Continued from IRS Tax Lien Release – Part One – Avoiding a Lien
Brotman Law
IRS Tax Lien Release – Part One – Avoiding a Lien
Introduction to IRS Tax Lien Release
One of the biggest debates in the tax practitioner community is the efficacy of IRS tax liens. On one hand, IRS tax liens help the government protect its interest in a taxpayer’s property and secure the underlying tax obligation with real or tangible personal property. On the other hand, liens damage a taxpayer’s credit, place an obstacle in the way of the taxpayer selling that property or borrowing against it in order to pay off their liability, and generally do nothing to satisfy the immediate concern of the IRS. Furthermore, it is extremely difficult to get a lien release and liens are a noted hassle to dispose of once they have been filed against a taxpayer. However, there are a number of things that the taxpayer can do if they are affected by a federal tax lien in order to secure a lien release or achieve some other workable solution that allows them to make progress on the account. After all, the IRS is simply seeking a workable resolution to the problem.
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Tax Payment Plan Criteria: How to Get Approved
Introduction to Tax Payment Plans
When an individual cannot pay the full balance owed to the IRS, one of the most common solutions is to get that taxpayer set up on a tax payment plan. However, payment plans are not a matter of right, and taxpayers must meet several requirements in order to get their tax payment plan approved. It is important that to be aware of these criteria, as making sure you have met all of the requirements in advance will help expedite the approval of your IRS payment plan.
The BLT Mindset: Where’s the Bacon? (Or Why Lawyers Should Go to B-School)
Let me tell you a quick story. When I was a second year law student, I had an idea about how to provide the perfect tax return by combining the expertise of a CPA and a lawyer to tackle the preparation process. I had my million-dollar idea! So I sat on my couch with my laptop and said, “Ok, time to make this work.” And then I came to the realization that I did not know the first thing about what it took to run a business or where to start. And then I came to another realization that, if I did not know the first thing about running a business, what made me qualified to give people legal and tax advice about how to run their business. I could not answer that, so I went to business school.
Tax Levies and Property Exempt IRS Levy
Introduction to Tax Levies
The IRS can be fairly aggressive when it comes to adverse collection action. The IRS uses certain tactics to usher taxpayer compliance and to reduce the size of balances that are owed on taxpayer accounts. Tax levies are one of these collection tactics. The general rule with tax levies is that the IRS can levy all property that belongs to the taxpayer in order to satisfy the outstanding obligation. However, certain property is exempt from an IRS levy and cannot be seized by the IRS.[1]
Payment Plans: Partial Pay Installment Agreements
Introduction to Partial Payment Plans
The IRS expects that taxpayer will pay any back taxes that are owed in full at the time that they are due or will get on a payment plan for the amount in question. However, the IRS does not like to wait long for funds and payment plans are generally granted only in circumstances where the taxpayer can set up a payment plan to pay the balance owed, plus applicable penalties and interest within five years or prior to the expiration of the Collection Statute Expiration Date (CSED), whichever is first. However, there are some instances where this is not possible and the IRS is forced to consider the alternative. In these instances, the IRS will sometimes consider a partial payment plan for the taxpayer.
IRS Payment Plan Requests – Form 9465-FS
Introduction to IRS Payment Plans and Form 9465-FS
There are numerous options available to a taxpayer trying to resolve a balance due with the IRS.[1] One of the more prevalent options is to work out an IRS payment plan to pay down the liability in installment payments. When a taxpayer sets up a payment plan, they agree to make a specified monthly payment over a set period of time based on their ability to pay (as calculated by the IRS). In exchange for the taxpayer entering into their IRS payment plan, the IRS agrees to hold off on any adverse collection activity, including wage garnishments or bank levies, for the life of the installment agreement. Taxpayers can make a request for a IRS payment plan by filing IRS Form 9465-FS with the IRS.
IRS Interest Abatements
Introduction to IRS Interest Abatements
Any balance due that is owed to the IRS government will continue accrue interest on the amount of the outstanding tax obligation. The interest rate is generally pretty low in comparison with other types of debt,[1] but over time the amount of interest can add up and turn a small liability into a sizeable one. Unfortunately there is not too much to be done about your liability accruing interest and it is simply the cost of doing business with the IRS. However, there are certain mitigating circumstances where a taxpayer is able to do an IRS interest abatement in order to avoid the accrual of interest on some or all of the liability. When an IRS interest abatement occurs then the interest on a balance due can be abated altogether or just specific periods of time can be excluded from the interest calculation.