Posted by LWM Team on Thu, Jul 29, 2010
Postponing Collection of Your Tax Bill
A ‘53’ is used by individuals who are in dire financial straits such as no employment, insistent creditors and no money. If the collector agrees he/she recommends your case is ‘currently not collectible’. He completes a Form 53. If it is accepted it is computerized and the IRS will not contact you again for at least six months. Penalties and interest keeps accruing. Once the ‘53’ period is finished the IRS process starts again. It’s not easy to get a ‘53’ approved and you will have to show documentation to prove your situation is desperate. A ‘53’ only gives you time to sort out your financial problems with the IRS. It can help you reach the ten year collection cut-off or give you time to file for bankruptcy.
Suing the IRS
If the law is carelessly treated by an IRS collector you can sue the IRS for negligence up until $100,000. If your home is taken without a court order you can sue the IS for $1 million. It is rare for a tax payer to sue the IRS because they don’t win. This means hardly any lawyers want to take on such a case against the IRS on contingency.
Highlights
- The IRS is the most powerful bill collector and can seize your properties, bank accounts and salaries.
- The start of the collection process by the IRS is in the form of computerized letters. If you don’t have the finances to pay, ask for more time.
- Don’t give the IRS banking and employment details. Ask for a face to face meeting at your local IRS office instead of a phone conversation.
- Be respectful and polite to a collector but know your rights.
- You may remain silent regarding assets but you may not lie to the IRS as it’s a crime.
- Have your financial data in order prior to speaking with a collector and never undervalue your living costs.
- Offer a monthly payment plan if you can’t settle your taxes in full. Penalties and interest keep accruing until they are paid up.
- Tax debts can be done away with by bankruptcy or give more time to pay minus penalties and interest increasing.
- Economic hardship is a reason to ask the IRS to temporarily postpone collection.
Posted by LWM Team on Wed, Jun 02, 2010
The Internal Revenue Service does not overlook taxes owed by a business/ home business that closed its door. Even if the business has not been operating for several years it will not be free from the expectations of the Internal Revenue Service. You can be sure the Internal Revenue Service will make every effort to collect employment taxes and officers of that business will be held responsible. However, if the business closed down in a proper manner by following the correct tax procedures and none of its assets got transferred to third parties in order to continue operating in a fraudulent fashion it will be regarded as not collectible. In such an instance any Internal Revenue Service tax notices are being automatically produced by a computerized procedure.
A business that is regarded as truly not collectible will not have the attention of the Internal Revenue Service. The Internal Revenue Service can pursue any of those who made the decisions not to pay employment taxes to the Internal Revenue Service. They would be under the impression that officers of the business are liable to a lesser or greater degree. A penalty for trust fund recovery would have been evaluated by the Internal Revenue Service against officers responsible for the employment taxes withheld from workers’ salaries.
A business that is correctly closed and is not collectible will not be pursued by the Internal Revenue Service. As there are no assets, they will go after officers, owners and managers due to their personal liability. This is known as ‘joint’ and ‘several liability’. If the collection of one hundred percent by the Internal Revenue Service is from another person you no longer have a obligation to pay. The collection can be carried out in any way the Internal Revenue Service decides is best but may not be more than one hundred percent of what is owed.
According to the IRS Taxpayer Advocate 2002 to 2007, trust fund assessments amounting to 13.5% was carried out against owners, officers and managers. The Internal Revenue Service is not excessive in their pursuance of closed businesses.
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Posted by LWM Team on Thu, Jan 07, 2010
If you find yourself in a situation where you don't agree with something the IRS is doing know that there is a process that allows you to appeal a tax dispute. Now, a tax appeal isn't right for every situation; however in situations where it does apply you will find that the process is a great way to interact with the people who matter at the IRS and hopefully find a resolution for your dispute.
For starters, if you want to appeal a tax dispute there are two qualifiers that must be met in order for the process to go forward. First you must have received an IRS communication that explains to you your rights to appeal any disputes related to the communication or decision. Secondly, you must not agree or sign any forms that indicate you agree with the disputed claim. Essentially you must pick your story and stick to it.
Keep in mind that you cannot appeal a tax dispute if the only reason for your appeal is that you can't afford the taxes you owe or if there was no mention of the appeal on the correspondence sent to you by the IRS. Remember, this is not a process that is useful for fixing all disputes you have with the IRS, just several specific ones.
Sadly, your choices are rather limited if you want to appeal a tax dispute. Unless your dispute falls under several categories identified by the IRS that are available for dispute you are pretty much out of luck. Fortunately the IRS put plenty of thought into what situations can be disputed and which ones cannot therefore the most likely scenario is that if you have a legitimate tax dispute you will be able to appeal the dispute using the provided channels and work out your differences with the IRS in a productive and quick manner.