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IRS Debts Tax Procedure

IRS Collections When Taxpayer’s Income Varies

In Charnas v. Commissioner, T.C. Memo. 2015-153, the U.S. Tax Court addressed whether a lawyer who had variable income from year to year was able to pay his outstanding tax debt. The court concluded that the IRS erred in not considering the variable nature of the taxpayer’s income in determining whether he could pay his […]

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Installment Agreement IRS Debts IRS Liens & Levies Tax Procedure

Court Says Tax Lien Does Not Have to Be Filed Prior to Entering Into an Installment Agreement

In Budish v. Commissioner, T.C. Memo. 2014-239, the U.S. Tax Court held that the IRS erred in insisting on a tax lien being filed before it would accept an installment agreement. This case serves as a reminder that a tax lien does not have to be filed if it creates a hardship that would make […]

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IRS Debts Offer in Compromise Tax Procedure

Informal Offer in Compromise? Is There Such a Thing?

What if you reach an oral agreement with the IRS to settle the tax debt, but then the IRS back tracks on the agreement? If you didn’t submit the offer on a Form 656, do you have any rights? The court addresses this in Bergdale v. Commissioner, T.C. Memo. 2014-152. Facts & Procedural History Mr. […]

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IRS Debts IRS Liens & Levies Tax Procedure

IRS Notice of Intent to Levy Sustained Despite IRS Not Following Its Procedures

In Eichler v. Commissioner, 143 T.C. 2, the U.S. Tax Court said that the IRS Notice of Intent to Levy was proper even though the IRS failed to follow its policy to check an installment request into its system which would have stopped IRS collection actions. Facts & Procedural History  The IRS assessed Section 6672 […]

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IRS Debts Offer in Compromise Tax Procedure

Example of How the IRS Evaluates Offer in Compromise for Doubt as to Collectibility

In Zumo v. Commissioner, T.C. Summary Opinion 2013-66, the U.S. Tax Court concluded that the IRS was correct in rejecting an offer in compromise based on doubt as to collectibility. The case provides a good overview of the IRS collection process and how the IRS evaluates offers in compromise. Facts & Procedural History Dr. Zumo […]

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IRS Debts Offer in Compromise Tax Procedure

Offer in Compromise Rejected Where Records of Household Member Not Provided

In Winters v. Commissioner, T.C. Memo. 2012-183, the U.S. Tax Court concluded that the IRS correctly rejected an offer in compromise submitted based on doubt as to collectibility based in part on the taxpayer not providing records to establish the income of a person who resided in his home. Facts & Procedural History Mr. Winters […]

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IRS Debts Offer in Compromise Tax Procedure

Offer in Compromise: Documenting the Value of Assets

The IRS carefully examines the value of the taxpayer’s assets when it considers whether to accept an offer in compromise based on doubt as to collectiblity. Even a few dollars can result in a rejected offer. Substantiation is key. The Wright v. Commissioner, T.C. Memo. 2008-259, case is an example. It involves a $2,000 offer […]