Archive for Back Taxes Owed
December 4, 2012 John R. Dundon II Back Taxes Owed, Income, Intent To Levy, Intent To Lien, IRS Centralized Insolvency, IRS Collections, IRS Enforcement, IRS Levy, IRS Lien, Social Security, Social Security Tax, Tax Court, Uncertain Tax Position The distinction of how this is possible distills down to understanding the nuanced difference between a ‘Continuous’ and a ‘One Time’ IRS tax levy.
Under Code Sec. 6331(h) once a tax levy is approved, the effect of the levy on specified payments received by a taxpayer is continuous from the date the levy is first made until the levy is released. A continuous levy attaches to up to 15 percent of any specified payment including social security payments.
However as a one-time levy, the 15 percent cap on continuing levies under Code Sec. 6331(h) does not apply to monthly social security benefits allowing the IRS to take more than 50 percent of the taxpayer’s monthly benefit in Bowers v. U.S., 2012 PTC 133 (C.D. Ill. 5/22/12).
In the Bowers case we learn that according to the court, the IRS has discretion to approve continuous levies under either Code Sec. 6331(a) or (h) however it is not required to attach a continuous levy even where the type of property might be eligible for one.
The court stated in this case that social security payments represented a present, vested right to receive benefits in fixed monthly payments for the taxpayer’s life and the amount of the benefits are based upon a formula that included prior wages.
Because the social security benefits were not contingent on the performance of any additional services the tax levy could attach to the entire stream of Social Security payments as a one-time levy under Code Sec. 6331(a) and (b). Thus, the levy was considered a one-time levy.
As a one-time levy, the 15 percent cap on continuing levies under Code Sec. 6331(h) does not necessarily apply.
I think the lesson learned here is that if you are having your social security levied try to have it levied under IRC 6331(h) as a continuous levy subject to the 15% maximum threshold..
August 2, 2011 John R. Dundon II Appeals & Audit Resolution, Back Taxes Owed, Currently Not Collectible, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement Basically the simple answer is file your tax forms with both the US Federal government and applicable state governments. Start by filing the previous 3 years of income tax returns ASAP.
It is possible the IRS may have already filed returns for you. Under Section 6020(b) of the Internal Revenue Code, the IRS may file a Substitute for Return when you do not file a return on your own. These types of returns are prepared at the highest tax rate. You may be eligible for a lower rate if you have dependents or itemized deductions to claim, are eligible for the Earned Income Tax Credit, etc.
The only way to get the maximum benefit is to file a return. To receive credit for your future Social Security benefits from self-employment income, you must ensure that income is filed with the IRS. You only have three years to file and claim a refund of overpaid withholding. If you are due refunds, filing the returns will close your case. Under current law, refunds more than three years old are lost and cannot be applied to other tax due. Penalties and
interest may apply if you owe taxes.
The failure to file penalty is a maximum of 25 percent of the tax due on each return. Penalties and interest can drastically exceed the tax due on returns more than three years old.
Paying your tax debt - Online Payment Agreements are available should you find that you owe. In addition, you can also make an Offer in Compromise. However, you should be aware that all legally required tax returns must be filed in order to be eligible for an OIC.
Note: Refunds less than three years old will be applied to any amounts still owed to the IRS and may be used to satisfy unpaid child support or past due federal debts, such as student loans
June 28, 2011 John R. Dundon II Amended Tax Return, Appeals & Audit Resolution, Back Taxes Owed, Installment Agreement, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Centralized Insolvency, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement Collection of federal taxes starts with an assessment of tax due. The assessment serves two functions.
It is the government’s mechanism for keeping records and recording a liability.
The assessment, authorizing the government to collect, is equivalent to the final judgment that a general creditor must obtain to collect a debt.
The IRS makes assessments in a variety of ways and times depending on what prompts it. The Service makes summary or automatic assessments of tax when a taxpayer files a return showing a tax liability, or submits payment.I.R.C. §§ 6201(a)(1), 6213(b)(4). The taxpayer consents to the Service assessment of the amount shown on his return through his submission thereof. If there is a balance due after the making of an assessment, the Service will mail a notice to that effect. The Service also makes a summary assessment when it records most penalties, especially those calculated from the information voluntarily supplied on the tax return. I.R.C. § 6665. For example, if a taxpayer files a return two months late reflecting a balance due of $10,000 tax, the Service, without examining the return, can and will automatically assess the $10,000 and a late filing penalty, and send the taxpayer a notice requesting payment. This too will generate a balance due notice.
