Taxation & Estate Planning

5 things to always do when talking to the IRS.

Posted on August 19, 2008
1.     Be courteous and respectful.  You will get nowhere with an angry or condescending attitude, and will just give the IRS reason to come down harder on you.  When your head is in the mouth of the bear, say nice bear. 2.     Abide by deadlines, or call for more time if one can’t be met...

Where do Tax Court judges get their experience from?

Posted on August 17, 2008
Tax Court judges have experience either as former government lawyers or in the private sector at law firms. Of the thirty-two Tax Court judges, thirteen previously worked for the government as IRS lawyers; four were employed by the Department of Justice’s Tax Division...

Agreements to repay IRS debts under $25,000 can be simple and straightforward.

Posted on August 02, 2008
I often have new clients come in who owe the IRS under $25,000 and have the ability to repay the debt with monthly installment agreements.  If we determine they can repay the debt within 60 months, we secure from the IRS a repayment that is called a “streamlined installment agreement...

Doing away with an audit result in bankruptcy.

Posted on July 26, 2008
I received this referral this week about eliminating taxes in bankruptcy: I was audited for my 2005 taxes and owe $55,000 to the IRS as a result.  I owe other debt in addition to the IRS liability, and was considering bankruptcy even before an IRS Revenue Officer came to my house and left her card in [...

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When does the collection of IRS debt expire?

Posted on July 19, 2008
With more money sitting delinquent in the US Treasury than the government has resources to collect, this is a great question.  All of that “quiet” debt does go eventually go away.   The IRS has 10 years to collect a tax debt.  The IRS refers to this as a “Collection Statute Expiration Date...

?But I thought bankruptcy couldn?t eliminate IRS taxes??

Posted on July 15, 2008
I hear this often when I suggest bankruptcy as a source of resolution.  I heard it again today during a telephone conversation with a new client.  Here is what I explained to the client: Under the bankruptcy code, the answer is ”Yes” to bankruptcy as a means of IRS resolution if you owe income taxes, you filed your returns, and the [...

IRS by the numbers

Posted on July 11, 2008
IRS enforced collection activity continues to heat up.  Compromise settlements are down by 70% while bad debt accounts continue to accumulate.  Here are the numbers: 1.     779,000 taxpayer accounts were assigned to the IRS collection queue. 2.     The number of offers in compromises accepted by the IRS declined by 70% from 2001 (38,643) to 2007 (11,618)...

What do all of these different IRS collection letters mean?

Posted on June 28, 2008
IRS collection letters often look similar, and all seem intimidating. But they are not. I get calls from my clients all the time who have received IRS collection letters and are in a state of anxiety. I ask them to read me what the heading of the letter says, and fax a copy over so I [...

IRS property seizures and auctions for June and July, 2008

Posted on June 14, 2008
The IRS has announced its public auctions of seized taxpayer property for June and July, 2008.  Property being sold includes designer clothing and jewelry in New Jersey, vacant commercial real estate in Cleveland, Ohio and, yes, even the frozen horse semen of three time National Champion Park Stallion MHR Nobility in Fort Collins, Colorado...

How do soaring restaurant costs translate into a IRS collection problem?

Posted on June 08, 2008
This week, the New York Times reported that the cost of a 30-pound sack of rice has doubled, and a 15-pound bag of flour has almost tripled for restaurants.  An article yesterday in The Cincinnati Enquirer had pasta up 130 percent, eggs up 73 percent...

IRS collectors moved to answering questions on economic stimulus refund

Posted on June 04, 2008
The Government Accountability Office (GAO) has outlined the costs to the IRS collection function in implementing President Bush’s Economic Stimulus Refunds.  Of the roughly 2,000 employees in the IRS Automated Collection Service, the GAO report stated that approximately half were moved in this spring from collecting delinquent taxes to answering taxpayer calls about the economic stimulus refund...

IRS employee charged with improper access to taxpayer files

Posted on June 02, 2008
The U.S. Attorney’s Office in the Eastern District of Kentucky has issued a release detailing that an IRS employee at the Covington, Kentucky, IRS Service Center has been charged and arrested with improperly accessing the accounts of taxpayers.   It is alleged that the employee, John Snyder of Cincinnati, who worked in a business return function, accessed the [...

Gas at $4.00 gallon; IRS National Standards lag behind

Posted on May 31, 2008
The Speedway gas station I can see from my suburban office window lists gas at $4.00 gallon. It now costs about $75 to fill-up a F-150 truck these days. At one fill-up per week, that is $325 per month for gas for one family car. The IRS, in reviewing an ability to repay a [...

What happens if the IRS accepts my offer in compromise, but then I have trouble staying current on my taxes?

Posted on May 25, 2008
This is frustrating, and has happened to my clients in the past. The IRS does not want the compromise to default any more than you do. The IRS wants to give you an opportunity to remedy a potential default in an already accepted compromise. There are three primary ways the IRS will [...

?But I thought bankruptcy couldn?t eliminate IRS taxes??

Posted on May 15, 2008
I hear this often when I suggest bankruptcy as a source of resolution.  I heard it again today during a telephone conversation with a new client.  Here is what I explained to the client:    Under the bankruptcy code, the answer is ”Yes” to bankruptcy as a means of IRS resolution if you owe income taxes, you filed your returns, and the [...

Tax Court - providing a level playing field in audits.

Posted on May 13, 2008
I just settled an audit on behalf of a client that had to make its way to Tax Court to be resolved.  The audit was caused by significant losses my client claimed on rental real estate.  But it but morphed into an IRS investigation of her banking statements and deposits...

IRS Financial Statements Revised - Traps Included!

Posted on May 13, 2008
For the first time in 4 years, the IRS revised the financial statements that are required to be used in collection cases.   There are several changes that are noteworthy, and to be careful with when answering.  On Form 433B, used to investigate businesses with IRS problems, the IRS asks who is responsible for depositing payroll taxes...

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