Minneapolis Tax Problems

There can be a bit of trouble if you have unresolved issues with the IRS. 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 a number of ways to keep this from happening. An Offer in Compromise is the first method we will discuss. This is a Congress-mandated program that allows taxpayers to make an offer to settle their tax debts in full. The taxpayer can make an offer to 'settle for less' and the IRS would determine the amount. Having an offer in place, or pending, will cease the levy on your property or wages. There are three basic forms of this type of offer.

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

The second type of offer is called Doubt as to Collectability. This is the most common type of offer made in an Offer of Compromise.

Effective Tax Administration is the third type of offer. It is a rare event when the IRS accepts this type of offer. In this type of settlement, usually the taxpayer is able to make the payment, but for some reason it is determined that it would be difficult to implement payment.

Now we will discuss the second basic way of resolving your problem, and it is a well-kept secret. The IRS must collect the income tax within a specific amount of time. The Collection Statute Expiration Date (CSED) usually occurs ten years from assessment of the original tax debt. Sometimes, you can simply sit and wait.

This third method happens if the IRS determines that a taxpayer has no ability to pay. Currently Not Collectible is the name of the status of this situation. It is also called Status 53, as the number 53 corresponds to the screen number that an IRS employee sees upon not collectible status being implemented. Taxpayer's accounts are placed in hardship status for a year or so at a time, but the collection statute continues to run.

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

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 are dischargeable, and those that are not may be paid without interest.

Penalty abatement is another choice (the sixth we discuss here). Cancellation of any penalties is what this actually is. You still must pay the original tax.

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.

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.