as to Liability. This type of offer can only be made when the taxpayer questions whether he lawfully owes the money at all.

The second type of offer is called Doubt as to Collectability. When you think of an Offer in Compromise, this is the most common type of offer you would make.

The name of the third type of compromise is Effective Tax Administration. It is a rare event when the IRS 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.

The second basic way of resolving your IRS problems is 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. Sometimes you can just wait for this date to elapse.

A third way of resolving IRS problems occurs when a taxpayer has no ability to pay. The debt, in this case, is put into a status called Currently Not Collectible. This is also referred to as Status 53, so named because the number on the screen that an IRS employee sees for this procedure is: 53. 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 to handling unresolved IRS issues is to set up an installment agreement (payment plan). This is just what it sounds like.

If you are in Chapter 13, a bankrupt status, you may also obtain tax debt relief. In this case, some of the taxes and penalties owed may become discharged.

Penalty abatement is your sixth option. In penalty abatement, quite simply, you are asking for those to be cancelled. The original tax must still be fully paid.

The last method is Innocent Spouse Relief. Failure of a current or former spouse to file or pay taxes can be forgiven.

When you are ready to resolve your IRS problems, you are well advised to seek professional 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.