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What is the “silent lien” in IRS collections?
The \”silent lien,\” also known as the statutory federal tax lien, arises automatically by law under IRC 6321 when a taxpayer fails to pay a tax debt after the IRS has made a formal demand for payment. It is called \”silent\” because it is not publicly recorded,but it still legally attaches to all of the taxpayer\’s current and future assets, including real estate, vehicles, bank accounts, and personal property. The lien exists even if the taxpayer doesn\’t know about it.
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Challenging an Assessed Tax
- What are common reasons taxpayers dispute an assessed IRS tax debt?
- When can a taxpayer request audit reconsideration?
- What situations disqualify someone from audit reconsideration?
- What must be included in an audit reconsideration request?
- What happens after an audit reconsideration is submitted?
- Can collection activity be paused during audit reconsideration?
- What is a Collection Due Process (CDP) hearing?
- When must a taxpayer raise their liability issue during a CDP process?
- How does a taxpayer request a CDP hearing?
- What should be written in Box 8 of Form 12153 for a liability dispute?
- What is a Doubt-as-to-Liability Offer-in-Compromise (DATL-OIC)?
- What form is used to submit a DATL-OIC?
- When is a DATL-OIC appropriate?
- What must be included with a DATL-OIC?
- Can a DATL-OIC offer be $0?
- What happens if a DATL-OIC is rejected?
- Why must taxpayers stay in compliance during a DATL-OIC process?
- What is Innocent Spouse Relief?
- What form is used for Innocent Spouse Relief?
- What are the three types of Innocent Spouse Relief?
- What determines eligibility for 6015(b) relief?
- What are the key qualifications for 6015(c) Separation of Liability?
- When is 6015(f) Equitable Relief used?
- Is there a time limit for requesting 6015(f) relief?
- What factors does the IRS consider under 6015(f)?
- Can tax returns filed without one spouse's consent be challenged?
- What is tacit consent?
- What is the IRS's position on forged signatures and innocent spouse claims?
- What is the difference between an erroneous item and an underpayment?
- Which types of relief are available for erroneous items?
- Which relief applies to underpayment cases?
- Why is supporting documentation crucial for Innocent Spouse Relief?
- What supporting documents are helpful for innocent spouse cases?
- What happens if a taxpayer is uncollectible during an Innocent Spouse claim?
- Can a taxpayer challenge a Notice of Deficiency they never received?
- How can automated notices lead to incorrect tax assessments?
- What role does IRS Appeals play in tax liability disputes?
- What should a tax practitioner do when a client disputes a liability in collection?
- What are 'automated under-reporter audits' and how do they impact taxpayers?
- What is the first method to challenge an incorrect tax debt?
- Show all articles ( 25 ) Collapse Articles
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Collection Appeals
- What triggered the creation of IRS Collection Due Process (CDP) rights?
- What is the benefit of invoking CDP rights?
- What percentage of taxpayers currently request a CDP hearing?
- When can a taxpayer request a CDP hearing?
- How is a CDP hearing requested?
- What happens if the CDP request is filed on time?
- What if the taxpayer owes for older years not covered by the CDP request?
- What should practitioners include in Form 12153?
- Who handles the CDP hearing?
- How is a CDP hearing conducted?
- What must taxpayers provide to Appeals before a CDP hearing?
- What is a Notice of Determination?
- Can the taxpayer appeal the Notice of Determination?
- What is the legal standard in Tax Court for CDP cases?
- What is an Equivalent Hearing?
- When must an Equivalent Hearing be requested?
- How do you request an Equivalent Hearing?
- What happens if Box 2 is not checked when requesting an Equivalent Hearing?
- What is the Collection Appeals Program (CAP)?
- What actions can be appealed under CAP?
- What steps must be taken before filing a CAP appeal?
- What form is used for a CAP appeal?
- How soon will a Settlement Officer respond after filing a CAP appeal?
- Can taxpayers challenge the amount they owe during a CDP hearing?
- What should practitioners do if underlying liability is disputed?
- Show all articles ( 10 ) Collapse Articles
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Criminal Tax
- What is tax evasion under IRC 7201? What causes a case to become criminal?
- Does Tax Evasion also cover collection cases?
- What is an example of evasion of assessment?
- What is an example of evasion of payment?
- Who can be guilty of tax evasion?
- Can you be charged for helping someone else evade taxes?
- What are the elements of evasion of assessment?
- What counts as an "attempt" to evade tax?
- What are examples of affirmative acts?
- Is just not filing a return enough for tax evasion?
- Does lying to an IRS agent count as evasion?
- Does a tax deficiency have to be large to be criminal?
- What kinds of income are taxable even if not listed in the code?
- Does the IRS have to formally assess the tax before charging evasion?
- Does the government have to prove the exact amount of tax owed?
- Is a good-faith misunderstanding of the law a defense?
- Can a client have a defense if they believed that they were not required to pay tax?
- How do prosecutors prove "willfulness"?
- Where can tax evasion be prosecuted?
- What is the statute of limitations for tax evasion?
- How can tax professionals get into trouble criminally?
- What does Obstruction under 7212(a) cover?
- What is 7212(b)?
- Can the IRS Revenue Agent or Revenue Officer lie to a taxpayer to get them to share information?
- How can a tax professional work on a criminal tax case?
- What is tax evasion under IRC 7201? What causes a case to become criminal?
- What's an example of evasion of assessment?
- What's an example of evasion of payment?
- What does Obstruction under 7212(a) cover?
- What's 7212(b)?
- United States v. Klein, 247 F.2d 908 (1957)
- United States v. Kovel, 296 F.2d 918 (2d Cir. 1961)
- Tweel, Nicholas J. v. United States, 77-1 U.S. Tax Cas. (CCH) P9330 (1977)
- Show all articles ( 18 ) Collapse Articles
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IRS Audits
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- Why do clients get so nervous about an IRS audit?
- What are the main reasons a tax return might be selected for audit?
- What are the three main types of IRS audits?
- How should you prepare a client for an audit?
- How should you handle the relationship with the auditor?
- Why is preparation so important in an audit?
- What ethical rules should tax professionals keep in mind during an audit?
- What is a "conflict of interest" in an audit setting?
- Can the IRS request any document it wants?
- Can the IRS examine older returns beyond the three year ASED?
- What mistakes should you avoid during an audit?
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- What is the first notice a taxpayer receives when the IRS starts an exam?
- What is an Information Document Request (IDR)?
- Should you only give the IRS exactly what they ask for in the IDR?
- What happens after the IRS reviews all the documents?
- How should you respond if you disagree with the IRS's proposed changes?
- What is a Notice of Deficiency, and when is it issued?
- What happens after filing a petition in U.S. Tax Court?
- What if the taxpayer misses the 90-day deadline to file in Tax Court?
- When should you use a doubt as to liability offer instead of audit reconsideration?
- How long can audit reconsideration take, and does it stop collection?
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- What is the best overall strategy for preparing for an IRS exam?
- What is an IDR and why is it important?
- What is the fastest way to shut down an audit?
- When should you hold back documents from the IRS?
- Why is a retainer important before starting an exam?
- How should you fill out a Power of Attorney (Form 2848) for an audit?
- Why should you review multiple years of returns before an audit?
- What is the number one thing clients must do after hiring you for an audit?
- How can social media hurt an audit case?
- Why should you visit the client's office or home office before the audit?
- What is the issue with the QuickBooks file request?
- Should the taxpayer be interviewed by the IRS?
- Why pull a Wage and Income Transcript before the audit?
- Why is quick client cooperation critical during the audit?
- What is the key to getting a good result in an audit?
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- What is the first step if a client's records are incomplete or disorganized?
- What should you do if a client claims they "have nothing" for records?
- Is paying for business expenses in cash a problem?
- What is the Cohan Rule?
- What types of expenses can't be estimated under the Cohan Rule?
- How does the Cohan Rule work in practice?
- Why is it important to separate business and personal purchases?
