Denver Tax Settlement

There can be severe consequences to having unresolved problems with the IRS. The IRS is allowed to levy (seize) funds from your paycheck of bank account(s).

You can keep consequences to a minimum in any one of a number of ways. 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 can be less than the full amount but is calculated by the IRS. Once there is an offer pending, the IRS will not levy your property. There are three different types of offers.

The first 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.

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

The name of the third type of compromise is Effective Tax Administration. The IRS rarely accepts this type of offer. It is for taxpayers who can afford to pay (at least on paper) but forcing them to do so would be difficult.

There is a second way of resolving IRS issues, and it is actually a fairly well-kept secret. There is a time limit for the collection of income tax by the IRS. 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.

When a taxpayer is deemed by the IRS to have an inability to pay, this third way of settling the debt can be implemented. 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 to handling unresolved IRS issues is to set up an installment agreement (payment plan). It is straightforward.

Another method of obtaining relief from IRS tax debt is via bankruptcy. Some of the taxes and penalties or interest levied by the IRS may be discharged in this case.

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.

The last of our seven methods is Innocent Spouse Relief. This, too, is what it sounds like - if your current or former spouse failed to report income, you may be entitled to relief.

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.