St. Paul Tax Advice

You do not want to have unresolved problems with the IRS. If one does not address the matter, the IRS can eventually levy (seize) 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. There is a Congress-mandated program that allows taxpayers to try to make an offer to settle their tax debt in full. This is an offer based on amount calculated by the IRS and may be for less than the total amount originally due. Your property or wages will no longer be seizable once there is an offer in place. This offer can be in one of three basic forms.

Doubt as to Liability is the first. This type of offer can only be made when the taxpayer questions whether he lawfully owes the money at all.

The second offer type that comes under this category is Doubt as to Collectability. 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. This is a rare offer in terms of acceptance by the IRS. 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 must collect the income tax within a specific amount of time. 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.

The third way to handle IRS difficulties applies if a taxpayer has no ability to pay (according to the IRS' analysis). When this happen, the taxpayer's account goes into Currently Not Collectible Status. Status 53 refers to the screen number of Currently Not Collectible Status at the IRS. During the time you are in this status, your debt is in the hardship category and the collection statute continues to run.

The fourth alternative is to set up an installment agreement of payment plan. You are probably already with this, it is straightforward.

The fifth way you can be deemed eligible for IRS tax relief debt is when you are in bankruptcy. 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.

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

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