- What are some IRS methods for reconstructing income?
- What is the specific item method?
- How can a forensic accountant help in these situations?
- What is Form 433-A and how can it help reconstruct income?
- How was Form 433-A used in the example from the transcript?
- What if the taxpayer had a "cash hoard"?
- What is the main takeaway when client records are lacking?
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- What is a correspondence audit?
- How common are correspondence audits?
- Why does the IRS use correspondence audits so often?
- What is the main drawback for taxpayers in correspondence audits?
- How much time does the IRS usually give to respond in a correspondence audit?
- What is the best first step when you receive a correspondence audit letter?
- How should you organize your response to the IRS?
- What is a "combo letter" (Letter 525)?
- What is a "pre-refund" correspondence audit?
- What common problem occurs when submitting documents in a correspondence audit?
- Can you request that a correspondence audit be transferred to a local IRS office?
- What usually happens at the end of a correspondence audit?
- Why do many taxpayers lose correspondence audit cases?
- If you lose a correspondence audit, what are your options to reopen the case?
- What is the key to improving your chances in a correspondence audit?
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- What is IRS Fast Track Mediation?
- When can Fast Track Mediation be used?
- Who participates in Fast Track Mediation?
- How long does a Fast Track Mediation session last?
- Can the mediator impose a decision?
- When is Fast Track Mediation a good idea?
- What is an example of a case that worked well for Fast Track Mediation?
- When is Fast Track Mediation NOT worth pursuing?
- How can it be used in an Offer in Compromise case?
- What are the benefits of Fast Track Mediation?
- Does using Fast Track Mediation give up appeal rights?
- What form is used to request Fast Track Mediation?
- How does the process end if both sides agree?
- How quickly can it resolve a large dispute?
- What is the key to success in Fast Track Mediation?
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- What is a cash-intensive business?
- Why are cash-intensive businesses audited differently?
- What are the first records an auditor will compare?
- What should you check before an audit starts?
- What is the "tax gap"?
- What are common ways owners skim cash from a business?
- What is a "zapper" program?
- How does the IRS identify unreported income in cash businesses?
- What are examples of cash-intensive businesses the IRS still targets?
- What indirect methods might the IRS use in these audits?
- What is a cash T (minimum income) analysis?
- Can the IRS summon records from third parties?
- How does the IRS use industry standards in audits?
- How should you handle an auditor who claims a business is cash-intensive when it isn't?
- What is the most important preparation tip for these audits?
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- What major change happened in 2018 regarding partnership audits?
- How were partnerships audited before 2018 under TEFRA?
- Under the new BBA rules, who is responsible for paying audit underpayments?
- Why might a partnership want to opt out of the centralized audit regime?
- How can a partnership opt out of the centralized audit regime?
- Who is considered an "eligible partner" for opting out?
- What is the role of the Partnership Representative under the BBA?
- Why can the Partnership Representative role be frustrating for some partners?
- In the new regime, when is the tax underpayment assessed?
- If a partnership expects partner changes, what should they consider when filing their return?
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- What is a "hobby loss" under IRS rules?
- When does the IRS conduct a hobby loss exam?
- Do hobby loss rules apply to all business types?
- Why is taxpayer intent important in a hobby loss exam?
- What is the "3 out of 5 years" rule?
- Can you still win a hobby loss case if you don't meet the profit-year presumption?
- What are the 9 factors the IRS looks at when determining of the activity is for profit or a hobby?
- What is an example of a non-business-like manner?
- What is the second factor the IRS looks at?
- How does time and effort play into the IRS's decision?
- Why does the expectation of asset appreciation matter?
- Does a taxpayer's prior success or failure in similar activities matter?
- How does a history of income or losses affect the case?
- Does the amount of occasional profit matter?
- How does financial status affect the determination?
- Does personal enjoyment of the activity mean It is a hobby?
- How many of the nine factors must be in your favor to win?
- How should a preparer handle a client with ongoing losses?
- Is a preparer required to audit their client under Circular 230?
- Why should preparers document their inquiries?
- What kind of evidence can help prove a profit motive?
- Can advertising be minimal and still count?
- What should you do before filing a return for a loss-making activity?
- What is the ultimate goal in a hobby loss exam?
- Gullion, Thomas Allen v. Commissioner, T.C. Summary Opinion 2013-65 (2013)
- Dennis v. Commissioner, T.C. Memo. 2010-216, (2010)
- Show all articles ( 11 ) Collapse Articles
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- What is an "eggshell audit"?
- Why is it called an "eggshell" audit?
- What is the primary goal in an eggshell audit?
- Does the accountant-client privilege protect in criminal cases?
- What should a CPA or EA do if they suspect fraud?
- What is a Kovel accountant?
- Why shouldn't the original tax preparer be the Kovel accountant?
- What is a "dummy accountant" in this context?
- What is an "affirmative act" of fraud?
- What are some warning signs an audit may be headed toward criminal referral?
- Why is excessive copying a red flag?
- Why might an agent go silent during an audit?
- What is the U.S. v. Tweel case about?
- How has the IRS adapted to avoid another Tweel situation?
- What happens after a criminal tax conviction?
- What two code sections can penalize practitioners for wrongdoing in audits?
- Why is destroying client records a bad idea?
- How should practitioners protect themselves in an eggshell audit?
- Show all articles ( 3 ) Collapse Articles
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- What happens if you disagree with the results of an IRS audit?
- What is a Notice of Deficiency?
- Why might someone wait for the 90-day Notice of Deficiency before appealing?
- How fast can you get an Appeals hearing through Tax Court?
- What is IRS Appeals?
- How is an Appeals conference different from court?
- What is key to success in Appeals?
- Can you raise penalty abatement in Appeals?
- Why might you appeal issues you know you'll lose?
- When can you make a Qualified Offer?
- What happens if the IRS accepts your Qualified Offer?
- What is the main benefit of a Qualified Offer?
- What is the filing fee for U.S. Tax Court?
- How do you file in Tax Court?
- Who responds to your Tax Court petition?
- What happens if the case hasn't been to Appeals before Tax Court?
- How often do Tax Court cases actually go to trial?
- What is a stipulated decision?
- Why is settling often better than going to trial?
- Show all articles ( 5 ) Collapse Articles
- Why do clients get so nervous about an IRS audit?
- What are the main reasons a tax return might be selected for audit?
- What are the three main types of IRS audits?
- How should you prepare a client for an audit?
- How should you handle the relationship with the auditor?
- Why is preparation so important in an audit?
- What ethical rules should tax professionals keep in mind during an audit?
- What is a "conflict of interest" in an audit setting?
- Can the IRS request any document it wants?
- Can the IRS examine older returns beyond the three year ASED?
- What mistakes should you avoid during an audit?
- What is the first notice a taxpayer receives when the IRS starts an exam?
- What is an Information Document Request (IDR)?
- Should you only give the IRS exactly what they ask for in the IDR?
- What happens after the IRS reviews all the documents?
- How should you respond if you disagree with the IRS's proposed changes?
- What is a Notice of Deficiency, and when is it issued?
- What happens after filing a petition in U.S. Tax Court?
- What if the taxpayer misses the 90-day deadline to file in Tax Court?
- When should you use a doubt as to liability offer instead of audit reconsideration?
- How long can audit reconsideration take, and does it stop collection?
- What is the best overall strategy for preparing for an IRS exam?
- What is an IDR and why is it important?
- What is the fastest way to shut down an audit?
- When should you hold back documents from the IRS?
- Why is a retainer important before starting an exam?
- How should you fill out a Power of Attorney (Form 2848) for an audit?
- Why should you review multiple years of returns before an audit?
- What is the number one thing clients must do after hiring you for an audit?
- How can social media hurt an audit case?
- Why should you visit the client's office or home office before the audit?
- What is the issue with the QuickBooks file request?
- Should the taxpayer be interviewed by the IRS?
- Why pull a Wage and Income Transcript before the audit?
- Why is quick client cooperation critical during the audit?
