When you owe money to the IRS, are you on the hook forever? Fortunately, the answer is usually “no.” As a general rule, there is a ten-year statute of limitations on IRS collections. This means that the IRS can attempt to collect unpaid taxes for up to ten years from the date they were assessed. […]

Federal Court Strikes Down IRS Attempt to Regulate Tax Return Preparers In a clear rebuke to the Internal Revenue Service, the United States District Court for the District of Columbia held that the IRS had no authority to impose regulations on hundreds of thousands non-attorney, non-CPA, and non-EA tax return preparers. The regulations required these […]

Unfiled Tax Returns Approximately 10 million taxpayers do not file their federal tax returns each year. Typically, a failure to file can be cured easily if the taxpayer has professional representation and voluntarily addresses the problem. However, absent voluntary compliance and professional assistance, a taxpayer will face serious collection activities and even criminal prosecution for […]

What kinds of interest and penalties will I be charged for filing and paying my taxes late? Answer: Interest is compounded daily and charged on any unpaid tax from the due date of the return (without regard to any extension of time to file) until the date of payment. The interest rate is the federal […]

Can the IRS Take a Taxpayer’s Home?  Yes, but it is a lengthy process and court approval is required. First, the Revenue Officer must prepare a suit narrative report.  The suit narrative details the results of the investigation and contains the recommendation to seize the principal residence. The report must make a request for institution […]

The IRS uses its “Collection Financial Standards” to determine a taxpayer’s ability to pay a delinquent tax liability. Allowable living expenses include those expenses that meet the necessary expense test. The necessary expense test is defined as expenses that are necessary to provide for a taxpayer’s (and his or her family’s) health and welfare and/or […]

A taxpayer can appeal most collection actions. If the request for appeal is timely, in most cases, all collection activity will stop during the appeals process.  The main options for appeals are the following: Collection Due Process (CDP) The purpose of a Collection Due Process hearing is to review collection actions that were taken or […]

The Fresh Start provisions mean that more taxpayers will have the ability to use streamlined installment agreements to catch up on back taxes. Under the Fresh Start initiative, the maximum dollar criteria for streamlined installment agreements has been raised from $25,000 to $50,000 and the maximum term has been raised from 60 months to 72 […]

The IRS uses its “Collection Financial Standards” to determine a taxpayer’s ability to pay a delinquent tax liability. Allowable living expenses include those expenses that meet the necessary expense test.  The necessary expense test is defined as expenses that are necessary to provide for a taxpayer’s (and his or her family’s) health and welfare and/or […]