Tax Collections Issues

dealing with the IRS

Clearly the earlier a taxpayer takes positive action to correct a situation, the better.  Often times it will be beneficial to retain a tax professional to represent the taxpayer.  Dealing with the Collections Division is a specialty in and of itself, and the actual numbers of CPAs or attorneys that practice in this area is quite small.  Like any other discipline, knowing the ins and outs of practice can make all the difference in the World.

This site discusses some of the issues that a taxpayer with a tax collection problem may face, and some possible solutions that an experienced tax professional may seek.

Clearly, when a taxpayer is contacted by the Internal Revenue Service about a tax return which was never filed, a taxpayer should immediately retain a tax professional to represent him.  Tax professionals should tread very lightly in this arena, and look for signs of possible criminal investigation or the possibility of criminal investigation, and refer the client to a criminal tax attorney, when indicated. Only an attorney is equipped with the shield of confidentiality in a criminal matter.  An experienced CPA or Enrolled Agent will know when a referral to an attorney is merited.

Once the background of the situation has been survey by a tax professional, the unfiled returns should be prepared and filed, even if the client cannot pay the tax in full at the time of filing the returns.

For more information on failure to file tax returns, click here.

Since failure to timely file a tax return which is required by law to be filed can be a crime, it is important that all tax returns be prepared and filed.   If the taxpayer is unable to pay the tax in full, the return should never the less be filed.  Inability to pay a tax is not, in and of itself, a crime.

Clearly, when a taxpayer is contacted by the Internal Revenue Service about a delinquent tax return, a taxpayer should immediately retain a tax professional to represent him.  Tax professionals should look for signs of possible criminal investigation or the possibility of criminal investigation, and refer the client to a criminal tax attorney, when indicated. Only an attorney is equipped with the shield of confidentiality in a criminal matter.  An experienced CPA or Enrolled Agent will know when a referral to an attorney is merited.

For more information on delinquent tax returns, click here.

For more information on payroll tax issues, click here.

Generally speaking, a taxpayer can have a levy lifted -- removed -- with the proper request.

For more information on levy actions, click here.

A Federal Tax Lien will generally appear on a taxpayer's credit report, and may adversely affect one's ability to sell property or obtain credit, but does not, in and of itself, actually seize property.

For more information on tax liens, click here.

While results can vary widely, and differ greatly depending upon the type of tax due, and whether the taxpayer is a business or individual, the monthly payment is based more on ability to pay, and less on the actual tax due.

For more information on installment payment plans, click here.

An offer is presented that provides the government with a sum of money -- often pennies on a dollar -- in full settlement of all tax debts owed.  The successful offer is calculated based upon the net assets of the taxpayer and the taxpayer's anticipated monthly cash flow over the next few years.

For more information on offer in compromise, click here.

Bankruptcy might be an option for taxpayers with extreme debt, and many taxes are eligible for discharge in bankruptcy.

In addition, there are very specialized accounting and tax considerations for businesses and individuals in a bankruptcy case -- Chapter 7, 11 or 13.

Certainly these matters indicate the need for a specialist.

At Gill & Company, we bridge the gap between disciplines, and assist bankruptcy counsel, where indicated, and work with our clients in planning for bankruptcy, and otherwise assist in areas of "insolvency accounting and taxation.

For more information on bankruptcy, click here.

For more information on collections statute of limitations, click here.

When a taxpayer has a tax collection problem, it is not the time to experiment.  Having an effective representative will take the emotions out of the process, and allow the representative to concentrate on closing the file at the IRS office, and helping the taxpayer regain productivity.

There is a choice when choosing a tax professional.   Attorneys, CPAs and Enrolled Agents are recognized by the IRS as authorized to practice in this arena.  Others can also represent certain taxpayers.  Often times, the choice of professional is determined by factors such as experience and credibility, rather than solely based upon credentials.

For more information on  retaining a tax professional, click here.

• IRS collection procedures
• IRS collections strategies
• Taxpayer Bill of Rights II
• Collections appeals