COLLECTION

After the Bankruptcy Abuse Prevention and Consumer Protection Act you thought it couldn't get any worse for your tax delinquent clients? Wrong again. The latest Congressional gift to the IRS Collection Division is Section 509 of the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA). One must at least give grudging credit to the Congress for creative captioning, even though the substance of the law has little...

The last article in this series on dealing with the Collection Division addressed Installment Agreements -- arrangements through which tax debts can be resolved by means of monthly payments. Some folks, however, owe so much that an installment agreement is not a practical solution. Interest and penalties can accrue so quickly that the liability actually increases, despite the monthly payments. For such clients, one option...

This is the fourth in a series of articles about dealing with the IRS Collection Division. In previous articles we discussed innocent spouse relief, installment agreements, and offers in compromise. All of these are useful techniques for dealing with tax liabilities which should not be collected from your client, or which exceed your client's ability to pay. But there are situations in which these devices are unavailable,...

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...

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...

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....

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...

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...