Monday, June 13, 2011

IRS Problems -- IRS Announces New Effort to Help Struggling Taxpayers Get a Fresh Start

STREAMLINED OFFER in COMPROMISE
STREAMLINE IRS SETTLEMENT
OFFERS FRESH START




 IRS Announcement

New Effort to Help Struggling Taxpayers Get a Fresh Start 

Major Changes Made to Federal Tax Lien Process 
In its latest effort to help struggling taxpayers, the Internal Revenue Service (IRS) has recently announced a series of new steps to help struggling taxpayers get a fresh start with their tax liabilities.
The goal is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. Specifically, the IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid tax liens.
“We are making fundamental changes to our lien system and other collection tools that will help taxpayers and give them a fresh start,” IRS Commissioner Doug Shulman said. “These steps are good for people facing tough times, and they reflect a responsible approach for the tax system.”
This recent announcement centers on the IRS making important changes to its Offer in Compromise program as well as lien filing practices that will lessen the negative impact on taxpayers. The changes include:
  • 1.Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.
  • 2.Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
  • 3.Withdrawing federal tax liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
  • 4.Creating easier access to IRS Installment Agreements for more struggling small businesses.
  • 5.Expanding a streamlined Offer in Compromise program to cover more taxpayers.



“These steps are in the best interest of both taxpayers and the tax system,” Shulman said. “People will have a better chance to stay current on their taxes and keep their financial house in order. We all benefit if that happens.”
This is another in a series of steps to help struggling taxpayers get a fresh start. In 2008, the IRS announced lien relief for people trying to refinance or sell a home. In 2009, the IRS added new flexibility for taxpayers facing payment or collection problems. And this past year, the IRS held about 1,000 special open houses to help small businesses and individuals resolve tax issues with the Agency.
This recent announcement comes after a review of collection operations which Shulman launched last year, as well as input from the Internal Revenue Service Advisory Council and the National Taxpayer Advocate.
Tax Lien Thresholds
The IRS will significantly increase the dollar thresholds when a federal tax lien is generally filed. The new dollar amount is in keeping with inflationary changes since the number was last revised. Currently, a tax lien is automatically filed at certain dollar levels for people with a tax liability / past-due balances.
The IRS plans to review the results and impact of the new tax lien threshold change in about a year.
A federal tax lien gives the IRS a legal claim to a taxpayer’s property for the amount of an unpaid tax debt. Filing a Notice of Federal Tax Lien is necessary to establish priority rights against certain other creditors. Usually the IRS is not the only creditor to whom the taxpayer owes money.
A federal tax lien informs the public that the U.S. government (IRS) has a claim against all property, and any rights to property, of the taxpayer. This includes property owned at the time the notice of lien is filed and any acquired thereafter. A tax lien can affect a taxpayer's credit rating, so it is critical to arrange the payment of taxes as quickly as possible.
“Raising the lien threshold keeps pace with inflation and makes sense for the tax system,” Shulman said. “These changes mean tens of thousands of people won’t be burdened by liens, and this step will take place without significantly increasing the financial risk to the government.”
Federal Tax Lien Withdrawals
The IRS will also modify procedures that will make it easier for taxpayers to obtain withdrawal of the tax lien.
Tax Liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it. The IRS has determined that this approach is in the best interest of the government.
In order to speed the withdrawal process, the IRS will also streamline its internal procedures to allow collection personnel to withdraw a tax lien.
Direct Debit Installment Agreements and Federal Tax Liens
The IRS is making other fundamental changes to liens in cases where taxpayers enter into a Direct Debit Installment Agreement (DDIA). For taxpayers with unpaid assessments of $25,000 or less, the IRS will now allow a tax lien withdrawals under several scenarios:
  • 1. Federal tax lien withdrawals for taxpayers entering into a Direct Debit Installment Agreement.
  • 2. The IRS will withdraw a tax lien if a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.
  • 3. The IRS will also withdraw their tax liens on existing Direct Debit Installment greements upon taxpayer request.
A Tax Lien will be withdrawn after a probationary period demonstrating that direct debit payments will be honored.
In addition, this lowers user fees and saves the government money from mailing monthly payment notices. Taxpayers can use the Online Payment Agreement application on IRS.gov to set-up with Direct Debit Installment Agreements.
“We are trying to minimize burden on taxpayers while collecting the proper amount of tax,” Shulman said. “We believe taking away taxpayer burden makes sense when a taxpayer has taken the proactive step of entering a direct debit agreement.”


