The IRS has two main sources of carrying out its work in collecting taxes: local Revenue Officers and its Automated Collection Service. When you get that call or letter from IRS collections, it's important to know who you are dealing with - and what to expect. The IRS Automated Collection Service - commonly known as "ACS" - is a series of IRS call centers staffed by IRS collection employees. You will never see or meet an ACS employee face-to-face; all of their work is conducted by telephone. And the vast majority of telephone work conducted by ACS is responding to inbound calls, not ... Read More
An IRS letter that you want to receive: Case Closed – Currently Not Collectible
There are many options to resolve an unpaid tax liability - you can agree with the IRS to make monthly installment payments, reach a settlement with an offer in compromise, eliminate the taxes in bankruptcy, or have the IRS place your account in currently not collectible status. Let's focus on currently not collectible. Currently not collectible status occurs when the IRS agrees that you cannot afford to repay the debt, and doing so would create an economic hardship on you. It is forbearance by the IRS, a break from enforcement that can last years. To obtain currently not collectible ... Read More
Life after an IRS audit: What to expect next on the balance owed
Making it through an IRS audit is stressful and anxiety ridden, but for many, it is not the end of the road in dealing with the IRS. Many IRS audits result in balances due. Here are my responses to great questions from a reader about dealing with IRS collections after the audit. I just finished an audit covering three years ... 08-09-10...and owe the IRS over $100,000. My questions are: Will the IRS do a payment plan? Would they take a lump sum and forgive the balance? And will a lien be put on my property as part of the payment negotiations? To begin with, after the IRS concludes the ... Read More
Statute of limitations on collection: Are you unwittingly giving the IRS more time?
The statute of limitations on collection will make most every IRS collection problem come to an end. Internal Revenue Code 6502 puts a limit on how long the IRS can pursue the collection of a tax debt. The timeframe is 10 years from when the IRS puts a liability on its books. But knowing there is an end is really just the beginning. Most sources of IRS resolution - offer in compromise, innocent spouse claim, bankruptcy, collection due process appeal - extend the time the IRS has to collect while they are pending. Be careful: Not succeeding with a plan of resolution will only make a ... Read More
Trust fund recovery penalty: The uncollectible defense
The trust fund recovery penalty can cause financial havoc for anyone involved in a business that did not pay over its employee withholdings to the IRS. Internal Revenue Code Section 6672 allows the IRS to investigate those in the business who were part of the decision not to pay the IRS and hold them personally responsible for repayment. The amount of the trust fund recovery penalty charged to the individuals is equal to the taxes deducted from employee paychecks but not paid to the IRS. Usually, the trust fund recovery penalty involves defending on the basis of liability - developing ... Read More