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. Here's the impact of moving ACS employees to answering refund questions: 1. The IRS suspended the issuance of ACS generated levys on taxpayer accounts due to the workforce reallocation. The ... Read More
IRS employee charged with improper access to taxpayer files
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 account information of Cincinnati Reds players, Cincinnati Bengals head coach Marvin Lewis, and actors including Kevin Bacon, Alec Baldwin, Sally Field and Chevy Chase. The charges are important to maintaining the integrity of the tax ... Read More
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 tax liability, uses what it refers to as "Collection Financial Standards" as a guideline to determine what living expenses should be allowed before the IRS is paid. These guidelines include what the IRS will allow for gas, insurance, maintenance and repairs for the operation of a personal vehicle. Here are some current ... Read More
What happens if the IRS accepts my offer in compromise, but then I have trouble staying current on my taxes?
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 consider defaulting an already accepted offer in compromise: 1. You failed to make timely payment of the amount due under the terms of the offer; 2. You have not abided by the compliance provisions of the compromise. The IRS imposes a five year probation as a condition of the compromise. All taxes must be ... Read More
Tax Court – providing a level playing field in audits.
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. Taking a case to Tax Court to resolve IRS audits is not appropriate in every case, but is very helpful when an impartial, outside Federal judge seems to be necessary. In the audit, the IRS was focused on making changes to the return. Once in Tax Court, the playing field leveled out, and the IRS became a little more ... Read More