The phrase “No Taxation Without Representation!” was coined by Reverend Jonathan Mayhew in a sermon give in Boston, Massachusetts in 1750. By 1765, the term “no taxation without representation” was in use in Boston, but no one is sure who first used it. Boston politician James Otis was most famously associated with the phrase, “taxation without representation is tyranny.” The phrase eventually became a rallying cry for the British colonists who eventually rebelled against the British Crown to gain independence during the American Revolutionary War. As Americans today, we owe the justice minded spirit of the Bostonians great homage for their willingness to speak freely their minds. Certainly taxation without representation was not for the Bostonians back then, and certainly it is not for the Bostonians today. Therefore, it does not surprise me that they have protected their right to representation throughout the years.

Being the most populous city in Massachusetts, Boston surely influenced the state legislature when it wrote the Massachusetts Taxpayer Bill of Rights. One of the tenets within the Taxpayer Bill of Rights publicly displayed on the Massachusetts Department of Revenue website plainly states, “you may obtain representation at any point in your dealings with the Department.” To some, this statement may seem insignificant or automatically taken for granted, but there are many places around the world that do not enjoy that type of freedom, let alone right. Please notice that in the statement it says you may obtain representation “at any point.” I do a lot of legal research, have been researching all the state’s Taxpayer’s Bill of Rights, and Massachusetts is the only one I remember that includes the phrase. Many states leave out your right to representation, say only that you have the right to be represented, remind you of your right to represent yourself, but only Massachusetts thought it important enough to remind the taxpayer you have a right to be represented “at any point.”

There are many states that do not have a Taxpayer Bill of Rights. Thank goodness our federal government hasn’t forgotten our history so fast. They passed their own Taxpayer Bill of Rights and is posted on the Internal Revenue Service website. It states you, as a United States taxpayer, have the right to:

• be treated professionally, fairly, promptly, and courteously by IRS employees and Private Collection Agencies contacting you on behalf of the IRS;
• disagree with your tax bill;
• meet with an IRS manager if you disagree with the IRS employee who handled your tax case;
• appeal most IRS collection actions;
• have your case transferred to a different IRS office if you have a valid reason;
• be represented by someone when dealing with IRS matters;
• and receive a receipt for any payments you make.

Yes, you have a right to be represented by someone when dealing with IRS matters. By the way, it is also your Constitutional right. It is covered under the Sixth Amendment to the Constitution and is a part of your Constitutional Bill of Rights. Of course, the right to counsel in the Sixth Amendment is talking about criminal cases, but sometimes dealing with tax matters has led to these type cases.

I do personally believe with all my heart that taxation without representation is tyranny. The good news is that you have the right to representation. The bad news is at any point, not all things will go right for every taxpayer. You can be facing an audit, levy, seizure, foreclosure, or incarceration, and if this is so, it is a good idea that you exercise your right to have representation by getting in touch with a tax attorney. If you live in or around the metropolitan areas of Springfield, Worcester, or Boston in Massachusetts, and you have been faced with a taxing dilemma, contact us today. We will get you in touch with a tax professional in your area who will be able to help you answer all the questions you may have about tax law.

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I do a lot of legal research, and I have been researching the state’s Taxpayer’s Bill of Rights. This movement, led by taxpayer protests and the state of Colorado in 1992, has gained momentum in recent years and many states have joined the bandwagon. There are a lot different ways the states have approached the movement. Many state legislatures have taken the bull by the horn and passed Taxpayer Bill of Rights laws. Other states have allowed their Department of Revenue write their legal policies and procedures when it comes to dealing with the state’s taxpayers. Some of these Bills of Rights are good, and frankly, some of them are, in my opinion, a downright insult to taxpayers. States, when dealing with the issue of our taxpayer rights, should deal with the single issue alone in a professional and non-condescending manner.

