Daytona Beach Tax Problem

You do not want to have unresolved problems with the IRS. The IRS is allowed to levy (seize) funds from your paycheck of bank account(s).

There are many ways to keep the consequences to a minimum. Offer in Compromise is the first method we will look at. 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 can be less than the full amount but is calculated by the IRS. Having an offer in place, or pending, will cease the levy on your property or wages. The offer can be one of three different types.

Doubt as to Liability is the first of these. 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.

Effective Tax Administration is the third type of compromise. It is a rare event when the IRS accepts this type of offer. 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 fact that the IRS actually has a time limit during which they must collect their tax. The Collection Statute Expiration Date (CSED) usually occurs ten years from assessment of the original tax debt. You can sometimes simply wait for 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. Curently Not Collectible Status is what this type of status is called. 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. 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 fairly straightforward.

If you are in bankruptcy, you may be eligible for the fifth 'method' of obtaining IRS 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 your sixth option. This means you are requesting that penalties be cancelled. You must still fully pay your original tax debt.

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.