If you can’t pay your tax debt in full, or if paying it all will create a financial hardship for you, an offer in compromise (OIC) may be an option. o Doubt As to Liability (DATL) o Doubt As to Collectability (DATC) o Effective Tax Administration (ETA)

In the current digital asset climate of plummeting values, frozen accounts, and bankruptcy filings, if you own investments in digital assets, such as virtual currency, cryptocurrency and/or non-fungible tokens (NFTs), you might wonder when it is appropriate to report losses on your tax return.

Installment agreements are one of your options if you can’t pay your taxes in full when they’re due. These agreements are payment plans that that allow you to pay your debt over a time you establish with the IRS. You must stay current with monthly payments, timely file your tax returns, and make estimated tax payments. Future refunds will be applied to unpaid taxes until the tax balance is paid in full.

A paid tax return preparer is an individual hired by a taxpayer to prepare the taxpayer’s federal tax return or claim for refund. Every year, tens of millions of taxpayers pay someone to prepare their federal tax return.

If you have determined you do not quality for an Employee Retention Credit (ERC) you claimed, the IRS has provided guidance on whether you can withdraw your claim, and if so, how to withdraw your claim.

Taxpayers and congressional offices in the San Jose geographic area now serviced out of the Oakland, CA office.

The IRS mails the Notice of Intent to Levy and Rights to a Hearing to notify taxpayers of their unpaid taxes and the IRS intention to levy to collect the amount owed if the balance is not paid. This letter, which is usually sent by a Revenue Officer, is required by IRC § 6331 before the IRS issues a levy, unless collection is in jeopardy. Taxpayers are generally entitled to a pre-levy hearing under IRC § 6330(f), although there are some exceptions. These exceptions include: if the levied source is a state tax refund, the IRS has issued a disqualified employment tax levy, or the tax debt is that of a federal contractor. For further information, see Publication 594.

Imagine you live in a county that has been so severely battered by storms or wildfires that the federal government has included your county in a disaster declaration.  Imagine that the IRS grants you an extra four or six months to file your tax return and make your tax payment.  Then imagine you file your return early but properly decide to hold off on making payment until the postponed deadline.  That is what an estimated one million taxpayers living in California and seven other states (Alabama, Arkansas, Florida, Georgia, Indiana, Mississippi, and Tennessee) have done in the last few months.  To their surprise and dismay – and contrary to IRS guidance and press releases – those taxpayers are now receiving “notice and demand” collection letters from the IRS telling them their payments are currently due and the IRS will begin to charge interest and penalties if the taxpayer doesn’t pay by a specified date on the notice that is months earlier than IRS guidance permits.  Confused taxpayers and practitioners are wondering why they are receiving a balance due notice since they live in a disaster relief area and had months of additional time to pay.

Taxpayers need not do anything to receive this administrative relief. The IRS is automatically removing (abating) failure-to-file penalties for 2019 and 2020 returns. If a taxpayer paid the penalty and the account is full paid, the resulting overpayment will first be used to offset other liabilities and the balance will be refunded.

Taxpayers are often surprised after they file their tax return requesting a refund to receive a smaller amount or no refund at all. Many are not familiar with the law that provides the IRS the ability to reduce their refund and apply it to prior federal and state liabilities. The IRS’s authority to offset a taxpayer’s refund is found in IRC § 6402. Each year, many taxpayers rely on their tax refund to pay necessary living expenses or other critical expenses. For a taxpayer who is relying on their refund to pay basic utilities or stay in their home, an immediate economic hardship can arise if the IRS applies their refund to satisfy another state or federal debt. TAS has recommended that Congress pass legislation prohibiting the IRS from offsetting certain portions of a taxpayer’s refund, such as the Earned Income Tax Credit, intended as an anti-poverty program to help low- to moderate-income workers and families.

If someone files a fraudulent tax return using your name and identifying information, resolving the issue can be time-consuming and frustrating. Even when the IRS detects and stops the false return – which it is often able to do – subsequent returns filed under your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN), including your legitimate return, may be flagged for additional review. Resolving tax-related identity theft can take taxpayers months and in many cases years to work through the IRS’s heightened identity verification requirements to get their refunds, as taxpayers are the ones who bear the burden of proving their identity.

A “withdrawal” removes the public NFTL and assures that the IRS is not competing with other creditors for your property; however, you are still liable for the amount due and the statutory lien remains valid for the amount of assessment.