Tax Lawyer's Blog

Tax Relief

Description

Conditions

Installment Agreement

You pay a monthly amount based on your ability to pay calculated by deducting your necessary living expenses from your monthly income after taxes

Must comply with the terms of the installment agreement and be compliant with all tax laws for five years.

Usually a tax lien will remain on the record throughout the term of the installment agreement

Offer In Compromise

You pay the IRS a single amount either in a lump sum or over 24 months and the remainder of your tax debt is written off

Must comply with the terms of the Offer and be compliant with all tax laws for a period of five years after that

Non-Collectible Status

You pay nothing. The IRS will monitor your account by reviewing your annually filed tax return to see if your income has increased.

No conditions. The IRS has merely determined that they cannot collect anything from you “at this time.”

Innocent Spouse Relief

You do not have to pay the portion of the joint tax liability that is attributable to either the unreported income or an wrongful deduction of your spouse

You must affirmatively apply for innocent spouse relief within specified time limits

Wage and Bank Levy Release

The IRS will release its levies against your wages and/or your bank accounts

This is not “free.” In exchange for a levy release you will have to demonstrate that you qualify for one of the other forms of tax relief

Lien Subordination

The IRS will subordinate its federal tax lien if you can prove that it is in its best interest to do so. This is generally done in refinance or home sale situations where the IRS will get at least a partial payment of the tax debt

You must prove that a lien subordination is in the government’s best interest.

Statute of Limitations

The IRS has only 3 years to make an assessment against you with respect to an income tax return and it has only 10 years to collect the assessment once it is made

If you have committed civil fraud, the 3 year statute on assessment does not apply.

There are certain acts of the taxpayer that will extend the statute of limitations on collections

IRS Lawsuit

You have the right to sue the IRS if it engaged in any wrongful collection action against you that caused you to lose money or assets

Damages recoverable in IRS lawsuits are limited to $1 million

Taxpayer Advocate

You have the right to solicit the assistance of the Taxpayer Advocate’s office if you feel that the IRS is not following the law or its own procedures

You must make a reasonable attempt to resolve the problem at the level at which it was created