The Arizona Department of Revenue (ADOR) has put out a publication for the purpose of  informing you, the taxpayer, of your rights under Arizona tax laws. According to the publication, “the legislature passed these laws to promote fairness, confidentiality, and consistency of application of the tax laws. Arizona was the first state to have a Taxpayer Bill of Rights in 1986, and the 1994 updated version again puts us in the leadership role of protecting taxpayer rights, while ensuring that all taxpayers pay their fair share of the tax burden.” An overview of the Arizona version of the Taxpayer Bill of Rights goes like this, you have a right to:

• always be treated fairly and with courtesy by our employees;
• personal and financial information will be kept confidential;
• have your questions answered promptly and accurately regardless of the method you contact the DOR;
• have the knowledge the DOR does not evaluate any of their employees by the amount of taxes they collect or assess;
• publications explaining the collection, reporting, and payment of the taxes for the appropriate taxable classifications;
• have refunds promptly delivered to you;
• any interviews regarding deficiency in payment of any tax conducted at your place of business or at the closest Department of Revenue office and held at a reasonable time;
• have only one proposed assessment for any particular tax period for which cannot be increased except in specific limited circumstances;
• a six year statute of limitations on levies for the purpose of collecting taxes; and
• ask for an installment plan to pay the taxes.

Although these rights are not all inclusive, in my opinion, I do believe they are a refreshingly honest attempt at being professional and informative. In Contrast, the federal government has listed its Taxpayer Bill of Rights on its IRS website. It states you, as a taxpayer, have the right to:

• be treated professionally, fairly, promptly, and courteously by IRS employees and Private Collection Agencies contacting you on behalf of the IRS;
• disagree with your tax bill;
• meet with an IRS manager if you disagree with the IRS employee who handled your tax case;
• appeal most IRS collection actions;
• have your case transferred to a different IRS office if you have a valid reason;
• be represented by someone when dealing with IRS matters; and receive a receipt for any payments you make.

The main difference in the two Bill of Rights is that the Federal Bill of Rights explicitly states you have the right to be represented before the taxing entities. Not all things will go right for every taxpayer faced with being audited, so, it is a good idea that you have a tax attorney to represent you. If you live in or around the areas of Phoenix or Mesa, Arizona, and you have been faced with a taxing dilemma, contact us today. We will get you in touch with a tax lawyer in your area who will be able to help you answer all the questions you may have about tax law.

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Dawn Wells was born in Reno, Nevada in 1938. She later went on to become Miss Nevada and then became even more famous as an actress playing Mary Ann Summers on TV’s Gilligan’s Island during its run from 1964 through 1967. She ultimately starred in many TV series and a few lesser known movies.

Today, after a successful career, Wells finds herself owing the state of California more than $80,000 in delinquent taxes. The tax problem surfaced last year after the 71 year old actress filed a chapter 7 bankruptcy in California. After declaring in bankruptcy court $1.5 million in liabilities with only $1.38 million in assets, the state of California filed an $80,520 lien against Wells on March 24 with the Los Angeles County Recorder of Deeds. That means the former Miss Nevada and actress is in a lot of tax trouble.

You don’t have to be famous, an actress, or a Miss anything to be in tax trouble. If you live in or around the areas of Reno or Las Vegas in the state of Nevada, you are not alone when it comes to having tax problems of one sort or the other because there is more than one type of tax problem.

Taxation within the United States is a complex system and includes a wide array of taxation entities. There are a variety of governments that can tax you. They include: taxation from local governments possibly including one or more of municipal, township, district, and county entities; regional entities such as school, utility, and transit districts; state governments; and the federal government. Each of these government entities have their sets of complex laws, so, it is very hard for the average citizen to go through life without having some type of taxation problem. To complicate matters even further, within each government entity, there can be a variety of different sources to tax you. You can pay tariffs, sales tax, income tax, recessive taxes, social security taxes, property taxes, progressive taxes, unemployment insurance taxes, corporate taxes, excise taxes, estate taxes, transfer taxes, gift taxes, and this list is not conclusive .

For the most part, most of these government entities will try to help you alleviate the mistakes by providing you with educational material through free publications, websites, and call help centers. Most will help you figure the math on what you owe and will work with you in wide variety of ways.

In the event you do have problems, you still have legal rights. The Taxpayers Bill of Rights III was enacted July 22, 1998 for the purpose of protecting your rights as a taxpayer under federal law. Most states also have their own bill of rights when it comes to tax questions, but Nevada is one state that has not passed one as to date. Nevertheless, the federal government has posted its Taxpayer Bill of Rights on its IRS internet website. It states you, as a United States taxpayer, have the right to:

• be treated professionally, fairly, promptly, and courteously by IRS employees and Private Collection Agencies contacting you on behalf of the IRS;
• disagree with your tax bill;
• meet with an IRS manager if you disagree with the IRS employee who handled your tax case;
• appeal most IRS collection actions;
• have your case transferred to a different IRS office if you have a valid reason;
• be represented by someone when dealing with IRS matters; and

receive a receipt for any payments you make.

