IRS Tax Relief of Penalties

In recent years I have seen the IRS take a new direction in their efforts to collect on delinquent taxes. Increased filings of Notice of Federal Tax Lien, Notice of Levy and bank accounts and wages, seizures of properties and other assets.

New laws have also made it increasingly difficult for taxpayers to obtain the overly advertised pennies on the dollar solution of an Offer in Compromise. Taxpayers need to know that not all will qualify for an Offer. However, there are many alternatives that the IRS personal will not suggest, alternatives that can help reduce or minimize your tax obligations.

One alternative may be to file an appeal to request abatement of the penalties and adjustment of interest for assessed taxes. The IRS allows for relief from assertion and assessment of penalties if you can show you acted reasonably and in good faith or relied on incorrect advice of an IRS employee. The IRS will give relief of interest that is the result of certain errors or delays caused by an IRS employee.

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New Law Revamps IRS Offer in Compromise Program

WASHINGTON - Under a new federal law, taxpayers submitting new offers in compromise must make a 20 percent nonrefundable, up-front payment in many cases, the Internal Revenue Service announced today.The recently-enacted Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) made major changes to the offer in compromise (OIC) program, tightening the rules for lump-sum offers and periodic-payment offers. These changes become effective for all offers received by the IRS starting July 16, 2006.

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Major Policy Changes That Affect All IRS Civil/Criminal Tax Collection Cases

March 9, 2002 marked the final nail in the proverbial coffin of the "kinder and gentler" IRS when Congress passed H.R. 3090. The key change was that the 10-year Collection Statute was suspended on all pending and future Offers in Compromise filed with the Internal Revenue Service. In addition, the IRS revised its acceptance criterion policy on Offers and Installment Agreements. In recent weeks this "new" IRS attitude has been on full display - from the firm's lower dollar income taxes cases to million dollar employment tax disputes.

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IRS Offer in Compromise

One of the most popular services my firm provides is negotiating with the IRS for an Offer in Compromise. An Offer in Compromise is an agreement between a taxpayer and the IRS that resolves the taxpayers' tax liability whereas the taxpayer asks the government to accept a lesser amount of money that the delinquent tax balance.