- What is the key to getting a good result in an audit?
- What is the first step if a client's records are incomplete or disorganized?
- What should you do if a client claims they "have nothing" for records?
- Is paying for business expenses in cash a problem?
- What is the Cohan Rule?
- What types of expenses can't be estimated under the Cohan Rule?
- How does the Cohan Rule work in practice?
- Why is it important to separate business and personal purchases?
- What are some IRS methods for reconstructing income?
- What is the specific item method?
- How can a forensic accountant help in these situations?
- What is Form 433-A and how can it help reconstruct income?
- How was Form 433-A used in the example from the transcript?
- What if the taxpayer had a "cash hoard"?
- What is the main takeaway when client records are lacking?
- What is a correspondence audit?
- How common are correspondence audits?
- Why does the IRS use correspondence audits so often?
- What is the main drawback for taxpayers in correspondence audits?
- How much time does the IRS usually give to respond in a correspondence audit?
- What is the best first step when you receive a correspondence audit letter?
- How should you organize your response to the IRS?
- What is a "combo letter" (Letter 525)?
- What is a "pre-refund" correspondence audit?
- What common problem occurs when submitting documents in a correspondence audit?
- Can you request that a correspondence audit be transferred to a local IRS office?
- What usually happens at the end of a correspondence audit?
- Why do many taxpayers lose correspondence audit cases?
- If you lose a correspondence audit, what are your options to reopen the case?
- What is the key to improving your chances in a correspondence audit?
- What is IRS Fast Track Mediation?
- When can Fast Track Mediation be used?
- Who participates in Fast Track Mediation?
- How long does a Fast Track Mediation session last?
- Can the mediator impose a decision?
- When is Fast Track Mediation a good idea?
- What is an example of a case that worked well for Fast Track Mediation?
- When is Fast Track Mediation NOT worth pursuing?
- How can it be used in an Offer in Compromise case?
- What are the benefits of Fast Track Mediation?
- Does using Fast Track Mediation give up appeal rights?
- What form is used to request Fast Track Mediation?
- How does the process end if both sides agree?
- How quickly can it resolve a large dispute?
- What is the key to success in Fast Track Mediation?
- What is a cash-intensive business?
- Why are cash-intensive businesses audited differently?
- What are the first records an auditor will compare?
- What should you check before an audit starts?
- What is the "tax gap"?
- What are common ways owners skim cash from a business?
- What is a "zapper" program?
- How does the IRS identify unreported income in cash businesses?
- What are examples of cash-intensive businesses the IRS still targets?
- What indirect methods might the IRS use in these audits?
- What is a cash T (minimum income) analysis?
- Can the IRS summon records from third parties?
- How does the IRS use industry standards in audits?
- How should you handle an auditor who claims a business is cash-intensive when it isn't?
- What is the most important preparation tip for these audits?
- What major change happened in 2018 regarding partnership audits?
- How were partnerships audited before 2018 under TEFRA?
- Under the new BBA rules, who is responsible for paying audit underpayments?
- Why might a partnership want to opt out of the centralized audit regime?
- How can a partnership opt out of the centralized audit regime?
- Who is considered an "eligible partner" for opting out?
- What is the role of the Partnership Representative under the BBA?
- Why can the Partnership Representative role be frustrating for some partners?
- In the new regime, when is the tax underpayment assessed?
- If a partnership expects partner changes, what should they consider when filing their return?
- What is a "hobby loss" under IRS rules?
- When does the IRS conduct a hobby loss exam?
- Do hobby loss rules apply to all business types?
- Why is taxpayer intent important in a hobby loss exam?
- What is the "3 out of 5 years" rule?
- Can you still win a hobby loss case if you don't meet the profit-year presumption?
- What are the 9 factors the IRS looks at when determining of the activity is for profit or a hobby?
- What is an example of a non-business-like manner?
- What is the second factor the IRS looks at?
- How does time and effort play into the IRS's decision?
- Why does the expectation of asset appreciation matter?
- Does a taxpayer's prior success or failure in similar activities matter?
- How does a history of income or losses affect the case?
- Does the amount of occasional profit matter?
- How does financial status affect the determination?
- Does personal enjoyment of the activity mean It is a hobby?
- How many of the nine factors must be in your favor to win?
- How should a preparer handle a client with ongoing losses?
- Is a preparer required to audit their client under Circular 230?
- Why should preparers document their inquiries?
- What kind of evidence can help prove a profit motive?
- Can advertising be minimal and still count?
- What should you do before filing a return for a loss-making activity?
- What is the ultimate goal in a hobby loss exam?
- What is an "eggshell audit"?
- Why is it called an "eggshell" audit?
- What is the primary goal in an eggshell audit?
- Does the accountant-client privilege protect in criminal cases?
- What should a CPA or EA do if they suspect fraud?
- What is a Kovel accountant?
- Why shouldn't the original tax preparer be the Kovel accountant?
- What is a "dummy accountant" in this context?
- What is an "affirmative act" of fraud?
- What are some warning signs an audit may be headed toward criminal referral?
- Why is excessive copying a red flag?
- Why might an agent go silent during an audit?
- What is the U.S. v. Tweel case about?
- How has the IRS adapted to avoid another Tweel situation?
- What happens after a criminal tax conviction?
- What two code sections can penalize practitioners for wrongdoing in audits?
- Why is destroying client records a bad idea?
- How should practitioners protect themselves in an eggshell audit?
- What happens if you disagree with the results of an IRS audit?
- What is a Notice of Deficiency?
- Why might someone wait for the 90-day Notice of Deficiency before appealing?
- How fast can you get an Appeals hearing through Tax Court?
- What is IRS Appeals?
- How is an Appeals conference different from court?
- What is key to success in Appeals?
- Can you raise penalty abatement in Appeals?
- Why might you appeal issues you know you'll lose?
- When can you make a Qualified Offer?
- What happens if the IRS accepts your Qualified Offer?
- What is the main benefit of a Qualified Offer?
- What is the filing fee for U.S. Tax Court?
- How do you file in Tax Court?
- Who responds to your Tax Court petition?
- What happens if the case hasn't been to Appeals before Tax Court?
- How often do Tax Court cases actually go to trial?
- What is a stipulated decision?
- Why is settling often better than going to trial?
- Show all articles ( 152 ) Collapse Articles
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IRS Tax Liens
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- What are the four main options for resolving a tax debt with the IRS?
- What is an Installment Agreement?
- Why does the IRS prefer to collect as quickly as possible under Installment Agreements?
- What financial standard does the IRS use when reviewing installment agreements?
- What are the five types of Installment Agreements?
- What is a Streamlined Installment Agreement?
- What are the requirements for an Automatic Installment Agreement?
- What is a Regular Installment Agreement?
- What is the One-Year Rule for Installment Agreements?
- What is the Six-Year Rule in IRS collections?
- What is a Partial Pay Installment Agreement (PPIA)?
- When does the IRS revisit a PPIA?
- What causes a default of an Installment Agreement?
- What is IRS Form 433-A used for?
- What is Uncollectible Status?
- Does Uncollectible Status eliminate the tax debt?
- What is the benefit of Uncollectible Status?
- What form is used to request CNC status?
- Can a taxpayer in CNC status have unfiled returns?
- What was the significance of Vinatieri v. Commissioner?
- What is an Offer in Compromise (OIC)?
- What are the two types of OIC?
- What is Reasonable Collection Potential (RCP)?
- What forms are used for an OIC?
- What are the payment options for an OIC?
- What is included in RCP calculations
- What is the OIC application fee?
- Can the IRS reject an OIC?
- What happens if a taxpayer can pay in full?
- What is bankruptcy's role in tax debt resolution?
- What is the Automatic Stay in bankruptcy?
- Taxes are generally not dischargeable in bankruptcy. However, under certain circumstances income taxes may be dischargeable. Under what circumstances are income taxes dischargeable?
- What is the "Three-Year Rule" for bankruptcy discharge?
