Tax Relief Blog

National Taxpayer Advocate Annual Report

January 6, 2010 | Mike Habib, EA

National Taxpayer Advocate Annual Report

National Taxpayer Advocate Nina E. Olson today released her annual report to Congress, warning that increased demands on the IRS have eroded the agency’s ability to meet taxpayer service needs and expressing concern that IRS collection practices are harming financially struggling taxpayers without producing significant revenue gains.

In the preface to the report, Olson noted that she is required by statute to identify taxpayer problems, but she wrote that “the IRS in many respects has had an extremely successful year.” She cited, in particular, the IRS’s success in implementing significant legislative changes designed to stimulate the economy in the midst of the filing season.

Tax Relief Short List

January 4, 2010 | Mike Habib, EA

Tax Relief – Short List

Tax relief is a term that refers to providing tax problem resolution and relief from the fear and burden of the mounting tax liability. Tax relief is provided on a federal and state level.

Want tax relief?

Tax Problems

December 24, 2009 | Mike Habib, EA

Tax Problems – Tax Problem Resolution

When tax problems occur, it can be difficult to hide from the IRS. Being familiar with these tax problems allow you to recognize them as soon as they occur. Whether you are an individual or a business entity, make sure that you are aware of these common problems regarding taxes.

Payroll taxes – 941 tax

IRS Tax Lien, How to release federal tax liens and levies

December 21, 2009 | Mike Habib, EA

IRS Tax Lien – How to release federal tax liens and levies

Taxpayers have the right to appeal the IRS’ filing of a notice of a tax lien in the public record and petition for release. If filed in error, the IRS must release the lien and state that the lien was erroneous. The request for tax relief must be based on one of the following grounds: (1) the tax liability had been satisfied before the lien was filed; (2) the assessing of the tax liability violated either the notice of deficiency procedures or the Bankruptcy Code; or (3) the limitations period for collecting the liability had expired prior to the filing of the lien.

The IRS may withdraw a tax lien before payment in full if:

IRS enforcement figures

December 17, 2009 | Mike Habib, EA

Table 16. Delinquent Collection Activities, Fiscal Years 2005-2008

[Money amounts are in thousands of dollars.]

Activity

2005

2006

2007

2008

(1)

(2)

(3)

(4)

Returns filed with additional tax due:

Total amount collected [1]

[r] 27,615,348

[r] 29,172,915

[r] 31,952,399

28,465,648

Taxpayer delinquent accounts (thousands):

Number in beginning inventory

5,981

6,478

7,074

8,240

Number of new accounts

5,870

6,100

7,146

7,099

Number of accounts closed

5,373

5,504

5,980

6,107

Ending inventory:

Number

6,478

7,074

8,240

9,232

Balance of assessed tax, penalties, and interest [2]

57,594,901

69,555,590

83,488,988

94,357,717

Returns not filed timely:

Delinquent return activity:

Net amount assessed [3]

22,765,462

23,305,535

30,287,802

24,888,918

Amount collected with delinquent returns

3,584,255

3,905,764

3,968,163

3,773,528

Taxpayer delinquency investigations (thousands) [4]:

Number in beginning inventory

3,022

3,658

3,874

3,732

Number of new investigations

2,558

2,373

2,587

1,972

Number of investigations closed

1,922

2,157

2,729

2,271

Number in ending inventory

3,658

3,874

3,732

3,433

Offers in compromise (thousands) [5]:

Number of offers received

74

59

46

44

Number of offers accepted

19

15

12

11

Amount of offers accepted

325,640

283,746

228,975

200,103

Enforcement activity:

Number of notices of Federal tax liens filed

522,887

629,813

683,659

768,168

Number of notices of levy served on third parties

2,743,577

3,742,276

3,757,190

2,631,038

Number of seizures

512

590

676

610

[r]–Revised.

[1] Includes previously unpaid taxes on returns filed plus assessed and accrued penalties and interest. For Fiscal Year 2008, includes a total of $37,254,116 (dollars) collected by private debt collection agencies.