Deficiency assessments arise only after a lengthy process of administrative and judicial determination of a taxpayer’s correct liability that begins with the Service examining a tax return (or filing one on behalf of a delinquent taxpayer) and ends with a settlement between the parties or a decision of the court. I.R.C. § 6211 et seq. The process is marked by notices called 30-day letters or a 90-day Notice of Deficiency. As deficiencies are not self-determined, as the tax on a return is, the government may not assess, and therefore may not begin to collect, the amount asserted by the government until the matter is finalized.
In rare cases, the Service can also make termination or jeopardy assessments of any tax due if the government believes collection of the tax is in jeopardy (e.g., government believes the taxpayer is planning to flee the country).I.R.C. §§ 6851, 6861. When the government believes a jeopardy situation exists, Congress has given special permission for the Service to discard the normal pre-assessment and pre-collection procedural safeguards. Instead, the government may assess and collect tax in an expedited manner, and the taxpayer can only challenge the determination of the existence of a jeopardy situation (see I.R.C. § 7429) and of the underlying tax liability afterwards. I.R.C.§§ 6851(b), 6861(b).
Termination and jeopardy assessment rarely occur because the facts necessary to override the normal procedural safeguards prior to assessment are not normally present.
June 26, 2011 John R. Dundon II Appeals & Audit Resolution, Back Taxes Owed, Bankruptcy, Cancelled Debt, Self Employ, Small Business, Statutory Notice of Deficiency, Sub-chapter S, Tax Abuse, Tax Court, Tax Guidance & Preparation, Tax Problems & Requests, Tax Relief By law, the IRS has the authority to collect outstanding Federal taxes for 10 years from the date your tax liability was assessed. The 10-year collection period is suspended:
● while the IRS and the Ofice of Appeals consider a request for an installment agreement or an offer in compromise.
● from the date you request a CDP hearing until Appeals issues a CDP Notice of Determination or, if you seek review in the Tax Court, until the Tax Court’s decision becomes final, including appeals to a United States Court of Appeals.
● from the date you request innocent spouse relief until a final Notice of Determination is issued or, if you seek review in the Tax Court, the date the Tax Court decision becomes final and for 60 days thereafter. If, however, you appeal the Tax Court’s decision regarding your right to innocent spouse relief to a United States Court of Appeals, the collection period will begin to run 60 days after the filing of the appeal unless a bond is posted with the appeal.
● for tax periods included in a bankruptcy while the automatic stay is in effect, plus an additional six months.
● while you are residing outside the United States, if you are absent for a continuous period of at least six months. The amount of time the suspension is in effect will be added to the time remaining in the 10year period. For example, if the 10-year period is suspended for six months, the time left in the period we have to collect will increase by six months.
June 24, 2011 John R. Dundon II Back Taxes Owed, Bankruptcy, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Centralized Insolvency, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Penalty and Interest Abatement, Non-filed Tax Returns, Offer In Compromise, Paying Taxes, Self Employ, Small Business, Sole Proprietor, Sub-chapter S, Tax Guidance & Preparation, Tax Relief Call 800-913-9358 to reach the Centralized Insolvency Operation. Hours are 7 a.m. to 10 p.m. eastern time. If the IRS is a creditor in a bankruptcy case, and you determine that IRS was not originally listed as a creditor, notification of the filing should be sent to IRS to prevent violations of the automatic stay. Send notification to:
Internal Revenue Service- Centralized Insolvency Operation – P. O. Box 7346 – Philadelphia, PA 19101-7346
IRS notices are sent to the last known address. This address is determined by the most recently filed tax return, Form 8822, Change of Address, or change of address information obtained from the United States Postal Service. As an official National Change of Address licensee of the USPS, the IRS receives weekly updates of change of address information.
Bankruptcy does not prohibit issuance of all IRS notices, and not all IRS notices violate the automatic stay. Some notices, for example inquiries concerning unfiled returns, will continue to be sent to the debtor’s last known address.
