Offer in compromise: Here’s how to value your income in negotiating with the IRS

If you are considering an offer in compromise with the IRS, the amount of money you make can play a crucial role in your settlement.
In an offer in compromise, the IRS will take what you earn, subtract what you spend (provided it is within government allowances) and arrive out how much money you have every month to repay [...]

IRS allowances: Expenses you may not need to verify in settling your tax debt

When negotiating a resolution to a tax problem, expect the IRS to ask for verification of your living expenses.  After verification, the IRS will likely match the amount you spend to their tables of allowances.
The IRS wants to know how much you can repay them – and the government relies on their standard expense allowances [...]

Knock, knock – the IRS is at my door – how should I handle it?

I received a call this week from a small businessman in Cincinnati who had an IRS Revenue Officer sitting in his living room.  Technically, he did not have to let the Revenue Officer in his house, but he did.  I am glad he called me. 
My client handled the situation correctly – professional, courteous and honest.  This [...]

Five ways to lower the value of your offer in compromise

Being successful in an offer in compromise can depend on how much you know about IRS settlement guidelines.  An offer in compromise is a negotiation – you may have points to make with the IRS that only you can raise. 
Here are five pointers to lower the value of your offer in compromise: 
(1)      Make sure you claim property the IRS cannot take [...]

Does the IRS have the right to see your personal finances before completing a trust fund investigation?

IRS trust fund recovery penalty investigations are a sure source of unease.  Trust fund investigations can place personal liability on you for not paying your employees’ withholding taxes to the IRS.
Adding to the dilemma is an IRS request during the trust fund investigation for a personal financial statement (Form 433A) detailing your assets, income and living expenses.
If the IRS makes a request for a [...]

Why does the IRS ask on Form 433A if you have lived out of the country six months in last 10 years?

It is always important to understand what the IRS is asking, and why.
Resolution of most collection cases involves providing answers to IRS questions about you.  The questions are asked on an IRS financial statement, known as Form 433A.    
One question the IRS asks:  Have you lived out of the country for more than six [...]

Your budget vs. IRS expense allowances – How do you compare?

In determining whether you can repay a delinquent tax liability, the IRS uses its own expense allowances to arrive at your cash flow.  Just because you have the expense does not mean the IRS will allow it.  
In most cases, your housing/utilities and auto operating expenses will exceed IRS guidelines.  Credit card payments are rarely [...]

Assets to always claim as “exempt” on an IRS financial statement (433A)

Internal Revenue Code section 6334(a) shields certain taxpayer assets from the IRS collection powers.  As these assets are beyond the reach of the IRS, it is important to remember to always exclude their value from IRS financial statement Form 433A.
Claim as “exempt” the following:
1.     Tools of the trade or profession up to $3,950 [...]

Can the IRS take my stuff?

In the vast majority of cases, you will not lose any of your stuff to the IRS.  Most clothing and personal household belongings are beyond the scope of the IRS collection power.  Here’s why:
Section 6334(a)(1) of the Internal Revenue Code allows you to keep all of your clothing.  Bear in mind that the tax code [...]

Gas at $4.00 gallon; IRS National Standards lag behind

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 [...]

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