The IRS has broad powers to collect unpaid tax debts. This power is not unlimited. In Dalton v. Commissioner, T.C. Memo. 2008-165, the U.S. Tax Court looks at one limitation on the IRS’s collection powers, namely, the IRS’s ability to take property that is held by a third party to satisfy the taxpayer’s tax debt.… Continue reading Unpaid Taxes & Assets Held by Third Parties
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.
Sluggish Economy May Help Taxpayers With Unpaid Tax Debts
The sluggish economy is impacting all of us in one way or another. This is a scary time. Taxpayers who owe unpaid tax debts may feel even more helpless. This is especially true given the IRS’s focus on tax assessment and collection efforts. Coincidentally, taxpayers who find themselves subject to IRS collection action may also… Continue reading Sluggish Economy May Help Taxpayers With Unpaid Tax Debts
Payroll Taxes: The Single Member LLC Owner (Again)
Many taxpayers do not understand the implications of operating a business as a LLC when it comes to payroll tax liabilities. Apparently even some accounting firms do not fully understand this concept. The recent McNamee v. Dept. of Treasury case involves a six-person accounting firm that was operated as a single member LLC. The accounting… Continue reading Payroll Taxes: The Single Member LLC Owner (Again)
City of Chicago Takes Church Property For Un-Owed Taxes
The recent Beth-El All Nations Church case shows just how far state and local tax collectors will go to collect taxes – even when the taxes are not owed. Facts set out by the court: An employee of the City of Chicago mistakenly addressed a notice to Beth-El All Nations Church at 1534 East 63rd… Continue reading City of Chicago Takes Church Property For Un-Owed Taxes
Florida Department of Revenue Harasses Taxpayer
Some states have a very poor record with regard to collecting taxes via legal means. The State of Florida is one of those states. In the recent In re: Omine case the Eleventh Circuit Court of Appeals details the Florida Department of Revenue’s illegal collection activities. Facts & Procedural History On Omine Case Gregg and… Continue reading Florida Department of Revenue Harasses Taxpayer
Offer in Compromise Deemed Accepted by the IRS
The IRS consumes volumes of information. It processes this information largely by processing paper forms. This includes paper forms submitted by you, the taxpayer and your tax attorneys, and by internal forms created by IRS employees. This inefficient paper form submission and processing is complemented by an insistence on sending taxpayer notices by mail. The… Continue reading Offer in Compromise Deemed Accepted by the IRS
Prepaying Taxes Before Bankruptcy Filing
Can you overpay your taxes and then file bankruptcy, with the aim of having the overpayment applied to other tax liabilities post bankruptcy? The court addressed this in Nichols v. United States, No.?05-15554 (9th Cir. 2007). Facts & Procedural History The taxpayers in the Nichols case overpaid their 2001 state and federal tax liability. The court opinion… Continue reading Prepaying Taxes Before Bankruptcy Filing
Bankruptcy Filing Does Not Prevent Innocent Spouse Relief
Can one spouse prevent the other spouse from obtaining innocent spouse relief by filing bankruptcy? The court addressed this question in Kovitch v. Commissioner, 128 T.C. 9 (2007). The Facts & Procedural History The Kovitch’s were divorced. The IRS then issued a notice of deficiency to both spouses for their joint tax liability. Only the wife… Continue reading Bankruptcy Filing Does Not Prevent Innocent Spouse Relief
IRS Obtains Promissory Note: Can it Collect on the Note?
In United States v. Spangler, the Eleventh Circuit Court of Appeals upheld a lower court order requiring a taxpayer to transfer a promissory note to the government so that the note payments would be credited towards the amount of the taxpayer’s court ordered tax restitution. Given that the IRS has a poor track record in… Continue reading IRS Obtains Promissory Note: Can it Collect on the Note?
“Rule of Thumb:” IRS Employees Not Subject to Ethical or Moral Standards
Unlike tax attorneys, IRS employees are not subject to any ethical or moral standards. Take the case of Wormley v. Department of the Treasury. The Wormley case presents the unusual question as to whether an IRS employee should be fired if she is arrested and convicted of assault for “biting off a portion of her… Continue reading “Rule of Thumb:” IRS Employees Not Subject to Ethical or Moral Standards