For individual debtors, the last known address should always remain the debtor’s address. Returns should not be filed “in care of” the trustee. Doing so will change the debtor’s address to that of the trustee and all IRS correspondence relating to that taxpayer will be sent to the trustee.
In cases not involving an individual debtor, the debtor’s IRS address of record will be changed to the trustee’s address if the trustee:
files a debtor’s tax return in care of the trustee at the trustee’s address, or
files a change of address for the debtor with the USPS, or
files a Form 8822, Change of Address, with the IRS.
Any of the above will result in all future IRS correspondence being sent to the trustee. Treas. Reg. §301.6212-2 and Rev. Proc. 2010-16, provide guidance on the procedures for making a change of address and explain the requirements for giving the IRS “clear and concise notification” of a change of address.
IRS notices concerning taxes incurred by bankruptcy estates of individuals in chapter 7 and 11 cases, which file separate Form 1041 returns, are properly sent to the bankruptcy trustee. Notices will continue to be sent until the liability is satisfied or the statute of limitations for collection expires.
Certain penalties may apply to returns filed by the trustee for taxes owed by the bankruptcy estate. The penalties may be waived if the Bankruptcy Court finds there are insufficient funds to pay administrative expenses. Contact the Centralized Insolvency Operation at the phone number below if you believe any of the penalties should be waived.
If you have questions regarding a case where IRS is listed as a creditor, contact the Centralized Insolvency Operation. Be prepared to provide the debtor’s bankruptcy case number or taxpayer identification number. The IRS may only disclose the information permitted by I.R.C. section 6103.
June 16, 2011 John R. Dundon II Appeals & Audit Resolution, Asset Classification, Back Taxes Owed, Debt, Disallowed Expenses, Distributions, Entity Classification, IRS Collections, IRS Enforcement, IRS Levy, IRS Lien, Net Operating Loss, NOL, Paying Taxes, Self Employ, Small Business, Sole Proprietor, Stock Options, Tax Guidance & Preparation, Tax Problems & Requests, Tax Relief Closing down your business is hard and heart breaking and if you are at the point that you are actually reading this post then people have probably been nagging you for money and you are at the end of your rope. You worked hard to create opportunity for yourself as an entrepreneur but if the best option going forward is to close the doors you are going to want to do it do it carefully and deliberately to minimize the myriad of potential negative after effects. Trust me on this I know. Unfortunately the services that I provide tend to serve as a major catalyst in forcing that which for many is a MAJOR LIFE DECISION to either close a business or re-dedicate stakeholder resources (time, money and/or risk appetite) towards keeping an operation viable. Although I’ve been involved with many small business successes I’ve also been involved with many business closures. Through that process I’ve come up with a check list of action items requiring attention after your accountant quits.
When closing a business typical actions are taken. You must file an annual return for the year you go out of business. If you have employees, you must file the final employment tax returns, in addition to making final federal tax deposits of these taxes. Also attach a statement to your return showing the name of the person keeping the payroll records and the address where those records will be kept.
The annual tax return for a partnership, corporation, S corporation, limited liability company or trust includes check boxes near the top front page just below the entity information. For the tax year in which your business ceases to exist, check the box that indicates this tax return is a final return. If there are Schedule K-1s, repeat the same procedure on the Schedule K-1.
You will also need to file returns to report disposing of business property, reporting the exchange of like-kind property, and/or changing the form of your business. If you do not have a pre-printed envelope in which to send your taxes, refer to the IRS’ Where To File page for a list of addresses. Below is a list of typical actions to take when closing a business, depending on your type of business structure:
Checklist
Make final federal tax deposits
File final quarterly or annual employment tax form.
Issue final wage and withholding information to employees
Report information from W-2s issued.
File final tip income and allocated tips information return.
Report capital gains or losses.
Report partner’s/shareholder’s shares.
File final employee pension/benefit plan.
Issue payment information to sub-contractors.
Report information from 1099s issued.
Report corporate dissolution or liquidation.
Consider allowing S corporation election to terminate.
Report business asset sales.
Report the sale or exchange of property used in your trade or business.
