Back Taxes or Tax Debt Archives

IRS collection matters: make arrangements prior to year's end

A change is coming soon in Connecticut and elsewhere regarding the method used by the IRS with respect to its tax collection accounts. Beginning in 2017, there will be a switch to using a private collection company for most individual income tax and possibly other IRS collection matters. If the taxpayer contacts the IRS and makes arrangement for paying the debt by Dec. 31, 2016, the account will stay in the IRS office, per the agency.

Will a tax mistake result in penalties from the IRS?

In our last post, we noted that interest and penalties generally accrue until a tax debt is paid off, even if the taxpayer has negotiated an installment or other type of repayment plan with the IRS. This begs the question of whether all tax disputes or miscalculations trigger tax penalties.

Do penalties accrue during an installment agreement with the IRS?

When liability over a disputed tax is at issue, our tax law firm has helped many clients prepare a strong case. Yet IRS controversies arise over more than just different interpretations of the Tax Code. For example, an individual may simply be unable to pay back taxes owed to the IRS. Perhaps the repayment of unemployment compensation or an excess advance premium tax credit caught an individual off balance.

Did the IRS fairly evaluate the collectability of your tax debt?

Our tax firm has helped many clients negotiate with the IRS. An administrative settlement can be a win for both parties: a taxpayer is able to move forward, and the IRS saves the time and expense of going to Tax Court or a federal district court.

Can innocent spouse relief be utilized in your divorce?

Readers may know that both assets and debts of the marital estate must be divided when a couple is going through a divorce. That approach reflects the general principle that a court views a married couple's income and liabilities as jointly owned or owed, respectively. In Connecticut, the division of the marital estate must also be equitable, or fair.

Is the IRS losing revenue by discouraging voluntary compliance?

American taxpayers with foreign bank accounts might face steep penalties for failing to report their assets to the Internal Revenue Service. Pursuant to a 2010 law called the Foreign Account Tax Compliance Act, foreign banks must file reports or face penalties themselves. FATCA has helped the IRS learn about many taxpayers’ previously undisclosed accounts.

Don’t show your hand too early in IRS dealings

Settlement negotiations are a cornerstone of the American legal system. In fact, one doesn’t have to be in court proceedings to benefit from this type of advocacy. When responding to administrative actions from the Internal Revenue Service, a taxpayer could benefit from the negotiating skills of an attorney that focuses on tax law.

How tax fraud and tax negligence differ, and what they mean

If you were to hear the two phrases "tax negligence" and "tax fraud" you would probably be inclined to think that they are the same thing. They both sound serious and they both deal with taxpayers who haven't fulfilled their tax obligations with the IRS, at least according to the IRS. But even though they are relatively similar, the differences are crucial enough that they deserve an explanation.

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Baker Law Firm, P. C.
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Danbury, CT 06810

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