IRS Tax Debt
Are you looking for help with your IRS tax debt? IRS tax debt settlement help may be just a phone call away. Our trusted tax lawyers have years of experience helping taxpayers resolve their IRS tax debts. To find out if you qualify for IRS tax debt settlement contact us today by calling 1-888-TAX-LADY or by using our contact form.
Bankruptcy and IRS Liabilities
The issue often arises whether a taxpayer can get rid of their back tax liability through bankruptcy. The issue then becomes whether Internal Revenue Service (IRS) taxes are a type of “debt” that can be discharged in bankruptcy. If you are considering filing bankruptcy you should speak with a bankruptcy attorney regarding whether your IRS debt is dischargeable. There are a number of factors that must be considered before taxes can be discharged in bankruptcy. As in all bankruptcy proceedings, there needs to be a determination that the taxpayer qualifies for bankruptcy.
IRS to Use Private Debt Collection Agencies
Since its creation, the Internal Revenue Service (IRS) has been solely responsible for collecting taxes from American taxpayers. In the past, the IRS has been unable to contact many taxpayers with IRS tax debts because of its shortage of manpower and collection programs. However, the IRS has promised to increase collection efforts by privatizing a portion of the debt collection. Specifically, the IRS will use private debt collection agencies to collect unpaid taxes from clients.
What is an IRS Tax Debt?
An Internal Revenue Service (IRS) tax debt is the total unpaid taxes assessed against a taxpayer by the Internal Revenue Service. The statute of limitations for IRS tax debts is typically ten years, which means the IRS has ten years from the date an IRS tax debt is assessed to collect the tax before it will expire. IRS tax debts are typically the result of an unpaid federal income tax return.
Getting Help Settling IRS Tax Debts
Settling Internal Revenue Service (IRS) tax debts can be a long and stressful process. Getting help from a qualified tax professional or experienced tax debt attorney is often a taxpayers best option for resolving IRS tax debts. The IRS offers multiple settlement options to taxpayers including Offers in Compromise, Installment Agreements, and placement on Currently Not Collectible Status. Hiring a tax professional or experienced tax attorney is often the best option for a taxpayer seeking IRS tax debt settlement.
What Are My Debt Collection Rights?
The Internal Revenue Service (IRS) affords taxpayers many rights in the tax debt collection process. Below is a list of many of the rights taxpayers provided by the IRS. IRS employees will explain and protect a taxpayer’s rights throughout all contacts with the IRS. The IRS will not disclose to anyone the information given to the IRS by a taxpayer or their council, except as authorized by law. Taxpayers have the right to know why how the information will be used, and what happens if the requested information is not provided.
More on Private Debt Collectors
Taxpayers who owe the federal government for back tax liabilities may be confused when opening their mail. The reason? Third party collection agencies have been outsourced by the Internal Revenue Service (IRS) for the purpose of collecting owed IRS back taxes. The 2004 American Jobs Creation Act gave the IRS the authority to enter into contracts with private collection agencies for the purpose of collecting federal tax liabilities.
Joint and Several Liability and Federal Tax Debt
A tax debt liability from the filing of a joint tax return, including interest and penalties, is considered to be a joint and several. Joint and several liability means that two or more individuals are each responsible for full payment of the same tax debt.
Estimated Tax Payments and IRS Tax Debt
For many individuals who owe back taxes to the IRS, the culprit behind the tax debt is the estimated tax payment. Or, more accurately, it is the inability to make sufficient estimated tax payments that causes a tax debt when a tax return is filed. For those who are self-employed or business owners, “estimated tax payments” is likely a familiar, yet distasteful, term. Because self-employed individuals do not have an employer withholding payroll taxes for them, they must submit tax payments to the government on their own.
Dissipated Assets
When a taxpayer files an Offer In Compromise (OIC), the Internal Revenue Service (IRS) will analyze the taxpayer’s financial condition and attempt to maximize what they determine to be their Reasonable Collection Potential (RCP). One method of maximizing a taxpayer’s RCP is by accounting for a taxpayer’s dissipated assets.
Substitute for Returns
Delinquent tax returns can be identified and worked by the Examination Division, Collection Division, or the Service Center. Once a nonfiling situation has been identified, the IRM (Internal Revenue Manual) tells the assigned agent to review the situation for fraud. If there appears to be indications of fraud, the agent is instructed not to solicit returns or payment, but to refer the case to the Criminal Investigation Division. Assuming no indications of fraud, the IRS agent will contact the nonfiler and demand that he/she file all delinquent returns using Letter CP-515 and CP-518.
What is Taxable Income?
For purposes of reporting income to the Internal Revenue Service (IRS), generally, all income is taxable unless the law allows for a specific exemption. All taxable income must be reported on that respective year’s tax return and is subject to tax. Nontaxable income, on the other hand, may be reported on the tax return but is not taxable.
