A monthly payment plan allows the payment of a tax debt in smaller, more manageable amounts. Payment plans generally require equal monthly payments that will result in full payment of the tax owed by the time the statute of limitations expires for the Internal Revenue Service to collect the tax. If a taxpayer cannot pay their tax debt in full by the end of the collection period, but can pay some of the tax they owe, they may qualify for what’s called a partial payment installment agreement. Ho...
Audit Reconsideration is the process the Internal Revenue Service uses to reevaluate the results of a prior audit where additional tax was assessed and remains unpaid, or a tax credit was reversed. If a taxpayer disagrees with the original determination he or she must provide information that was not previously considered during the original examination. Audit Reconsideration is also the process the Internal Revenue Service uses when the taxpayer contests a Substitute for Return (SFR) determin...
The government, like other creditors, encounters situations where an account receivable (in their case a tax debt) cannot be collected in full or there is a legitimate dispute as to what is owed. In the business world it is an accepted practice to resolve similar issues through negotiation and compromise, and the same is the case with the IRS. An Offer in Compromise is an agreement between a taxpayer and the government that settles a tax liability for payment of less than the full amount owed.
Because people sometimes disagree on tax matters, the Internal Revenue Service has an appeals system. Most differences can be settled within this system without expensive and time-consuming court trials. However, your reasons for disagreeing with the IRS must come within the scope of the tax laws. For example, you cannot appeal your case based only on moral, religious, political, constitutional, conscientious, or similar grounds.
In 1955, there were approximately 14 penalty provisions in the Internal Revenue Code, today there are more than ten times that number. According to the IRS, penalties exist to encourage voluntary compliance by supporting the standards of behavior expected by the Internal Revenue Code. For most taxpayers, voluntary compliance consists of preparing an accurate return, filing it timely, and paying any tax due. Efforts made to fulfill these obligations constitute compliant behavior. Most penalties...
In a bankruptcy proceeding debts are divided into two categories: dischargeable and non-dischargeable. Dischargeable debts are those that the debtor is no longer personally liable to pay after the bankruptcy proceedings are concluded. Non-dischargeable debts are those that are not cancelled because of the bankruptcy proceedings. The debtor remains personally liable for their payment.