I am fortunate that the National Association of Enrolled Agents has invited me to their annual Tax Institute on August 9 -11, 2009 in Baltimore, Md. Here are the outlines for the topics I will be speaking on: IRS collections Tax bankruptcy Trust fund recovery penalty For more information on the NAEA and the National Tax Practice Institute, visit their website at www.naea.org. ... Read More
I owe back taxes to the IRS. Now what? Part I of II
Every IRS problem has a solution. Some solutions are quick. Other workouts require more creativity, planning and patience. When meeting with a client - or during an initial telephone consultation - I like to discuss the following options and how each might fit in towards the ultimate goal of a fresh start: Offer in compromise. This is the first option on every one's mind. But it can be difficult to obtain an compromise under current IRS procedures - it is not for everyone. Many compromises are initially rejected by the IRS and have to be appealed. And with IRS expense allowances ... Read More
I owe back taxes to the IRS. Now what? Part II of II
In addition to offers in compromise, bankruptcy, and uncollectible (See Part I, above), here are three more solutions to owing back taxes to the IRS: Statute of limitations on collection. The IRS has 10 years to collect unpaid taxes - starting from when the IRS puts the tax liability on its books (this is usually when a tax return is filed or an audit is completed). The limitations period is is the ultimate ace in the hole and is not to be squandered - there is an end date to your IRS problem. Getting there requires properly calculating the end date and navigating getting to the goal ... Read More
Who do you pay first – IRS debt vs. credit cards?
It is not unusual for my clients to find themselves indebted to two masters - the IRS and credit card companies. Both want a piece of the pie, but there is not enough to go around. So who do you pay first? How do you make both go away? The IRS comes first. Here's why: Unpaid credit cards can be annoying - harassing debt collectors calling for money. But it is important to remember that credit card companies and debt collectors cannot take your wages, bank accounts or property. That can only be done by the filing of a lawsuit, which the debt collector cannot do (they are not ... Read More
Bankruptcy as leverage in an offer in compromise
On more than one occasion I have used the possibility of bankruptcy as leverage in reducing the value of a offer in compromise. The possibility of bankruptcy can have a big impact on an IRS offer in compromise. Here's why: 1. A Chapter 7 bankruptcy can "discharge" a tax liability. 2. Any taxes that could be discharged by a potential bankruptcy cannot be collected against the future income of the taxpayer. 3. A critical component of an offer in compromise is an IRS calculation of how much can be collected from future income. 4. If bankruptcy is "Plan B" to an ... Read More