- What is the "240-Day Rule" in bankruptcy?
- What is the "Two-Year Rule" for late-filed returns?
- Can payroll taxes and/or sales taxes be discharged in bankruptcy?
- Are penalties dischargeable in bankruptcy?
- What about interest on tax debts in bankruptcy?
- What is the role of a Chapter 11 or 13 bankruptcy?
- Can tax liens be eliminated in bankruptcy?
- Should a tax practitioner recommend bankruptcy?
- Why is the statute of limitations important in tax resolution?
- What is Form 433-D used for?
- What happens if a taxpayer pays a non-dischargeable tax with a credit card?
- Can an OIC include virtual currency or foreign assets?
- Show all articles ( 30 ) Collapse Articles
- What is the "silent lien" in IRS collections?
- What are the three legal requirements for a federal tax lien to arise?
- What is a Notice of Federal Tax Lien (NFTL)?
- Can the IRS file an NFTL even if the taxpayer owes less than $50,000?
- What is the IRS's interest in a taxpayer's assets based upon the NFTL?
- What does it mean for a lien to be "choate"?
- Do federal tax liens always take priority over other liens?
- What are "super-priority" liens?
- Why do mortgage companies pay delinquent property taxes on behalf of borrowers?
- How can a family loan be protected from IRS collection actions?
- Under what conditions will the IRS consider withdrawing an NFTL?
- Are IRS tax liens self-releasing?
- Can the IRS refile a lien just to extend its time to collect taxes?
- Where does the IRS typically file an NFTL?
- Does an IRS lien affect a spouse's property if the spouse is not on the lien?
- What is the taxpayer's right to a hearing after a lien is filed?
- Can a taxpayer sell a home that has an IRS tax lien on it?
- What if the taxpayer sells the property in a short-sale and will not receive any money from the deal?
- What is a subordination of a tax lien?
- What is a Certificate of Non-Attachment?
- What are alter ego and nominee liens?
- Drye, Rohn F., Jr., et al. v. United States, 528 U.S. 49 (1999)
- United States v. Craft, 535 U.S. 274 (2002)
- United States v. Lucille Mitzi Bosco Rodgers, Supreme Court of the United States, No. 81-1476, 103 SCt 2132, 461 US 677, 5/31/83
- Show all articles ( 10 ) Collapse Articles
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IRS Tax Levies
- What is a federal tax levy?
- What notice must the IRS provide before issuing a levy?
- What is a regular levy?
- How long will a bank hold funds after receiving an IRS levy?
- What is a continuing levy?
- Why are continuing levies especially burdensome?
- What can a taxpayer do to stop a continuing wage levy?
- Can the IRS levy retirement accounts?
- What determines whether a retirement account can be levied?
- What is a disqualified employment tax levy?
- How can a taxpayer avoid a levy?
- What should practitioners do if a levy has already occurred?
- Can levied funds be returned to the taxpayer?
- What assets are exempt from IRS levy?
- What is the 50% penalty related to employer levy compliance?
- IRC 6343 requires levies to be released under what circumstances?
- What did the Vinatieri v. Commissioner case establish?
- What happens if a taxpayer misses deadlines to submit IRS documents after a levy?
- Can a levy continue beyond the collection statute expiration?
- What is the IRS limit on levying Social Security?
- What is the process for requesting a partial levy release?
- What is a hot tip for evaluating a bank levy before you call the IRS and sit on the phone for two hours?
- Why do taxpayers receive multiple IRS notices before a levy?
- Why does the IRS use levies as a collection tool?
- What must a taxpayer do to qualify for levy release under economic hardship?
- Vinatieri, Kathleen A. v. Commissioner, 133 T.C. 392 (2009)
- United States v. Bell Credit Union, 860 F.2d 365, 369 (10th Cir. 1988)
- United States v. National Bank of Commerce, 472 U.S. 713 (1985)
- Ward Franklin Dean v. United States (2021, 11th Circuit)
- Show all articles ( 14 ) Collapse Articles
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Resolving Payroll Tax Debts
- Why are payroll taxes a common issue for small businesses?
- Why are unpaid payroll taxes referred to as the "easiest loan to take and the hardest to pay back"?
- How do unpaid payroll taxes create personal liability for business owners?
- What portion of federal revenue is collected through payroll taxes?
- What are the primary payroll tax forms employers must file?
- What is FICA, and what are its components?
- What are "trust funds" in the payroll tax context?
- What is IRC 6672?
- What two conditions must be met for 6672 liability?
- How does the IRS define willfulness under 6672?
- What is the Trust Fund Recovery Penalty (TFRP)?
- What tool does the IRS use to investigate who is responsible for unpaid payroll taxes?
- Why should tax practitioners avoid letting clients attend Form 4180 interviews alone?
- What is IRS Letter 1153?
- How long does a taxpayer have to protest a Letter 1153 assessment?
- What is IRC 3505?
- What are the criminal statutes associated with payroll tax noncompliance?
- Has there been an increase in criminal payroll tax enforcement?
- What is the FTD Alert Program?
- What are the three FTD Alert categories?
- What is the IRS's goal with FTD Alerts?
- How quickly should a Revenue Officer respond to an FTD Alert?
- What is the IRS doing since 2022 to address payroll tax misuse?
- Can payroll tax misuse lead to income tax fraud charges?
- What should practitioners do if the IRS assesses a fraud penalty related to payroll tax use?
- Honey, Charles L. v. United States, 92-1 U.S. Tax Cas. (CCH) P50,253 (1992)
- Hochstein, Arnold v. United States, 900 F.2d 543 (1990)
- United States of America, Plaintiff-Appellee v. Huckabee Auto Co., et al., 783 F2d 1546 (1986)
- Custom Stairs & Trim Ltd. v. Commissioner, T.C. Memo. 2011-155 (2011)
- Slodov, Ike v. United States, 436 U.S. 238 (1978)
- Joseph F. Purcell, v. United States of America, U.S. Court of Appeals, 9th Circuit, 1 F3d 932 (1993)
- Show all articles ( 16 ) Collapse Articles
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Offers-in-Compromise
-
- Do you charge for consultations, and if so what do you provide to justify that consult fee?
- I am a newly enrolled agent (EA) and would like to go into practice on my own. Is an EA designation enough? Or do I need to get another license and become a CPA?
- Do you think it is a conflict of interest for a CPA who is handling a taxpayer's resolution to also prepare & sign the taxpayer's prior delinquent tax returns?
- Can you charge for the offer based upon a percentage of what you will save the taxpayer?
- What do you do if the client expects me to do this work as part of their tax preparation?
- Can you set up a client with a monthly payment plan for your fees? Is that a violation of circular 230?
- What are the criteria for being accepted into the Offer-In-Compromise program?
-
- If you are filing a bunch of missing tax returns, should I mail them all together or mail some and e-file the last three years that are eligible for e-filing?
- If the taxpayers were non-filers and now suddenly file their tax returns as married filing separately, does that raise a red flag with the IRS?
- Does it make sense to amend the tax returns to become married-filing-separate and prevent the spouse from being responsible for the debt?
- If the IRS filed Substitute-for-Returns on my client, do I need to file the actual returns before submitting an Offer?
- I have a client that has not filed for the last 10 years. How many returns should I file?
- How do you file the state tax return first, because if you e-file they go in together?
- When filing delinquent returns when you want to file an offer-in-compromise, do you send the returns with the OIC, do you file the returns with the RO, do you file at the address in the 1040 instructions, or do you do all 3?
- If someone is uncollectible then they are not required to be in tax compliance. If my taxpayer is uncollectible, can they file an offer even if all of their tax returns are not filed?
-
- Are estimated tax payments still required if the self-employed person had a loss the year before?
- Do you have to show estimated tax payments of a certain level for a self-employed person?
- How are estimated tax payments determined?
- If I need to file an Offer in the second half of the year, can I make up estimated tax payments even if they are late or do I need to wait until next year to file the Offer?