ANYONE CAN AGREE TO A VERY BAD
IRS INSTALLMENT AGREEMENT
IT DOESN'T TAKE A GENIUS
TO AGREE TO HIGHER PAYMENTS
THAN YOU SHOULD PAY
IRS Installment Agreements and Small Businesses
The IRS will also make streamlined Installment Agreements available to more small businesses. The Installment Agreement / payment plan program will raise the dollar limit to allow additional small businesses to participate.
Small businesses with $25,000 or less in unpaid tax can participate. Currently, only small businesses with under $10,000 in liabilities can participate. Small businesses will have 24 months to pay.
The streamlined Installment Agreements will be available for small businesses that file either as an individual or as a business. Small businesses with an unpaid assessment balance greater than $25,000 would qualify for the streamlined Installment Agreement if they pay down the balance to $25,000 or less.
Small businesses will need to enroll in a Direct Debit Installment Agreement to participate.
“Small businesses are an important part of the nation’s economy, and the IRS should help them when we can,” Shulman said, “By expanding payment options, we can help small businesses pay their tax bill while freeing up cash flow to keep funding their operations.”
A Fresh Start Offer in Compromise - Streamlined IRS Settlement
The IRS is also expanding a new streamlined Offer in Compromise (OIC) program to cover a larger group of struggling taxpayers.
This streamlined IRS settlement through the Fresh Start Offer in Compromise (OIC) is being expanded to allow taxpayers with annual incomes up to $100,000 to participate. In addition, participants must have tax liability of less than $50,000, doubling the current limit of $25,000 or less.
An Offer in Compromise is subject to acceptance based on legal requirements. An Offer in Compromise is an agreement between a struggling taxpayer and the IRS that will settle your tax liability for less than the full amount that you owe. An Offer in Compromise will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement. The IRS looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay.

The IRS Offer in Compromise formula takes into account your present earnings, long term income potential, your expenses, your age, the Statute of Limitations in relation to your tax liability along with other factors.

NEGOTIATING AN

OFFER in COMPROMISE

IS NOT THE SAME THING

AS NEGOTIATING A

CREDIT CARD DEBT

There is no "back and forth" negotiation. There is no "haggling." There is a process and procedure that needs to be followed and you had better be "on the money" with your settlement offer. If you are not "on the money" with your offer, the Offer Examiner will simply reject your Offer in Compromise and you will go back to step 1 in the process.


THE NUMBER 1 REASON YOUR

OFFER in COMPROMISE

WILL BE REJECTED

Bad Paperwork

By far the biggest reason most applications for IRS tax relief through the Offer in Compromise program are rejected is because the "i's" were not dotted and the "t's" were not crossed. Bad paperwork will get your settlement Offer rejected as "un-process-able." The IRS has not become, suddenly, "warm and fuzzy." The IRS is still charged with collecting as much money as possible. Rejected paperwork results in discouraged taxpayers who will give up on receiving an IRS Settlement. 

GET PROFESSIONAL IRS TAX RELIEF HELP

A professional Tax Relief Attorney, C.P. A. or an Enrolled Agent, who has had successful results regarding the Collection Division of the IRS, will be able to shepherd you through the Offer in Compromise process.

Three Types of OICs

The IRS may accept an offer in compromise based on three grounds:

1. Doubt as to Collectibility - Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection.

2. Doubt as to Liability - A legitimate doubt exists that the assessed tax liability is correct. Possible reasons to submit a doubt as to liability offer include: (1) the examiner made a mistake interpreting the law, (2) the examiner failed to consider the taxpayer’s evidence or (3) the taxpayer has new evidence.

3. Effective Tax Administration - There is no doubt that the tax is correct and there is potential to collect the full amount of the tax owed, but an exceptional circumstance exists that would allow the IRS to consider an OIC. To be eligible for compromise on this basis, a taxpayer must demonstrate that the collection of the tax would create an economic hardship or would be unfair and inequitable.


WHAT IS DOUBT AS TO COLLECTIBILITY?

YOU CANNOT PAY



I am Dave Rosa, the V. P. of Client Relations at Flat Fee Tax Service, Inc. I will be conducting your confidential consultation. It is my duty to you, as well as to Flat Fee Tax Service, Inc., to provide you with an honest and straightforward evaluation of your IRS problem. We do not employ salesmen. You will work directly with the Tax Attorney assigned to your case. we strive to keep our fees as low as possible so that we may pass our savings on to our clients. We only want clients that we can benefit in a positive way.

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2 comments:

  1. The IRS has announced new rules and regulations regarding streamlined Offer in Compromise settlements. If you cannot pay the IRS, look at settling with the IRS through the Offer in Compromise program.

    ReplyDelete
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