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.
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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.
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:
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Table 16. Delinquent Collection Activities, Fiscal Years 2005-2008 |
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[Money amounts are in thousands of dollars.] |
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Activity |
2005 |
2006 |
2007 |
2008 |
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(1) |
(2) |
(3) |
(4) |
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Returns filed with additional tax due: |
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Total amount collected [1] |
[r] 27,615,348 |
[r] 29,172,915 |
[r] 31,952,399 |
28,465,648 |
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Taxpayer delinquent accounts (thousands): |
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Number in beginning inventory |
5,981 |
6,478 |
7,074 |
8,240 |
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Number of new accounts |
5,870 |
6,100 |
7,146 |
7,099 |
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Number of accounts closed |
5,373 |
5,504 |
5,980 |
6,107 |
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Ending inventory: |
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Number |
6,478 |
7,074 |
8,240 |
9,232 |
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Balance of assessed tax, penalties, and interest [2] |
57,594,901 |
69,555,590 |
83,488,988 |
94,357,717 |
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Returns not filed timely: |
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Delinquent return activity: |
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22,765,462 |
23,305,535 |
30,287,802 |
24,888,918 |
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Amount collected with delinquent returns |
3,584,255 |
3,905,764 |
3,968,163 |
3,773,528 |
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Taxpayer delinquency investigations (thousands) [4]: |
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Number in beginning inventory |
3,022 |
3,658 |
3,874 |
3,732 |
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Number of new investigations |
2,558 |
2,373 |
2,587 |
1,972 |
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Number of investigations closed |
1,922 |
2,157 |
2,729 |
2,271 |
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Number in ending inventory |
3,658 |
3,874 |
3,732 |
3,433 |
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Offers in compromise (thousands) [5]: |
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Number of offers received |
74 |
59 |
46 |
44 |
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Number of offers accepted |
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15 |
12 |
11 |
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Amount of offers accepted |
325,640 |
283,746 |
228,975 |
200,103 |
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Enforcement activity: |
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Number of notices of Federal tax liens filed |
522,887 |
629,813 |
683,659 |
768,168 |
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Number of notices of levy served on third parties |
2,743,577 |
3,742,276 |
3,757,190 |
2,631,038 |
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Number of seizures |
512 |
590 |
676 |
610 |
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[r]–Revised. |
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[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. |
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[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. |
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[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. |
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[4] A delinquency investigation is opened when a taxpayer does not respond to an IRS notice of a delinquent return. |
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[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. |
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NOTES: Detail may not add to totals because of rounding. All amounts are in current dollars. |
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SOURCE: Small Business/Self-Employed, Collection Planning and Analysis, Collection National Reports SE:S:C:PA:CNR |
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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.
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.
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
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.
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.
Essential year end tax planning
Year-end tax planning could be especially productive this year because timely action can nail down a host of tax breaks that won’t be around next year unless Congress acts to extend them. These include, for individuals: the option to deduct state and local sales and use taxes instead of state income taxes; the standard or itemized deduction for state sales tax and excise tax on the purchase of motor vehicles; the above-the-line deduction for qualified higher education expenses; tax-free distributions by those age 70 1/2 or older from IRAs for charitable purposes; and the $8,000 first-time homebuyer credit (expires for purchases after Nov. 30, 2009). For businesses, tax breaks that are available through the end of this year but won’t be around next year unless Congress acts include: 50% bonus first year depreciation for most new machinery, equipment and software; an extraordinarily high $250,000 expensing limitation; the research tax credit; the five-year writeoff for most farm equipment; and the 15-year writeoff for qualified leasehold improvements, qualified restaurant buildings and improvements and qualified retail improvements. Finally, without Congressional “extender” legislation (which has come at the eleventh hour for several years), alternative minimum tax (AMT) exemption amounts for individuals are scheduled to drop drastically next year, and most nonrefundable personal credits won’t be available to offset the AMT.
High-income-earners have other factors to keep in mind when mapping out year-end plans. Many observers expect top tax rates on ordinary income to increase after 2010, making long-term deferral of income less appealing. Long-term capital gains rates could go up as well, so it may pay for some to take large profits this year instead of a few years down the road. On the other hand, the solid good news high-income-earners have to look forward to next year is that there no longer will be an income based reduction of most itemized deductions, nor will there be a phaseout of personal exemptions. Additionally, traditional IRA to Roth IRA conversions will be allowed regardless of a taxpayer’s income.
Tax Relief Blog