- If I am sending in several estimated tax payments for my client to get into compliance, must I make separate payments or can I lump them together and send one payment to cover 3 quarters?
-
- The IRS says my client must be in tax compliance, but what does that mean?
- How long does the IRS have to collect a tax?
- When does the Collection Statute begin to run?
- What is the difference between a "lump-sum" offer and a "short-term deferred" offer?
- What is an "Effective Tax Administration," or ETA Offer?
- How do you complete Form 2848 when you are not sure what years are filed or not filed?
- What is a Doubt as to Liability offer?
- What is the "low-income certification" for purposes of filing an Offer?
- Can you ever get more than 24 months for a deferred Offer?
- What if only one spouse owes the tax?
- Can one spouse file an Offer on a joint tax liability if the other does not want to participate?
- How do you determine if the taxpayer can full-pay if they have multiple Collection Statute Expiration Dates ("CSED's")?
- How hard is it to get an offer with the IRS?
- What forms must be filled out to file an Offer-in-Compromise?
- How much does it cost to apply?
- Can you default and void an Offer-in-Compromise?
- What is the minimum you can offer?
- How much does it cost to submit an Offer-In-Compromise?
- The IRS does not compromise on payroll taxes, correct?
- Does the IRS consider a potential bankruptcy filing by the taxpayer in determining whether to accept the taxpayer's Offer-in-Compromise?
- Show all articles ( 5 ) Collapse Articles
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- If my client's income is currently down, is now the best time to file an Offer?
- How does the IRS treat the business assets for purposes of the Offer?
- If a taxpayer has died can they still file an Offer-in-Compromise?
- Does making installment agreement payments keep the collection statute open?
- I have a client on an installment agreement. Can they file an Offer?
- What is the impact of the Community Property Laws on a taxpayer's Offer?
- I have a married couple that owe taxes independently from before marriage and now owe for the last several years together. Can we do this as one Offer?
- My client owes for 9 years of taxes. Can he compromise on the earliest five and then do a payment plan on the most recent four years?
- Would you ever consider bankruptcy as a better option to solve a tax issue?
- Can an offer be filed if the client is in bankruptcy?
- The IRS says my client, who has lived in Italy for the last 15 years, still owes the taxes they owed when they moved to Italy. We have been fighting with them because the ten-year Collection Statute has expired. Do you have any advice?
- Is RCP calculated on a monthly or annual basis?
- On your podcast you mention strategies to adjust an RCP calculation. Can you elaborate?
- Are 401K contributions allowed as a future expense for the RCP calculation?
- What about someone who is older and will be retiring in two years. Will the IRS factor that in when figuring RCP?
-
- What if we file an Offer and the IRS calculates a higher RCP amount?
- Does my client have to include their retirement accounts in their RCP analysis?
- Are credit card payments an allowable expense for the Offer RCP calculation?
- What is the RCP calculation?
- What if the Taxpayer cannot access the equity in their assets? Can it be excluded from the Offer calculation?
-
- I have an elderly client with no future income. They owe $86,000 but have $900,000 of equity in their home. Can I explain to the IRS that they cannot get a mortgage, so the IRS should ignore the equity in the home and accept an Offer?
- What if only one spouse owes the back tax debt, the spouses live in a community property state but have real estate in a separate property state?
- If a client pulls equity out of their house before the tax returns are assessed and pays off their credit cards, will the IRS look at that as fraud?
- If a taxpayer takes a loan against their assets for the Offer, like a home equity line or a 401(k) loan, can they deduct the loan repayment against their future income?
- Is money in a 529 account includible as an asset for an Offer?
- I have a client that suggested he could make his cash in the bank disappear. Is it okay or would the IRS suspect something?
- The Offer Specialist we are dealing with is adding in the PPP Loan Forgiveness as an asset for purposes of their Offer. Is this correct?
- My client has an EIDL loan from the federal government and the IRS claims they can take the amount available and use it to pay their debt, and so are including it in their Offer calculation. My understanding is that the IRS does not require you to take loans to pay them. Can you confirm this, and what should I respond with?
-
- Can you adjust a taxpayer's withholding to reduce their income and help them get their Offer accepted?
- The IRS is forcing my client to include the child support payments as income, why?
- What if the client's income swings up and down so there is no clear picture of their normal level of income?
- If the IRS averages the taxpayer's income over the last 3 years, do they use that for the RCP calculation instead of their current income?
- I have a taxpayer that received phantom income from a pass through but no cash. Does this income have to be included?
- What if the client has a W-2 but not enough withholding?
- Do I use 12 months of future income for a lump sum offer or the 80 months remaining on the CSED?
- The IRS is adding my client's EIDL loan in as future income from his business. Wont the IRS have to allow an offsetting expense for the repayment of the loan back to the federal government?
-
- The taxpayer has two vehicles in their name: their own, which is leased, and their college age child's, which has no payment. IRS will not allow the taxpayer's car payment. Why?
- My client pays for after-school care for their two children. Is this allowed?
- If an expense is not allowed for the Offer does that mean the taxpayer cannot pay the expense?
- Are college tuition payments for the taxpayer's children allowed as an expense for an Offer-in-Compromise if they are REQUIRED under the divorce decree?
- My client donates to charity every year. Is this an allowable expense?
- If spouses are separated and both have housing expenses can they claim both of their housing expenses for calculating their Offer?
- Can the taxpayer get both auto expense and public transportation as deductions when calculating future income for their Offer?
- How often does the IRS update its expense standards for Offers?
- Can the taxpayer challenge the IRS expense standards as being abusive because they are so limiting?
- How do you know what the standards for expenses are if the taxpayer lives in a foreign country?
- Can I claim childcare expenses if the stay-at-home spouse is disabled?
- For the car payment limits, what if one spouse's car payment is higher than the allowable standard and the other spouse's car payment is lower than the standard? Can you average them or add them together?
- Can you claim medical deductions for a taxpayer's mother?
- How can the professional representative become a "future expense" and have our fees factored into the Offer?
- What do you do with clients that pay for everything in cash and cannot prove their expenses?
- What is included in the housing expense?
- My client has multiple Schedule C businesses, some of which lose money. The IRS is only using the positive income businesses and ignoring the losses from the others. Is this accurate?
- The IRS Offer Specialist told us they will not allow my client's current tax payments because they do not have a history of paying their taxes. This seems wrong - how can a taxpayer maintain their tax payments if the IRS will not allow them?
- Show all articles ( 4 ) Collapse Articles
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- How many months of bank account statements should we include with the Offer package?
- Who should the checks be made out to and what should be written on the memo line?
- Should I include a cover letter with my Offer package?
- Do I file the Offer with the Revenue Officer, or should I mail it into the Centralized Offer Unit listed in the instructions?
- What are the differences between the types of Offers-in-Compromise?
- How do you know if you should file a Lump-Sum Offer or a Periodic Deferred Offer?
- If we submit a Periodic Offer, do we have to pay it evenly over the twenty-four months?
- If your client qualifies for an ETA Offer, how do you determine how much to Offer?
- For a Doubt-as-to-Collectibility Offer with Special Circumstances, how do you decide which expenses to argue for a departure from the standards?
-
- I have a client that filed an Offer, and the Offer unit closed their file and returned it because they had an audit adjustment on a tax year come out. Can they do that?
- What are your options if there was an offer in compromise that was returned due to noncompliance?
- My client has a schedule C business, and the Offer Specialist at the IRS won't allow the car payment for their Offer because they are using it in the business. Do you agree?
- When you appeal the denied offer do you go to Tax Court? Can an accountant still represent the taxpayer at Appeals?
- If you file a deferred Offer, and the offer is rejected, do you still need to make periodic payments while you wait for your Appeals hearing?
- If the client's financial situation changes after the Offer is accepted, can it be renegotiated?
- If Appeals only looks at the OIC as filed, what happens if circumstances have changed for the worse since the OIC was filed? Can the Offer be reduced?
- How is an Offer computation and future payments effected by divorce?
