IRS collections, tax debt, liens, levies, and what to do when you owe the IRS more than you can pay right now.
O Is For Offer in Compromise. When you owe a debt to the IRS, there are a few ways that you can handle it. Most commonly, you can enter into an installment agreement; under an installment agreement, you agree to pay off your debt over a period of time. If you can’t pay the full…
L is for Levy. In God we trust; all others must pay cash. The IRS, like most creditors, wants to get paid. And if you owe money to the IRS, they’re going to do all they can to make sure that happens. One of the ways that the IRS works to make sure they get…
It’s tough out there these days and increasingly, taxpayers are scurrying away from their tax obligations for fear that they won’t be able to pay. As a practitioner, I’ve seen the drill plenty of time: lay low and hope the IRS doesn’t come looking for you. That rarely works. And when IRS does catch up…
If you owe money to the federal government, your federal income tax refund can be seized to satisfy your debt. This is often referred to as “offset” since the seizures are part of the Treasury Offset Program (TOP); the program is administered by Financial Management Service, a branch of the U.S. Department of Treasury. Examples…
Internal Revenue Service (IRS) Commissioner Doug Shulman has announced that the IRS will not renew its contracts with two private debt collection agencies. Those contracts expire this year. You may recall that I was not a fan of turning over collections matters to private companies. Like many other tax professionals, I had concerns about the…
Taxpayer asks: Kelly, I hope you can help with this one… I have been contacted by the IRS that I didn’t file one year and the another year I didn’t file at all. They have sent me copies of my income and other information; the problem is that I don’t have any of my own…
My recent post about an Offer in Compromise (where a taxpayer pays less than their existing liability as part of a deal) gone bad is in stark contrast to a rosier picture painted by CBS News. CBS seems to imply that offers are a bad idea because they reward those with outstanding tax liabilities by…
Apparently not. It’s rare that I blog about client matters. I like to keep them private for a variety of reasons, not the least of which are ethical considerations. But a recent client matter has me steamed. Really steamed. And it’s blog-worthy. I’ll keep it generic. A client had a tax matter that needed immediate…
The House has approved legislation that would end the extremely unpopular program that allows private collection agencies to collect tax debts for the IRS. The IRS had previously argued that the policy was not financially viable. Of the $32 million brought in since the collection bill went into effect, the IRS collected $7 million on…
What? You think that’s crazy talk? You would if you have been following the debacle that is allowing private debt collectors to pursue the collection of taxes even though it is more expensive and is expected to collect fewer tax dollars. Government at its finest, no? Concerns about privatizing tax collections have included privacy issues,…