If you owe a third party for several different items and you voluntarily pay a debt, you should get to designate which item the payment is to be applied to. This is the general rule for voluntary payments made to the IRS. But according to IRS Action on Decision 2014-01, the IRS will not follow… Continue reading Designating Voluntary Tax Payments for Business Owners
Category: IRS Debts
About IRS Debts & Unpaid Taxes
The IRS is authorized to collect unpaid tax debts. It has tools at its disposal to do so.
If you need to know more about the IRS’s collection function, you can read about the IRS collection function here. If you want to know more about how the IRS goes about collecting unpaid taxes, you can read about the tax collection options here.
This page covers recent cases, rulings, and guidance for IRS debts and collections. Scroll down to read the articles.
If you need help dealing with a tax debt or IRS collection matter, please schedule an appointment with our tax attorneys online. You can also call us at (713) 909-4906.
Informal Offer in Compromise? Is There Such a Thing?
What if you reach an oral agreement with the IRS to settle the tax debt, but then the IRS back tracks on the agreement? If you didn’t submit the offer on a Form 656, do you have any rights? The court addresses this in Bergdale v. Commissioner, T.C. Memo. 2014-152. Facts & Procedural History Mr.… Continue reading Informal Offer in Compromise? Is There Such a Thing?
IRS Notice of Intent to Levy Sustained Despite IRS Not Following Its Procedures
In Eichler v. Commissioner, 143 T.C. 2, the U.S. Tax Court said that the IRS Notice of Intent to Levy was proper even though the IRS failed to follow its policy to check an installment request into its system which would have stopped IRS collection actions. Facts & Procedural History The IRS assessed Section 6672… Continue reading IRS Notice of Intent to Levy Sustained Despite IRS Not Following Its Procedures
Example of How the IRS Evaluates Offer in Compromise for Doubt as to Collectibility
In Zumo v. Commissioner, T.C. Summary Opinion 2013-66, the U.S. Tax Court concluded that the IRS was correct in rejecting an offer in compromise based on doubt as to collectibility. The case provides a good overview of the IRS collection process and how the IRS evaluates offers in compromise. Facts & Procedural History Dr. Zumo… Continue reading Example of How the IRS Evaluates Offer in Compromise for Doubt as to Collectibility
IRS Liable for Stock Loss After Levy
When the IRS levies or takes property from the taxpayer, the taxpayer has the right to request that the property be sold within 60 days. This rule applies to more than just stocks. It also applies to cryptocurrency, for example. In Zapara v. Commissioner, 126 T.C. 215 (2005), aff’d, 652 F.3d 1042 (9th Cir. 2011),… Continue reading IRS Liable for Stock Loss After Levy
Offer in Compromise Rejected Where Records of Household Member Not Provided
In Winters v. Commissioner, T.C. Memo. 2012-183, the U.S. Tax Court concluded that the IRS correctly rejected an offer in compromise submitted based on doubt as to collectibility based in part on the taxpayer not providing records to establish the income of a person who resided in his home. Facts & Procedural History Mr. Winters… Continue reading Offer in Compromise Rejected Where Records of Household Member Not Provided
IRS Does Not Have to Hold Open CDP Hearing to Include All Tax Years
In Williams v. Commissioner, T.C. Memo. 2009-159, the U.S. Tax Court concluded that the IRS did not abuse its discretion by failing to hold open a collection due process or CDP hearing request pending the assessment of tax in and consolidation of other tax years with the current CDP hearing request. Facts & Procedural History … Continue reading IRS Does Not Have to Hold Open CDP Hearing to Include All Tax Years
Offer in Compromise: Documenting the Value of Assets
The IRS carefully examines the value of the taxpayer’s assets when it considers whether to accept an offer in compromise based on doubt as to collectiblity. Even a few dollars can result in a rejected offer. Substantiation is key. The Wright v. Commissioner, T.C. Memo. 2008-259, case is an example. It involves a $2,000 offer… Continue reading Offer in Compromise: Documenting the Value of Assets
Discharging Tax Debts in Bankruptcy: The Three Year Look-Back Period
Bankruptcy is often the best method of resolving unpaid tax debts. The U.S. Tax Court recently addressed one of the rules for discharging unpaid tax debts in bankruptcy in Lehman v. Commissioner, T.C. Summary Opinion 2008-83. Facts & Procedural History On Lehman’s Case In Lehman, the taxpayers initially sought Chapter 13 bankruptcy relief. The taxpayers filed… Continue reading Discharging Tax Debts in Bankruptcy: The Three Year Look-Back Period
The Disqualified Employment Tax Levy
The IRS is generally required to give taxpayers notice of its intent to levy (or take) their property prior to it actually levying on the property. Congress recently amended the Code to provide the IRS with a new type of tax levy. This new levy is referred to as a “disqualified employment tax levy” and… Continue reading The Disqualified Employment Tax Levy