- How long does the IRS have to respond to an offer in compromise?
- Can the IRS file a lien after an offer is submitted?
- Where will the payments be applied?
- Appeals accepted the Offer but wants my client to waive their tax court rights. Should we agree to sign it?
- What if the IRS calculates a higher amount than the amount my client offered? Is the Offer dead?
- Does the IRS have a set time limit for reviewing an offer in compromise?
- If my client's Offer was accepted but now they can no longer afford to pay the Offered amount, can they renegotiate or do they have to start over again?
- Are offers-in-compromise considered cancellation of debt income after acceptance by the IRS?
- Show all articles ( 1 ) Collapse Articles
- Do you charge for consultations, and if so what do you provide to justify that consult fee?
- I am a newly enrolled agent (EA) and would like to go into practice on my own. Is an EA designation enough? Or do I need to get another license and become a CPA?
- Do you think it is a conflict of interest for a CPA who is handling a taxpayer's resolution to also prepare & sign the taxpayer's prior delinquent tax returns?
- Can you charge for the offer based upon a percentage of what you will save the taxpayer?
- What do you do if the client expects me to do this work as part of their tax preparation?
- Can you set up a client with a monthly payment plan for your fees? Is that a violation of circular 230?
- What are the criteria for being accepted into the Offer-In-Compromise program?
- If you are filing a bunch of missing tax returns, should I mail them all together or mail some and e-file the last three years that are eligible for e-filing?
- If the taxpayers were non-filers and now suddenly file their tax returns as married filing separately, does that raise a red flag with the IRS?
- Does it make sense to amend the tax returns to become married-filing-separate and prevent the spouse from being responsible for the debt?
- If the IRS filed Substitute-for-Returns on my client, do I need to file the actual returns before submitting an Offer?
- I have a client that has not filed for the last 10 years. How many returns should I file?
- How do you file the state tax return first, because if you e-file they go in together?
- When filing delinquent returns when you want to file an offer-in-compromise, do you send the returns with the OIC, do you file the returns with the RO, do you file at the address in the 1040 instructions, or do you do all 3?
- If someone is uncollectible then they are not required to be in tax compliance. If my taxpayer is uncollectible, can they file an offer even if all of their tax returns are not filed?
- Are estimated tax payments still required if the self-employed person had a loss the year before?
- Do you have to show estimated tax payments of a certain level for a self-employed person?
- How are estimated tax payments determined?
- If I need to file an Offer in the second half of the year, can I make up estimated tax payments even if they are late or do I need to wait until next year to file the Offer?
- If I am sending in several estimated tax payments for my client to get into compliance, must I make separate payments or can I lump them together and send one payment to cover 3 quarters?
- The IRS says my client must be in tax compliance, but what does that mean?
- How long does the IRS have to collect a tax?
- When does the Collection Statute begin to run?
- What is the difference between a "lump-sum" offer and a "short-term deferred" offer?
- What is an "Effective Tax Administration," or ETA Offer?
- How do you complete Form 2848 when you are not sure what years are filed or not filed?
- What is a Doubt as to Liability offer?
- What is the "low-income certification" for purposes of filing an Offer?
- Can you ever get more than 24 months for a deferred Offer?
- What if only one spouse owes the tax?
- Can one spouse file an Offer on a joint tax liability if the other does not want to participate?
- How do you determine if the taxpayer can full-pay if they have multiple Collection Statute Expiration Dates ("CSED's")?
- How hard is it to get an offer with the IRS?
- What forms must be filled out to file an Offer-in-Compromise?
- How much does it cost to apply?
- Can you default and void an Offer-in-Compromise?
- What is the minimum you can offer?
- How much does it cost to submit an Offer-In-Compromise?
- The IRS does not compromise on payroll taxes, correct?
- Does the IRS consider a potential bankruptcy filing by the taxpayer in determining whether to accept the taxpayer's Offer-in-Compromise?
- If my client's income is currently down, is now the best time to file an Offer?
- How does the IRS treat the business assets for purposes of the Offer?
- If a taxpayer has died can they still file an Offer-in-Compromise?
- Does making installment agreement payments keep the collection statute open?
- I have a client on an installment agreement. Can they file an Offer?
- What is the impact of the Community Property Laws on a taxpayer's Offer?
- I have a married couple that owe taxes independently from before marriage and now owe for the last several years together. Can we do this as one Offer?
- My client owes for 9 years of taxes. Can he compromise on the earliest five and then do a payment plan on the most recent four years?
- Would you ever consider bankruptcy as a better option to solve a tax issue?
- Can an offer be filed if the client is in bankruptcy?
- The IRS says my client, who has lived in Italy for the last 15 years, still owes the taxes they owed when they moved to Italy. We have been fighting with them because the ten-year Collection Statute has expired. Do you have any advice?
- What if we file an Offer and the IRS calculates a higher RCP amount?
- Is RCP calculated on a monthly or annual basis?
- Does my client have to include their retirement accounts in their RCP analysis?
- On your podcast you mention strategies to adjust an RCP calculation. Can you elaborate?
- Are credit card payments an allowable expense for the Offer RCP calculation?
- Are 401K contributions allowed as a future expense for the RCP calculation?
- What is the RCP calculation?
- What about someone who is older and will be retiring in two years. Will the IRS factor that in when figuring RCP?
- What if the Taxpayer cannot access the equity in their assets? Can it be excluded from the Offer calculation?
- I have an elderly client with no future income. They owe $86,000 but have $900,000 of equity in their home. Can I explain to the IRS that they cannot get a mortgage, so the IRS should ignore the equity in the home and accept an Offer?
- What if only one spouse owes the back tax debt, the spouses live in a community property state but have real estate in a separate property state?
- If a client pulls equity out of their house before the tax returns are assessed and pays off their credit cards, will the IRS look at that as fraud?
- If a taxpayer takes a loan against their assets for the Offer, like a home equity line or a 401(k) loan, can they deduct the loan repayment against their future income?
- Is money in a 529 account includible as an asset for an Offer?
- I have a client that suggested he could make his cash in the bank disappear. Is it okay or would the IRS suspect something?
- The Offer Specialist we are dealing with is adding in the PPP Loan Forgiveness as an asset for purposes of their Offer. Is this correct?
- My client has an EIDL loan from the federal government and the IRS claims they can take the amount available and use it to pay their debt, and so are including it in their Offer calculation. My understanding is that the IRS does not require you to take loans to pay them. Can you confirm this, and what should I respond with?
- Can you adjust a taxpayer's withholding to reduce their income and help them get their Offer accepted?
- The IRS is forcing my client to include the child support payments as income, why?
- What if the client's income swings up and down so there is no clear picture of their normal level of income?
- If the IRS averages the taxpayer's income over the last 3 years, do they use that for the RCP calculation instead of their current income?
- I have a taxpayer that received phantom income from a pass through but no cash. Does this income have to be included?
- What if the client has a W-2 but not enough withholding?
- Do I use 12 months of future income for a lump sum offer or the 80 months remaining on the CSED?
- The IRS is adding my client's EIDL loan in as future income from his business. Wont the IRS have to allow an offsetting expense for the repayment of the loan back to the federal government?
- The taxpayer has two vehicles in their name: their own, which is leased, and their college age child's, which has no payment. IRS will not allow the taxpayer's car payment. Why?
- My client pays for after-school care for their two children. Is this allowed?
- If an expense is not allowed for the Offer does that mean the taxpayer cannot pay the expense?
- Are college tuition payments for the taxpayer's children allowed as an expense for an Offer-in-Compromise if they are REQUIRED under the divorce decree?
- My client donates to charity every year. Is this an allowable expense?
- If spouses are separated and both have housing expenses can they claim both of their housing expenses for calculating their Offer?
- Can the taxpayer get both auto expense and public transportation as deductions when calculating future income for their Offer?
- How often does the IRS update its expense standards for Offers?
- Can the taxpayer challenge the IRS expense standards as being abusive because they are so limiting?
