Among the remedies available to taxpayers in financial distress that are unable to meet their tax obligations is the ability to obtain Currently Not Collectible (CNC) status from the Internal Revenue Service (IRS). The IRS has authority to designate an account as CNC under Policy Statement 5-71, and may do so for a variety of
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Tax Legal Problems
A taxpayer may be subject to tax liability before the Internal Revenue Service (IRS), or the state agencies such as the Employment Development Department (EDD), State Board of Equalization (SBOE), and Franchise Tax Board (FTB). The IRS is the federal government agency responsible for tax collections and tax law enforcements. The EDD is part of
Taxpayer Advocate Service
The Taxpayer Advocate Service (TAS) is an organization that operates independently within the Internal Revenue Service (IRS), and exists in order to assist taxpayers experiencing “economic harm.” The IRS defines “economic harm” as a situation where someone is incapable of providing basic necessities for themselves, including housing, food, or transportation. Internal Revenue Service, The Taxpayer
Abatements and Reconsiderations
Abatements and Reconsiderations When a tax debtor fails to meet his or her federal tax obligations, he or she may too often assume that the taxes originally assessed were done so in the appropriate manner. However, this is often not the case, and in recognition of this fact the Internal Revenue Service (IRS) has been
Federal Tax Lien
A federal tax lien is the mechanism by which the Internal Revenue Service (IRS) enforces the tax obligations of taxpayers that have fulfilled those obligations. Typically, such a lien will be filed once a taxpayer’s liability has been assessed, a Notice and Demand for Payment has been sent to the taxpayer, and the taxpayer has
IRS Audit Reconsideration
The Internal Revenue Service (IRS) has the power to audit a taxpayer, and typically does so in a limited number of circumstances. The IRS will often audit high net worth individuals, taxpayers that claim huge charitable contributions, underreporting of income on the relevant tax form, taxpayers that claim huge business losses year after year, or
How Future Income is Calculated
In order for the Internal Revenue Service (IRS) to determine whether a taxpayer is entitled to a reduction in their federal tax burden by way of an Offer in Compromise based on doubt as to collectability, the taxpayer’s future income must be determined. How future income is calculated is essentially an estimate made by the
Taxpayer Advocate Service
The Taxpayer Advocate Service (TAS) is an organization that operates independently within the Internal Revenue Service (IRS), and exists in order to assist taxpayers experiencing “economic harm.” The IRS defines “economic harm” as a situation where someone is incapable of providing basic necessities for themselves, including housing, food, or transportation. Internal Revenue Service, The Taxpayer
Tax Gap
The tax gap is the Internal Revenue Services (IRS) approximation of the total amount of taxes outstanding. The calculation of this figure is a massive endeavor and only occurs every five years or so. As of 2006, the voluntary compliance rate through the U.S. was relatively unchanged at approximately 83%. Internal Revenue Service, The Tax
Understanding an IRS Audit
An IRS audit is a review of a business or individual’s tax return to ensure that everything was reported correctly in compliance with applicable tax laws. By law, the taxpayer is only required to pay the exact amount of tax owed, no less and no more. Consequently, if a taxpayer incorrectly reports his or her