References/Related Topics
June 7, 2011 John R. Dundon II Amended Tax Return, Appeals & Audit Resolution, Audit Technique Guide, Back Taxes Owed, Enrolled Agent, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement, Non-filed Tax Returns, Paying Taxes, Statutory Notice of Deficiency, Tax Guidance & Preparation, Tax Relief The IRS publishes a short but precise set of instructions on Audit Reconsideration. Check it out at IRS Publication 3598. Audit reconsideration is the first avenue I consider when responding to the dreaded ’90 day letter’ or IRS Notice of Statutory Deficiency. Almost 99.9% of Notices of Statutory Deficiency can be settled with the IRS unless the time clock runs down resulting in a default tax judgment if you do not file a petition in tax court.
IF you find yourself ‘running out of time’ on the 90 day period, filing a tax court petition and paying court fees and representing yourself pro-se or hiring a tax court lawyer are last choice decisions. They are costly and tax court I hate to say it usually favors the government. The best solution is to manage the IRS Examination (aka Audit), IRS Appeals, and/or IRS Collections early and often to obtain the BEST outcome.
The problem with the 90 day letter is that it is an uphill battle to get the proposed assessment amount changed. If gone unchecked the assessment will proceed to IRS Collections and Collections will assume the amount is correct. It is possible to get the matter back to IRS Examination, but the IRS does not have to comply with that request. If the amount in the 90 day letter is not correct, and you have the documentation and tax authority backing your position, IRS Examination, Appeals, and/or Collections will want to settle the case. The trouble is that by the time the average taxpayer does anything about the 90 day letter there may not be enough time left to arrive at a resolution with IRS examination. Subsequently if a tax court petition is not filed timely, the taxpayer’s options become limited and resolution becomes potentially more expensive.
All of my cases are settled in IRS Appeals before the Tax Court Hearing date. I prefer not go to Tax Court. Also you are not going to Tax Court immediately if you petition, you will go to IRS Appeals as a docketed case, and you can most likely settle it there. You should try to work it out with the IRS, but you need to be prepared that if the 88th day comes, that you will need to petition the Tax Court to preserve your rights. I’m not a lawyer but I can tell you that filing the petition in tax court is not as daunting as it sounds. The first thing the court does is send the file to IRS Appeals to be worked out and that is where I come in. The tax court petition kicks a taxpayer’s file into appeals from wherever it is in the IRS system. If you can work it out with IRS before the petition is filed, that saves the fees for filing the petition and the additional correspondence required for dealing with the IRS attorneys.
I found ALL the following works to the taxpayer’s advantage when time winds down if proper documentation and tax authority is held: file a reconsideration along with IRS Form 843 to request a refund or abatement; File an amended return Form 1040X to modify IRS assessments (or a 1040 to modify a return that the IRS may have prepared on the taxpayers behalf); Request an Appeal; or as a last resort if you are quickly approaching a time deadline, file a petition in US Tax Court
I must say though that from my own somewhat biased perspective it is much easier to get the total amount of an entire tax liability (covering multiple tax periods) established in IRS appeals where the IRS Appeals Officer can deal with the entire situation rather than spending copious amounts of time on the phone coordinating between IRS examination or IRS customer services (processing the past due or amended returns) and IRS collections for each specific tax matter and tax period.
Most anyone, be they an EA or CPA or a person with no professional training whatsoever, can assist other tax payers in tax court presuming the taxpayer with the court petition is willing to act on their own behalf. Before considering this route go to tax court and sit in that room and hear a proceeding. This is a valuable experience to learn how the tax court actually operates. Tax court proceedings are not the same as Federal Court. I’ve found the tax court judges offer more room for parties to argue cases which I consider to be a special talent. The proceeding is usually less formal but timeliness and preparation are demanded and the tax rulings themselves have been fairly predictable.
Filing a Tax Court Petition is ultimately a great tool in buying more time to prepare the necessary documents to prove the assessment should not take place. More than likely you will have 6 months after you file the petition before you even hear from an IRS Appeals Agent.
Keep in mind that as long as you have not signed and waived your dispute rights with a ‘closing agreement’ (IRS Form 906); a ‘compromise agreement’ or an ‘appeals agreement’ (IRS Form 870-AD) with the IRS you do not have to go to tax court. So before you SIGN ANYTHING be sure to consult with someone you trust.
