What happens if the IRS fails to recognize a bankruptcy discharge for taxes? What can taxpayers do if the IRS violates the law in trying to collect a discharged tax debt? These are important questions that have a significant impact on taxpayers’ rights and financial well-being. Fortunately, there is a remedy. In the recent case…
Tax Articles
Compensatory Damages May Not be Taxable
The tax code is an intricate and complex framework that governs the collection of taxes in the United States. While numerous provisions have been contested in courts, it is quite rare for a provision to be deemed unconstitutional, particularly for a tax code section that has already undergone substantial litigation. In the landmark case of…
Increased Fees for IRS Tax Installment Agreements
The IRS recently reviewed the government cost of processing IRS tax payment installment agreements, which has resulted in the IRS proposing to increase the costs for filing IRS installment agreements. The IRS tax payment installment agreement is one of the remedies of last resort for taxpayers who have outstanding tax liabilities. There are a number…
The IRS’s “Last Known Address” Rule
The Internal Revenue Service (“IRS”) plays a crucial role in the collection and enforcement of tax laws in the United States. In order to keep taxpayers informed of important events and meet legal requirements, the IRS frequently communicates with them via mail. The IRS LOVES letters. However, many taxpayers are unaware that the IRS is…
Taxes & Limited Liability Companies
A Limited Liability Company (“LLC”) is a popular business entity choice for entrepreneurs and small business owners. It offers the flexibility of a partnership or sole proprietorship, while also providing limited liability protection for its owners. Once formed, LLC owners have the ability to determine how the entity is taxed for Federal income tax purposes,…
IRS Private Tax Debt Collection Agencies
The IRS spends a considerable amount of time and money trying to collect unpaid tax debts. There has been some thought that private collectors would have better results. Congress recently enacted Section 6306 to allow the IRS to assign certain delinquent tax accounts to private collection agencies. The new law and how it is implemented…
Colorado Tax Penalty Only Applies to Compliance Employees
The state tax authorities can be more aggressive than their federal counterparts when assessing and collecting taxes, particularly in collections. It is often advised to pay state taxes while haggling with the IRS about federal taxes. This does not necessarily mean that the state will always prevail, as there are cases where they do not,…
Estate Tax Valuation vs. Income Tax Valuation
Valuation often becomes a point of contention in tax disputes where the taxpayer asserts one value while the IRS puts forth another. The preferred valuation in disputes can vary depending on the circumstances. For instance, a higher valuation for buildings and building structures is advantageous when claiming depreciation deductions, while a lower valuation for real…
IRS Recalculation Doesn’t Justify Abating Interest
Taxpayers may sometimes request the IRS to recalculate their tax liability, and the IRS may grant such a request, but this does not necessarily mean that the IRS accepts all the tax positions set out or omitted from the return. If the IRS subsequently recalculates the amount of tax due again and increases the amount…
The IRS Announces an Online Tax Payment Agreement System
The IRS recently announced that it will be launching a system to allow “tax professionals” to apply online for tax payment agreements or tax installment agreements for their clients. IRS Online Pro’s & Cons While this is a step in the right direction, it does present yet another opportunity to consider whether the IRS should…