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 [...]

IRS Commissioner Douglas Shulman on IRS collections during recession

Today IRS Commissoner Douglas Shulman gave an interview on National Public Radio (NPR) about how the IRS will be dealing with hardship cases during these difficult economic times.
Shulman did not addresss what is really holding up IRS collections – an offer in compromise system that accepts only 25% of the offers it receives.  The IRS collection guidelines [...]

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 [...]

Is there such a thing as a “hardship status” with the IRS?

If you cannot pay your delinquent taxes because of an economic hardship, the IRS can suspend collection efforts against you.  This does not mean your debt is forgiven; just that the IRS will defer collection and not take your wages or bank account.
Internal Revenue Service Policy Statement 5-71 permits hardship status on IRS accounts, as [...]

Can the IRS conduct a collection interview at your house or business?

IRS Revenue Officers continue to become more aggressive in the field. Here is a new approach to look for:
I had a recent case in which a Revenue Officer sent my client a notice stating that that there would be an interview at my client’s house.  These meetings usually take place at an IRS office.  It [...]

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 [...]

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

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.”  The Internal Revenue Manual makes these [...]

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