[2] Includes assessed penalties and interest but excludes any accrued penalties and interest. Assessed penalties and interest—usually determined simultaneously with the unpaid balance of tax—are computed on the unpaid balance of tax from the due date of the return to the date of assessment. Penalties and interest continue to accrue (accrued penalties and interest) after the date of assessment until the taxpayer’s balance is paid in full.

[3] Net assessment of tax, penalty, and interest amounts (less prepaid credits, withholding, and estimated tax payments) on delinquent tax returns secured by Collection activity.

[4] A delinquency investigation is opened when a taxpayer does not respond to an IRS notice of a delinquent return.

[5] An offer in compromise (OIC) is a binding agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. An OIC will not be accepted if the IRS believes the liability can be paid in full as a lump sum or through a payment agreement.

NOTES: Detail may not add to totals because of rounding. All amounts are in current dollars.

SOURCE: Small Business/Self-Employed, Collection Planning and Analysis, Collection National Reports SE:S:C:PA:CNR

IRS Tax Lien against Gov. Schwarzenegger

November 28, 2009 | Mike Habib, EA

IRS has filed $79,000 lien against Gov. Schwarzenegger, records show

SOURCE: Los Angeles Times

A spokesman for the governor says the matter is related to a paperwork discrepancy and has nothing to do with the payment of taxes.

Final Regulations Governing Installment Agreements

November 25, 2009 | Mike Habib, EA

IRS Issues Final Regulations Governing Installment Agreements

The IRS has issued final regulations relating to the payment of tax liabilities through installment agreements. The regulations reflect changes to the law made by the Taxpayer Bill of Rights II (P.L. 104-168), the Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105-206) and the American Jobs Creation Act of 2004 (P.L. 108-357). The final regulations generally adopt proposed regulations issued in March 2007 (NPRM REG-100841-97), with revisions to two provisions made in response to comments received by the IRS. The regulations are effective November 25, 2009.

The final regulations adopt without change procedures set forth in the proposed regulations regarding submission and consideration by the IRS of proposed installment agreements, and acceptance, form and terms of installment agreements. The regulations provide that a proposed installment agreement must be submitted according to the procedures prescribed by the IRS, and becomes pending when it is accepted for processing. An installment agreement request is not accepted until the IRS notifies the taxpayer or the taxpayer’s representative of the acceptance.

SBA Tax Relief

November 20, 2009 | Mike Habib, EA

Treasury / SBA Highlight Role of Tax Cuts During Small Business Financing Forum

US Treasury Secretary Timothy F. Geithner presided over the Small Business Financing Forum presented by the Treasury Department and the Small Business Administration (SBA) on November 18 in Washington, D.C. While the program was aimed at exploring financing issues, recent tax cuts were highlighted as a potential method by which the government could help small businesses increase their cash flow during the current tough economic environment.

Economic Stimulus Effort

Military Spouses Relief

November 16, 2009 | Mike Habib, EA

President Signs Military Spouses Residency Relief Act

Source: Journal of Accountancy

President Barack Obama signed into law the Military Spouses Residency Relief Act (PL 111-97), which will ensure that the spouses of military personnel who move because their spouse is posted for military duty will be treated as not having changed residency for tax purposes.

Relief for sponsors of statutory hybrid plans

November 12, 2009 | Mike Habib, EA

Effective Date of Regulations Under § 411(b)(5)(B)(i); Relief Under § 411(d)(6); and Notice to Pension Plan Participants

Announcement 2009-82

The Treasury Department and the Internal Revenue Service are announcing relief for sponsors of statutory hybrid plans that must amend the interest crediting rate in those plans. Plan sponsors may rely on this announcement pending publication of the anticipated additional guidance described below. Treasury and the Service expect to issue in the near future final regulations and proposed regulations relating to statutory hybrid plans. The regulations will include rules interpreting the requirement in § 411(b)(5)(B)(i) of the Internal Revenue Code that such plans not have an interest crediting rate in excess of a market rate of return. The rules in the regulations specifying permissible market rates of return are not expected to go into effect before the first plan year that begins on or after January 1, 2011.