Daytona Beach 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).

There are many ways to keep the consequences to a minimum. The first method we will look at is called Offer in Compromise. This is a Congress-mandated program that allows taxpayers to make an offer to settle their tax debts in full. This is an offer based on amount calculated by the IRS and may be for less than the total amount originally due. Once there is an offer pending, the IRS will not levy your property. This offer can be in one of three basic forms.

The first is Doubt as to Liability. Whether the taxpayer lawfully owes the money at all is what is in question here.

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 third type of offer is called 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.

There is a fairly well-kept secret that constitutes the second basic way to resolve IRS difficulties. The IRS has a 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. Sometimes, you can simply sit and wait.

When a taxpayer is deemed by the IRS to have an inability to pay, this third way of settling the debt can be implemented. In this case, the taxpayer's account can be placed 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. 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). This is fairly 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.

Penalty abatement is another choice (the sixth we discuss here). In penalty abatement, quite simply, you are asking for those to be cancelled. You still owe your original debt.

The last of our seven methods is Innocent Spouse Relief. 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.

Regardless what your particular situation is, you are well advised to consult a professional to help implement any of these methods.

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.