June 1, 2011 John R. Dundon II Alternative Minimum Tax (AMT), Amended Tax Return, Appeals & Audit Resolution, Back Taxes Owed, Business Expense, Colorado Department of Revenue, Disallowed Expenses, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement, Non-filed Tax Returns, Paying Taxes, Payroll Tax Problems, Rental Real Estate, Self Employ, Small Business, Tax Problems & Requests, Tax Relief According to IR-2011-20 published on Feb. 24, 2011, in its latest effort to help struggling taxpayers, the Internal Revenue Service announced a series of new steps to help people get a fresh start with their tax liabilities. The goal is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. Specifically, the IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid tax liens. The changes include:
Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.
Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
Creating easier access to Installment Agreements for more struggling small businesses.
Expanding a streamlined Offer in Compromise program to cover more taxpayers.
Tax Lien Thresholds
The IRS will significantly increase the dollar thresholds when liens are generally filed. The new dollar amount is in keeping with inflationary changes since the number was last revised. Currently, liens are automatically filed at certain dollar levels for people with past-due balances.
The IRS plans to review the results and impact of the lien threshold change in about a year.
A federal tax lien gives the IRS a legal claim to a taxpayer’s property for the amount of an unpaid tax debt. Filing a Notice of Federal Tax Lien is necessary to establish priority rights against certain other creditors. Usually the government is not the only creditor to whom the taxpayer owes money.
A lien informs the public that the U.S. government has a claim against all property, and any rights to property, of the taxpayer. This includes property owned at the time the notice of lien is filed and any acquired thereafter. A lien can affect a taxpayer’s credit rating, so it is critical to arrange the payment of taxes as quickly as possible.
Tax Lien Withdrawals
The IRS will also modify procedures that will make it easier for taxpayers to obtain lien withdrawals.
Liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it. The IRS has determined that this approach is in the best interest of the government.
In order to speed the withdrawal process, the IRS will also streamline its internal procedures to allow collection personnel to withdraw the liens.
Direct Debit Installment Agreements and Liens
The IRS is making other fundamental changes to liens in cases where taxpayers enter into a Direct Debit Installment Agreement (DDIA). For taxpayers with unpaid assessments of $25,000 or less, the IRS will now allow lien withdrawals under several scenarios:
Lien withdrawals for taxpayers entering into a Direct Debit Installment Agreement.
The IRS will withdraw a lien if a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.
The IRS will also withdraw liens on existing Direct Debit Installment greements upon taxpayer request.
Liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored.
Installment Agreements and Small Businesses
The IRS will also make streamlined Installment Agreements available to more small businesses. The payment program will raise the dollar limit to allow additional small businesses to participate.
Small businesses with $25,000 or less in unpaid tax can participate. Currently, only small businesses with under $10,000 in liabilities can participate. Small businesses will have 24 months to pay.
The streamlined Installment Agreements will be available for small businesses that file either as an individual or as a business. Small businesses with an unpaid assessment balance greater than $25,000 would qualify for the streamlined Installment Agreement if they pay down the balance to $25,000 or less.
Small businesses will need to enroll in a Direct Debit Installment Agreement to participate.
Offers in Compromise
The IRS is also expanding a new streamlined Offer in Compromise (OIC) program to cover a larger group of struggling taxpayers.
This streamlined OIC is being expanded to allow taxpayers with annual incomes up to $100,000 to participate. In addition, participants must have tax liability of less than $50,000, doubling the current limit of $25,000 or less.
OICs are subject to acceptance based on legal requirements. An offer-in-compromise is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. Generally, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement. The IRS looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay.
