Melbourne Tax Advice

Having unresolved problems with the IRS can lead to severe consequences. 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. 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 taxpayer can make an offer to 'settle for less' and the IRS would determine the amount. Once there is an offer pending, the IRS will not levy your property. This type of offer has three basic forms.

Doubt as to Liability is the first of these. What is in question here is whether the taxpayer lawfully owes the debt.

The second type of offer is called Doubt as to Collectability. When you think of an Offer in Compromise, this is typically what you would refer to.

Effective Tax Administration is the third type of offer. This type of offer is one of the most rarely accepted by the IRS. It is for taxpayers who can afford to pay (at least on paper) but forcing them to do so would be difficult.

Now we will discuss the second basic way of resolving your problem, and it is a well-kept secret. It is based on the 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. 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. When in Status 53, your debt is placed in 'hardship' category, and the collection statute continues to count down.

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

If you are in bankruptcy, you may be eligible for the fifth 'method' of obtaining IRS tax debt relief. If you have filed for bankruptcy, some of the taxes and penalties are dischargeable and those that can't be may be paid without interest.

The sixth of your options is penalty abatement. In penalty abatement, quite simply, you are asking for those to be cancelled. 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.