If you live in or around the areas of Reno or Las Vegas in the state of Nevada, and you are having problems resolving tax issues with any of the previously mentioned government entities, you have the right to be represented by a tax attorney. It is the law, so contact us today, and we will get you in touch with a tax lawyer in your area who will be able to help you answer all the questions you may have about tax law.

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I do a lot of legal research, and I have been researching the state’s Taxpayer’s Bill of Rights. This movement, led by taxpayer protests and the state of Colorado in 1992, has gained momentum in recent years and many states have joined the bandwagon.

There are a lot different ways the states have approached the movement. Many state legislatures have taken the bull by the horn and passed Taxpayer Bill of Rights laws. Other states have allowed their Department of Revenue (DOR) write their legal policies and procedures when it comes to dealing with the state’s taxpayers. Some of these Bills of Rights are good, and frankly, some of them are, in my opinion, a downright insult to taxpayers. States, when dealing with the issue of our taxpayer rights, should deal with the single issue alone in a professional and non-condescending manner.

In New Jersey, they begin their Taxpayer Bill of Rights by stating the taxpayer’s right to know. They say, “as a taxpayer, you have the right to obtain information about:

• the tax implications of any situation or transaction
• your liability and how it was determined
• any notice you receive from the Division
• your responsibilities and rights”

So, I wonder if the New Jersey governing authorities think the sum total of your rights really is in your right to know. Certainly, there is power in knowledge, but is part of your rights the knowledge of your responsibilities? Or, is asking you to understand what the government thinks is your moral obligation a  judgment that should be made by our taxing authorities? In other words, what do they mean when they say it is your right as a taxpayer to know your responsibilities?

The Merriam-Webster dictionary defines responsibilities as the quality of the state of being moral, legal, or mentally accountable. It also can mean something for which someone is responsible or has a burden. In my opinion, it is one thing to inform us of our rights as a taxpayer and quiet another to condescendingly expect us to act within some moral framework of the taxing authorities design and understanding that they hold us accountable. After all, isn’t the difference exactly why courts have come into existence?

What your rights should be as a taxpayer, is the right to be protected against unscrupulous collection activities from an overzealous state. Therefore, the onus of any taxpayer bill of rights should be pointed toward the state, not the taxpayer.  I realize that it must be hard for taxing authorities to collect taxes, and I certainly believe it is not always pleasant or a nice job. Some people just do not want to pay.

The majority of us, I believe, really do not mind paying their fair share of taxes. Where the rub comes is in determining what is fair. Our tax laws should spell out what is fair in a way that is complete and cannot be misunderstood by the greatest majority of taxpayers.

If taxing authorities really have the taxpayers rights in mind, then it may be a good thing to consider when addressing a taxpayer’s Bill of Rights, they consider only how that taxpayer may be protected from the taxing authorities and the human errors they can make. We, as taxpayers, already know all too much what our responsibilities are when it comes to paying taxes. We simply pay.

The primary and most import right that both New Jersey and the federal government should include in their Taxpayer Bill of Rights is that you have the right to be represented before the taxing entities. Not all things will go right for every taxpayer faced with being audited, so, it is a good idea that you have a tax attorney to represent you.

If you live in or around the areas of the Middlesex, Somerset, and Hunterdon counties of New Jersey, and you have been faced with a taxing dilemma, contact us today and we will get you in touch with a tax lawyer in your area who will be able to help you answer all the questions you may have about tax law.

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Al Capone, born in Brooklyn, New York  in 1899, quit school by the sixth grade and associated with a street gang becoming one of its members. Johnny Torrio was the street gang leader at the time Capone joined the group. In 1920, Capone joined Torrio in Chicago where in became an influential lieutenant in the Colosimo mob. Five years later, Capone became mob boss when Torrio was seriously wounded. Despite his reputation of all his years as a mobster racketeer, Capone was never successfully arrested and convicted of any substantial crime until 1931. On June 16^th, 1931, Al Capone was found guilty of tax evasion and prohibition charges. He was sentenced to eleven years in federal prison, fined $50,000, and charged $7,692 for court costs. In addition, he was charged $215,000 in interest and back taxes. It took the IRS to finally get the notorious Al Capone.

