Can I Deal with The IRS on MY Own?

     If you receive a notice from the IRS regarding a document request, you could send in the requested documents and settle your dispute. However, if a Revenue Agent contacts you via phone or by letter, I would recommend getting professional help immediately.

Important Deadlines to Remember

     Taxpayers have 90 days to petition the US Tax Court for relief after receiving a "Notice of Deficiency" or their rights are deemed to be waived.

     Taxpayers have 30 days to file for a "Collection Due Process Hearing" after receiving a Final Notice of Intent to Levy. Internal Revenue Code Sec 6330 states that the IRS must give the taxpayer an opportunity to participate in an administrative hearing before they can levy assets, if the proper written request is timely made after receiving the levy notice.

     Taxpayers have 30 days to file for a "Collection Due Process Hearing" after receiving a Federal Notice of Tax Lien. Internal Revenue Code Sec 6320 states that the IRS must give the taxpayer an opportunity to participate in an administrative hearing after they file a tax lien on you, if the proper written request is timely made after receiving the lien notice.

     The CSED or collection statute expiration date marks the end of the ten year period on your IRS records. Find out when that date is before you agree to any payment contracts.

     Generally, the IRS must complete their audit and mail your notice of deficiency within three years of the filing of your tax return, for their assessment to be legal. Your tax return is deemed filed when it is delivered to the USPS for mailing, pursuant to a timely filed tax return, including extensions or when it is received by the IRS, pursuant to a late filed return.

IRS Offers To Compromise Tax Debts

     The IRS has a program to settle tax debts for less that the face amount of the debt, based on your financial ability to pay. Taxpayers submit a form 656 and a form 433a, financial disclosure form, along with a 20% TIPRA payment, to the IRS to begin the offer process. For more information, see OIC page.

Installment Agreements

    Never make payments to the IRS based on an oral agreement. Alternately, enter into a written agreement by submitting a form 433d and make sure that it gets signed by an IRS manager. Entering into an installment agreement with the IRS to pay a tax related debt could be a sound option if you do not qualify for an offer in compromise. With this type of agreement, you pay the debt over time and are protected from bank levy action. Depending on the amount you owe, you may have to submit a financial disclosure form, Form 433.

What About Filing For Bankruptcy?

    Yes, you may be able to discharge your tax debts in bankruptcy, as long as the debt is not trust fund tax and has aged 3 years from a timely filed return, 2 years from a late filed return, or 240 days after an assessment of tax after the filing of the return. If you are thinking of filing for bankruptcy protection, there are a few things that you need to understand before you talk to an attorney. First, select a bankruptcy attorney that has a strong background in taxation. Surprisingly, many make major mistakes with the IRS, like listing the unsecured dischargeable tax debt as an eighth priority claim instead of on the schedule F with all the other debts.

How Long Can the IRS Collect on My Debt?

     The IRS can collect a tax debt up to 10 years under the Internal Revenue Code. It is possible, however, to have the IRS on your back longer than 10 years, in the case of lien filings
where the IRS can seek to revert a tax lien to a judgment in State Court.