- How do you know what the standards for expenses are if the taxpayer lives in a foreign country?
- Can I claim childcare expenses if the stay-at-home spouse is disabled?
- For the car payment limits, what if one spouse's car payment is higher than the allowable standard and the other spouse's car payment is lower than the standard? Can you average them or add them together?
- Can you claim medical deductions for a taxpayer's mother?
- How can the professional representative become a "future expense" and have our fees factored into the Offer?
- What do you do with clients that pay for everything in cash and cannot prove their expenses?
- What is included in the housing expense?
- My client has multiple Schedule C businesses, some of which lose money. The IRS is only using the positive income businesses and ignoring the losses from the others. Is this accurate?
- How many months of bank account statements should we include with the Offer package?
- Who should the checks be made out to and what should be written on the memo line?
- Should I include a cover letter with my Offer package?
- Do I file the Offer with the Revenue Officer, or should I mail it into the Centralized Offer Unit listed in the instructions?
- What are the differences between the types of Offers-in-Compromise?
- How do you know if you should file a Lump-Sum Offer or a Periodic Deferred Offer?
- If we submit a Periodic Offer, do we have to pay it evenly over the twenty-four months?
- If your client qualifies for an ETA Offer, how do you determine how much to Offer?
- For a Doubt-as-to-Collectibility Offer with Special Circumstances, how do you decide which expenses to argue for a departure from the standards?
- I have a client that filed an Offer, and the Offer unit closed their file and returned it because they had an audit adjustment on a tax year come out. Can they do that?
- What are your options if there was an offer in compromise that was returned due to noncompliance?
- My client has a schedule C business, and the Offer Specialist at the IRS won't allow the car payment for their Offer because they are using it in the business. Do you agree?
- When you appeal the denied offer do you go to Tax Court? Can an accountant still represent the taxpayer at Appeals?
- If you file a deferred Offer, and the offer is rejected, do you still need to make periodic payments while you wait for your Appeals hearing?
- If the client's financial situation changes after the Offer is accepted, can it be renegotiated?
- If Appeals only looks at the OIC as filed, what happens if circumstances have changed for the worse since the OIC was filed? Can the Offer be reduced?
- How is an Offer computation and future payments effected by divorce?
- How long does the IRS have to respond to an offer in compromise?
- Can the IRS file a lien after an offer is submitted?
- Where will the payments be applied?
- Appeals accepted the Offer but wants my client to waive their tax court rights. Should we agree to sign it?
- What if the IRS calculates a higher amount than the amount my client offered? Is the Offer dead?
- Does the IRS have a set time limit for reviewing an offer in compromise?
- If my client's Offer was accepted but now they can no longer afford to pay the Offered amount, can they renegotiate or do they have to start over again?
- Are offers-in-compromise considered cancellation of debt income after acceptance by the IRS?
- The IRS Offer Specialist told us they will not allow my client's current tax payments because they do not have a history of paying their taxes. This seems wrong - how can a taxpayer maintain their tax payments if the IRS will not allow them?
- Show all articles ( 105 ) Collapse Articles
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Protective Refund Claims
- What is a Protective Refund Claim?
- What is the legal basis for a Protective Refund Claim? Where is this authorized?
- What is the purposes of a Protective Refund Claim?
- What are the requirements of a Protective Refund Claim?
- How do you File a Protective Refund Claim
- Does the IRS actually process these claims?
- Can you amend a Protective Claim after you have filed it?
- What are some examples of When Protective Claims are used?
-
Reasonable Compensation
- What is reasonable compensation according to the IRS?
- Why is reasonable compensation important for S Corporation shareholders?
- What happens if an S Corp owner takes distributions but no reasonable compensation?
- What is the main advantage of distributions over wages for S Corp owners?
- What are the major decisions in the Reasonable Compensation area and the lessons learned from them?
- What tool can be used to calculate reasonable compensation more easily today?
- What document did the IRS release to help examiners determine reasonable compensation?
- What are the three approaches outlined in the IRS Job Aid?
- What is the cost approach for determining reasonable compensation?
- What is the market approach for determining reasonable compensation?
- What is the income approach for determining reasonable compensation?
- What happens if an S Corp pays a shareholder via 1099 instead of W-2?
- What authority does the IRS rely on to reclassify payments as wages?
- Can distributions exceed reasonable compensation?
- Does the IRS penalize preparers for improper reasonable compensation reporting?
- What is the importance of Form 1125-E?
- Can wages be declared in Q4 if missed earlier in the year?
- What case emphasized the importance of documenting officer roles?
- What is one red flag for an IRS audit on S Corps?
- What was the outcome of the Glass Blocks case?
- What factor is not considered in reasonable compensation determinations?
- What should be considered in a compensation agreement?
- Can an S Corp pay less than the fair value of services provided?
- What is the risk in issuing distributions before paying reasonable compensation?
- Who bears the burden of proving reasonable compensation is appropriate?
- What is one common mistake S Corp owners make?
- Watson, David E., PC v. United States, 668 F.3d 1008 (2012)
- Sean McAlary Ltd. Inc. v. Commissioner, T.C. Summary Opinion 2013-62 (2013)
- Glass Blocks Unlimited v. Comm., T.C. Memo. 2013-180 (2013)
- Davis v. United States, 1994 U.S. Dist. LEXIS 10725 (D. Colo. 1994)
- Show all articles ( 15 ) Collapse Articles
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The IRS Collection Client
- Why are IRS collection clients different from traditional tax clients?
- Should practitioners offer free consultations to IRS collection clients?
- What should a practitioner include in a retainer agreement for a collection client?
- Why is obtaining a Power of Attorney (POA) important once a practitioner is retained?
- What is required for a taxpayer to be in 'tax compliance'?
- Why is it critical for self-employed clients to make estimated tax payments?
- How often must estimated tax payments be made by self-employed individuals?
- Why is proper withholding important for wage earners dealing with IRS collections?
- What is the impact of not opening IRS mail?
- What steps should a practitioner take when onboarding a new IRS collection client?
-
One Big Beautiful Bill (OBBB)
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IRS Whistleblower Program
- What statute governs IRS whistleblower awards?
- How are awards determined for whistleblowers?
- What are the eligibility thresholds for 7623(b) "Large Dollar cases"?
- What is the mandatory award percentage range under 7623(b)?
- Who determines award amounts?
- What are collected proceeds?
- When were criminal fines added to collected proceeds?
- How does someone file a whistleblower claim?
- Can a person file the 211 anonymously?
- What steps occur after Form 211 filing?
- What happens if evidence is incomplete?
- Is there a way to help ensure the IRS takes a whistleblowing claim seriously and acts on it?
- Does filing a whistleblower claim trigger an audit?
- Does the IRS give status updates?
- Can IRS contact the whistleblower?
- Does the whistleblower participate in the audit?
- Can the whistleblower remain anonymous?
- How long do claims take?
- When is an award paid?
- Can multiple actions arise from one claim?
- How does the IRS determine award percentages?
- What reduces an award?
- Can awards be denied?
- What increases an award?
- Can a whistleblower appeal the percentage?
- Can a whistleblower appeal IRS refusal to pursue a case?
- Are sequestration cuts applicable?
- Are attorney fees deductible?
- Are awards taxable?
- Can the IRS apportion settlements across issues?
- What can the Tax Court review?
- What standard of review applies?
- What is the administrative record?
- Can the record be supplemented?
- Can the IRS withhold privileged documents?
- What happens if the United States Tax Court determines the IRS used wrong legal standards?
- Does but-for causation guarantee an award?
- Can whistleblowers challenge sequestration?
- What if information is obtained illegally?
- Can federal employees be whistleblowers?
- Can whistleblowers simultaneously pursue FCA or SEC claims?
- Do whistleblower claims affect statutes of limitation?
- How does BBA partnership audit reform affect claims?
- Can whistleblowers submit through counsel anonymously?
- Can the IRS handle whistleblower cases that entail an international individual?