If you live in or around the Nassau and Suffolk counties of New York, you are probably already familiar with the biography of Al Capone, but what is interesting to me about his life is that it took the IRS to bring the notorious mobster down. Typically, the IRS investigates such things as financial fraud and tax issues, but nevertheless, of such notoriety is what has made the IRS reputation jump to life. In our modern society, the IRS has come a long way to help bridge the gap between the old IRS horror stories that use to dominate local lore of being able to strong arm the little man as they did the great criminal, Al Capone, to a more gentle approach of education. Our government, along with the rest of us, has recognized how complicated our system of tax collection really is. The new approach is helping but not necessarily alleviating all the problems. Probably the most important rights you have is being able to be represented when the need arises. Even though the IRS has come a long way in trying to work with the common taxpayer, they still have unparalleled authority when it comes to implementing the law. Paying your income taxes is the law despite what many believe or have said. The Sixteenth Amendment to the Constitution was ratified in 1913 giving Congress the power to “lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

There are a few horror stories still hitting the news upon occasion, so, the IRS still has a long way to go in alleviating its negative image, but today, it is different than in the days of Al Capone. You have protected rights by law that are recognized and openly posted on the IRS website, something not available during the Capone era. You, as a United States taxpayer, have the right to:

• be treated professionally, fairly, promptly, and courteously by IRS employees and Private Collection Agencies contacting you on behalf of the IRS;
• disagree with your tax bill;
• meet with an IRS manager if you disagree with the IRS employee who handled your tax case;
• appeal most IRS collection actions;
• have your case transferred to a different IRS office if you have a valid reason;
• be represented by someone when dealing with IRS matters; and
• receive a receipt for any payments you make.

Maybe it took the IRS to get Al Capone, but tax problems can happen to anyone, and they are not apt to have the same outcome as they did for Al. For what ever reasons, some of you will still have problems and misunderstandings with the IRS that seem to be unsolvable. When this happens, you are going to need legal counsel from a tax attorney. If you believe you have unresolvable problems with the IRS, it is your right by law to be represented. So, if you live in or around the Nassau or Suffolk counties of New York, contact us today and we will get you in touch with a tax lawyer in your area who will be able to help you answer all the questions you may have about tax law.

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If you live in or around the areas of Birmingham in the state of Alabama, you are not alone when it comes to having tax problems of one sort or the other because there is more than just one type. Taxation within the United States is a complex system and includes a wide array of taxation entities. There are a variety of governments that can tax you including: taxation from local governments possibly including one or more of municipal, township, district, and county entities; regional entities such as school, utility, and transit districts; state governments; and the federal government. Each of these government entities have their sets of complex laws, so, it is very hard for the average citizen to go through life without having some type of taxation problem in connection with law.

To complicate matters even further, within each government entity, there can be a variety of different sources to tax you. You can pay tariffs, sales tax, income tax, recessive taxes, social security taxes, property taxes, progressive taxes, unemployment insurance taxes, corporate taxes, excise taxes, estate taxes, transfer taxes, gift taxes, and this list is not conclusive. Is there any wonder that a legion of bookkeepers are hired by the private and public sectors just to keep up with the various taxes in order to help alleviate the problems? Also, with so many different sources of taxation and entities you must annually satisfy, is there any wonder that mistakes are made?

