The Statute of Limitations on collection

For those beleaguered souls for whom nothing else works, the only hope of relief from unmanageable federal tax debts may be the statute of limitations on collection. In theory, the IRS has only 10 years from the date of assessment to collect. However, this 10-year limitation is shot through with so many exceptions, waivers and overlapping extensions that in all but the simplest of cases computing the correct "collection...

Healing self-inflicted wounds – Representing nonfilers

Never do today what you can put off until tomorrow . . . All of us procrastinate. But some take things to dangerous extremes -- putting off the filing of tax returns for a few years, or even many years. The IRS estimates that each year some ten million people fail to file their tax returns. What do you do with the new client who walks in and explains that he hasn't filed returns for three, six or ten years? This article...

The Trust Fund Recovery Penalty

The road to Hell, so we're told, is paved with good intentions. And on the road to Hell, failure to pay employment taxes is definitely the fast lane. The resulting "trust fund recovery penalty" can spell disaster for the hard-pressed entrepreneur, corporate manager, director, officer, or employee who falls victim to it. This article will outline the exposure to the penalty, the procedures for contesting the penalty, and...

Enhanced opportunities to appeal collection actions

As all of us who represent taxpayers before the IRS Collection Division know only too well, the Revenue Officer handling a particular client's case may not agree with our ever so reasonable suggestions about what should be done. In these situations, thanks to the IRS Restructuring and Reform Act of 1998, we now have greatly expanded rights to bypass the Revenue Officer and pursue an independent administrative appeal....

The expanding reach of the federal tax collector – The craft and drye decisions

Nothing in life is certain but death and taxes, and never more so than now. The reason is that two recent Supreme Court decisions expand the reach of the federal tax collector, and some assets which were previously safe are now in jeopardy. This article will discuss several situations in which the IRS now enjoys enhanced powers to proceed against the property of delinquent taxpayers. Specifically, in the paragraphs...

Tax collection problems of military personnel

Many people with tax collection problems feel like they're in a combat zone, besieged by battalions of battle-hardened IRS Revenue Officers. But many tax practitioners, particularly those of us here in the Washington metropolitan area, will encounter clients who are or have recently been in real combat zones -- places like Iraq, the Persian Gulf, Afghanistan, Kosovo, Kuwait, Bahrain, Qatar, the United Arab Emirates, and...

Treatment of pension benefits and retirement assets

Knowing how the IRS Collection Division treats pension benefits and retirement savings is an important part of understanding a client's situation and helping the client plan a course of action to resolve his or her unpaid tax liabilities. Pension benefits and retirement savings often constitute a client's most valuable assets, and are viewed as a safety net. For that reason, many assume that such assets are beyond the...

Letter regarding the IRS announcing a 3-week extension of the offshore account voluntary disclosure program

The IRS today announced a very brief extension of the current initiative aimed at facilitating the disclosure of previously hidden offshore accounts. The settlement program was due to expire on September 23rd, but it has now been extended to October 15th, giving taxpayers another three weeks to come forward with information about their previously undisclosed foreign bank and financial accounts. •Here’s a link to...

Dealing with tax debts in bankruptcy after the BAPCPA

The intended beneficiaries of the humorously titled "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" (BAPCPA) were the big banks and credit card companies -- lobbying pays. The new law also helps those with alimony and child support awards. But a third winner was your friendly, neighborhood tax collector. In general, the BAPCPA makes bankruptcies more cumbersome and expensive. But it also exempts certain...

Tax Fraud Investigations – A Procedural Road Map – Part II

Joseph M. Jones I. Introduction In the last issue of the Corporate Criminal Liability Reporter, Spring 1988, we described the process involved in IRS criminal investigations -- how they begin, the cast of players, the investigatory techniques used, and the manner in which evidence is summarized for subsequent use in reviewing and prosecuting the case. In this second of two articles we will attempt to identify those...

Tax Fraud Investigations – A Procedural Road Map – Part I

Joseph M. Jones I. Introduction An IRS fraud investigation is a harrowing experience, not only for the corporate officers, directors and employees who are the subject of the investigation, but for the corporation's legal advisors as well. The process many begin innocuously with a routine civil tax examination, or with the jolting arrival of a grand jury subpoena. The investigators may not know exactly what (or who)...

Negotiating Installment Agreements with the IRS Collection Division 

Written for the Maryland Society of Accountants One of the tasks most frequently faced in representing clients before the IRS Collection Division is negotiating an "installment agreement" -- an arrangement under which the taxpayer makes monthly payments against the outstanding tax debt, free of the threat of levy and distraint action. Despite the Service's imposition of a system of miserly national and local expense...
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