- Can retaliation protections apply to contractors?
- Does the IRS verify motive?
- What is the biggest mistake practitioners and clients make when filing a whistleblower claim?
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Need to Know IRC Sections
- IRC 3505 - Trust Fund Liability for Creditors
- IRC 6015 - Innocent Spouse Relief
- IRC 6020 - Substitute-For-Returns
- IRC 6159 - Installment Agreements
- IRC 6213 - Restrictions Applicable to Deficiencies (90 day NOD)
- IRC 6320 - Collection Due Process Rights on a Lien, Must Challenge the Liability at First Opportunity
- IRC 6321 - Federal Tax Lien
- IRC 6323 - Notice of Federal Tax Lien, and Super-Priority Liens
- IRC 6330 - Notice and Opportunity for a Hearing
- IRC 6331 - Tax Levy and Collection-Due-Process Rights
- IRC 6343 - Levies Must be Released if Causing Hardship
- IRC 6501 - The Three-Year Rule for the IRS to Assess a Tax
- IRC 6502 - Collection Statute Expiration Date
- IRC 6503 - Actions that Toll, or Extend, the Collection Statute
- IRC 6511 - Refunds, Three-Year Statute, and Exception for Financial Disability
- IRC 6671 - Rules for Application of Assessable Penalties - Should Be Collected Just Like Any Other Tax
- IRC 6672 - Trust Fund Recovery Penalty
- IRC 7122 - Offer-in-Compromise
- IRC 7201 - Attempt to Evade or Defeat Tax
- IRC 7202 - Willful Failure to Collect or Pay Over Tax
- IRC 7203 - Willful Failure to File Return, Supply Information, or Pay Tax
- IRC 7204 - Fraudulent Statement or Failure to Make Statement to Employees
- IRC 7205 - Fraudulent Withholding Exemption Certificate or Failure to Supply Information
- IRC 7206 - Fraud and False Statements
- IRC 7207 - Fraudulent Returns, Statements, or Other Documents
- IRC 7210 - Failure to Obey Summons
- IRC 7212 - Attempts to Interfere with Administration of Internal Revenue Laws
- IRC 7213 - Unauthorized Disclosure of Information
- IRC 7214 - Offenses by Officers and Employees of the United States
- IRC 7215 - Offenses with Respect to Collected Taxes
- IRC 7345 - Revocation of Passports
- IRC 7402 - The Writ Ne Exeat Republica is an Action Against a Person, Not Property.
- IRC 7501 - Liability for Taxes Withheld or Collected
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Critical Cases
- Drye, Rohn F., Jr., et al. v. United States, 528 U.S. 49 (1999)
- United States v. Craft, 535 U.S. 274 (2002)
- United States v. Lucille Mitzi Bosco Rodgers, Supreme Court of the United States, No. 81-1476, 103 SCt 2132, 461 US 677, 5/31/83
- Honey, Charles L. v. United States, 92-1 U.S. Tax Cas. (CCH) P50,253 (1992)
- Hochstein, Arnold v. United States, 900 F.2d 543 (1990)
- United States of America, Plaintiff-Appellee v. Huckabee Auto Co., et al., 783 F2d 1546 (1986)
- Custom Stairs & Trim Ltd. v. Commissioner, T.C. Memo. 2011-155 (2011)
- Porter, Suzanne L. v. Commissioner, 130 T.C. No. 10 (2008)
- Porter, Suzanne L. v. Commissioner, 132 T.C. 203 (2009)
- Vinatieri, Kathleen A. v. Commissioner, 133 T.C. 392 (2009)
- United States v. Bell Credit Union, 860 F.2d 365, 369 (10th Cir. 1988)
- United States v. National Bank of Commerce, 472 U.S. 713 (1985)
- Ward Franklin Dean v. United States (2021, 11th Circuit)
- Gullion, Thomas Allen v. Commissioner, T.C. Summary Opinion 2013-65 (2013)
- Dennis v. Commissioner, T.C. Memo. 2010-216, (2010)
- Montgomery, Nield, et ux. v. Commissioner, 122 T.C. 1 (2004)
- Westcott, Perry B., et ux. v. Commissioner, T.C. Memo. 2010-36 (2010)
- Seaview Trading LLC et al. v. Commissioner, No. 20-72416 (2023)
- Watson, David E., PC v. United States, 668 F.3d 1008 (2012)
- Sean McAlary Ltd. Inc. v. Commissioner, T.C. Summary Opinion 2013-62 (2013)
- Glass Blocks Unlimited v. Comm., T.C. Memo. 2013-180 (2013)
- Davis v. United States, 1994 U.S. Dist. LEXIS 10725 (D. Colo. 1994)
- Waltner, Steven T. v. Comm., T.C. Memo. 2014-35 (2014)
- United States v. Klein, 247 F.2d 908 (1957)
- United States v. Kovel, 296 F.2d 918 (2d Cir. 1961)
- Tweel, Nicholas J. v. United States, 77-1 U.S. Tax Cas. (CCH) P9330 (1977)
- Chai vs Commissioner, TC Memo 2015-42 (2015)
- Slodov, Ike v. United States, 436 U.S. 238 (1978)
- Joseph F. Purcell, v. United States of America, U.S. Court of Appeals, 9th Circuit, 1 F3d 932 (1993)
- United States vs Brimberry, Janice A, 961 F.2d 1286 (1992)
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433
- What is the primary purpose of IRS Form 433?
- What financial concept drives IRS collection decisions by the IRS?
- Why do many Offers in Compromise get denied?
- Which version of Form 433 is generally used by IRS Revenue Officers?
- When dealing with IRS campus collections, which form aligns best with IRS input screens?
- What is the key difference between Form 433-F and Form 433-H?
- Why is it recommended to use Form 433-A instead of a 433-F when analyzing a case?
- What is the risk of submitting a Form 433 with aggressive or inaccurate information?
- Do I need to support all the numbers on the 433?
- Why might a practitioner submit more than three months of bank statements?
- What does the IRS do with bank deposit information?
- How should non-income deposits be handled?
- Should I include a copy of the Power-of-Attorney Form 2848, even if it is already on file with the CAF Unit?
- Why might empty/inactive LLCs create collection problems?
- What pre-submission strategy is recommended regarding unnecessary assets?
- What is the individual cash exemption on Form 433?
- Is there a cash exemption for businesses?
- Why might practitioners recommend spending down business cash before submission?
- How are investments valued for collection purposes?
- Why are most consulting or service LLCs valued minimally?
- What happens if a business has formal annual valuations?
- Why are retirement contributions not allowable expenses?
- Do you think it is fair for the IRS to require a taxpayer to liquidate assets?
- How does the IRS treat retirement accounts the taxpayer can access?
- When can the IRS include a 401(k) loan as an asset?
- What is the strategy to avoid forced retirement loans?
- Why might the IRS reject an Offer-In-Compromise when retirement funds become accessible soon?
- Why must virtual currency ownership be explicitly documented?
- Does the IRS charge taxpayers criminally for filing a false Form 433?
- Why is it recommended that tax professionals make sure the client affirmatively admits or denies if they have virtual currency and/or foreign assets?
- Does the IRS require taxpayers to borrow on credit cards?
- What must be done before the IRS disregards home equity?
- Why does the IRS not ignore equity in real estate when evaluating an Offers in Compromise?
- What valuation method does the IRS use for real estate?
- How does the IRS arrive at a value for real estate when determining a taxpayer's ability to pay?
- If Zillow is overstating the value of the taxpayer's property, how can it be challenged?
- Why is home equity treated differently for CNC versus OIC?
- What qualifies as a "special circumstance" for an Offer-in-Compromise?
- What overarching principle governs successful Form 433 submissions?
- United States vs Brimberry, Janice A, 961 F.2d 1286 (1992)
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International Forms and Penalties
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IRS Enforcement
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Penalty Abatement
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Checklists
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Practice Management
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Taxpayer Assistance and Service Act
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Estate and Decedent Tax Issues