November 5, 2010 John R. Dundon II Appeals & Audit Resolution, Back Taxes Owed, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement The IRS Restructuring and Reform Act of 1998 established the Collection Due Process or Equivalent Hearing (CDP), which is an appeal filed in response to the following collection actions: Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC Sec. 6320; Notice of Intent to Levy and Notice of Your Right to a Hearing; Notice of Jeopardy Levy and Right of Appeal; and Notice of Levy on Your State Tax Refund–Notice of Your Right to a Hearing. For each period of liability accrued by a taxpayer, the IRS is required to issue a series of notices providing instruction on how to pay the assessed balance, establish a repayment agreement to resolve the assessed balance, or contest the assessed balance if the taxpayer does not agree with the amount proposed. These notices are intimidating and will usually contain progressively more aggressive language regarding payment of any balance assessed. These notices culminate so to speak with the issuance of a Final Notice of Intent to Levy. This Final Notice of Intent to Levy, issued under IRM 5.11.1.2.1, notifies a taxpayer of his opportunity to file a CDP, request an equivalent hearing, or be subject to enforced collection action such as lien and levy against all period(s) of liability included in the notice. The IRS affords this same opportunity in response to the filing of a: Federal tax lien, Notice of Jeopardy Levy, or Notice of Levy on Your State Tax Refund. Many taxpayers respond to a Final Notice of Intent to Levy by filing a CDP, IRS FORM 12153. It is important to be practical, especially in dealing with collection and compliance issues, in determining when to file a CDP. Knowing the required time frame for filing a CDP and the correlating effects on your rights will not only provide protection from collection action but also maintain the ability to further pursue the disputed issue in Tax Court if needed. Any CDP not filed within the time frame specified by the IRS will result in an equivalent hearing instead of a CDP hearing. What is the difference? While the same issues can be addressed in CDP and equivalent hearings, a timely- filed CDP mandates that a taxpayer be given the opportunity to a hearing in advance of any collection action against the period(s) of liability included in the appeal; whereas, an equivalent hearing does not afford a taxpayer protection from collection action nor does it allow an opportunity to petition the Tax Court. In evaluating whether to file a CDP in response to a Final Notice of Intent to Levy consider the following:
- First, determine whether the issue can be resolved with the IRS locally and whether or not the issue requires urgent attention.
- Second, be aware that filing a CDP in response to a Final Notice of Intent to Levy for employment taxes subjects a taxpayer to future, immediate enforced collection through a Disqualified Employment Tax Levy (DETL). Under IRC Sec. 6330(h), the DETL allows the IRS to enforce collection immediately upon assessment of future employment tax accruals if a CDP has been filed within the prior two years. This is a newly-enacted collection tool that should be researched and fully understood for anyone filing a CDP regarding employment taxes.
- Third, consider collection statute expiration dates of the periods in question per IRM 5.1.19. Finally, and most importantly, ensure the validity of the CDP as the IRS has instituted an additional penalty under IRC Sec. 6702(b) for appeals based on a “specified frivolous position.” Once the CDP is received by the IRS it will be processed and assigned to an appeals or settlement officer for a hearing. Appeals officers, who are often CPAs and attorneys, will typically be trained in examination and deal mainly with income tax issues while settlement officers are trained primarily in collection and compliance issues.
- Fourth. Appeals and settlement officers will review the filed CDP and contact the taxpayer to schedule a hearing. At the hearing, the taxpayer is given an opportunity to present information regarding the period(s) of liability and/or collection alternatives other than lien, levy, or seizure. The assigned appeals or settlement officer will weigh the information presented in the hearing and any associated hazards of litigation before issuing a determination or making an additional information request from the taxpayer. If the taxpayer does not ultimately agree with the determination of the appeals or settlement officer, the required written determination from the IRS provides instruction on petitioning the Tax Court to pursue the issue further.
August 25, 2010 John R. Dundon II Amended Tax Return, Appeals & Audit Resolution, Back Taxes Owed, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement, Tax Guidance & Preparation, Tax Problems & Requests, Tax Relief There are number of reasons the IRS sends notices to taxpayers. Each letter and notice offers specific instructions on what you need to do to satisfy the inquiry.
If you receive a correction notice, you should review the correspondence and compare it with the information on your return. If you agree with the correction to your account, usually no reply is necessary unless a payment is due.
If you do not agree with the correction the IRS made, it is important that you respond as requested. Write to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Before mailing the information to the IRS seriously consider consulting with a professional NOT on the IRS payroll.
Remember IRS employeees are trained in protecting the best interests of the federal government. This means maximizing the amount of money they get from you. The IRS employees are indeed for the most part good people but to do their job they MUST advocate on behalf of the federal governement which usually means working in direct opposition to you. Make sure you know what you are doing or consider bringing in the services of a professional, like myself.
Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the correspondence available when you call, to help us respond to your inquiry. If they piss you off, don’t get frustrated. Simply call me 720-234-1177. I get matters resolved fairly and efficiently.
Remember it’s important that you keep copies of any correspondence with your records.
Publication 594, The IRS Collection Process ( PDF)
Publication 17, Your Federal Income Tax for Individuals ( PDF)
