Tax Debt Solutions Blog

Tax Debt Relief: Get the Facts and Know Your Rights!

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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.