For the most part, most of these government entities will try to help you alleviate the mistakes by providing you with educational material through free publications, websites, and call help centers. Most will help you figure the math on what you owe and will work with you in wide variety of ways. In the event you do have problems, you still have legal rights. The Taxpayers Bill of Rights III was enacted July 22, 1998 for the purpose of protecting your rights as a taxpayer under federal law. Most states also have their own bill of rights when it comes to tax questions. Alabama, for instance, has established the following Bill of Rights for its taxpayers:

1. You have the right to receive a clear and simple written description of your role and the department’s role during an audit or examination before the audit or examination proceedings begin.
2. You have the right to a written description of the basis for any preliminary assessment, the basis for any penalty imposed by the department regarding any preliminary assessment, and a method describing how you can request an administrative review of any preliminary assessment.
3. You have the right to receive a written description of how to exercise your right of appeal to the Administrative Law Division or to circuit court at or before the issuance of a final assessment.
4. You have the right to have examinations conducted during regular business hours and to arrange for a convenient time.
5. You have the right to be assisted or represented by your authorized representative during dealings with the department.
6. You have the right, after giving reasonable advance notice to the department, to make an audio recording of any in-person interview with a department representative.
7. You have the right to obtain assistance from the Taxpayer Advocate on matters that have been pending for an unreasonable length of time.
8. You have the right to apply for the abatement of any penalties attributable to erroneous written advice if furnished to you by an employee

If you live in or around the areas of Birmingham, Alabama, and you are having problems resolving tax issues with any of the previously mentioned government entities, you have the right to be represented by a tax attorney. Contact us today and we will get you in touch with a tax lawyer in your area who will be able to help you answer all the questions you may have about tax law.

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You can avoid these common goofs if you will pay close attention or get qualified help in preparing your tax return. Any of these costly mistakes can not only cost you money, but they may cost you an audit and confrontation with the IRS. They are:

1. Claiming the wrong filing status. Your filing status determines a number of tax benefits like the child tax credit, earned income tax credit and dependent exemptions. Filing status choices are single, married filing jointly, married filing separately, head of household, and qualified widow with dependent child. Each choice comes with requirements. Making the wrong status choice can cost you money and a date with the IRS.
2. Claiming ineligible dependents. Make sure your dependents qualify for such, because if they do not have Social Security numbers, the IRS may disallow the exemption.
3. Failing to report all income. This means you should report every source of income, even if you don’t get a W-2 back from an employer, or a 1099 form from someone else you did work for. If these sources are ever found out, the penalties are stiff and can carry criminal prosecution.
4. Bad Math. Although your bad math may be an honest mistake, the IRS takes your returns very seriously. Make sure to double check your math and know your figures are correct. Failures in figuring you taxable income, tax amount, deductions, capital gains, credits, or money you owe or due as a refund are all red flags to the IRS. Making these “honest” mistakes can cost you an audit or a penalty.
5. Not filing the right forms. IRS instructions go to a lot of trouble to spell out who has to file which form. Filing the wrong form raises a red flag for an audit. The IRS makes publications that will instruct you in which forms to use. Supporting documents and schedules must be filed for certain deductions, credits and other items. One of the most neglected forms to file on time is the self employment tax forms. They have to be filed correctly and timely.
6. Using the wrong social security numbers. If you miss write or incorrectly use the wrong social security numbers, they will not match your government records. The IRS may disallow exemptions, credits, and deductions when this happens.
7. Failing to sign and date your return. If you do not sign or date your return, the IRS does not consider the return filed. Even E-filed returns have to be electronically signed.
8. Not claiming or misusing the earned income tax credit. Millions of low-income families qualify, but do not claim it for a variety of reasons. There are many who do not understand the requirements for claiming the earned income tax credit and do anyway.
9. Failing to report documented workers. Some taxpayers do this to avoid paying Social Security taxes or Medicare taxes for their workers, but it is against the law. It will cause the IRS to not only audit you, but they can even charge you with criminal violations.
10. Failing to check whether or not you are subject to the alternative minimum tax. If your deductions and taxes are so high as to wipe out much of your tax liability, it is a good chance you may be subject to the alternative minimum tax. This relatively new tax is a parallel tax system designed to make sure the wealthy pay their fair share, but you do not have to have vast wealth to fall under the tax. It is best to check.

If you live in or around the Santa Fe area of New Mexico, and you are facing an audit due to one or more of these common mistakes, you may need legal representation in the form of a tax attorney. Contact us today, and we will get you in touch with a tax lawyer in your area who will be able to help you answer all the questions you may have about tax law.

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In a effort reminiscent of David and Goliath, a Maryland nurse took on the IRS in tax court and won.

Lori Singleton-Clarke won the deduction for $15,000 in tuition for business school on her 2005 tax return clearing the way for others to begin deducting tuition expenses for a Master in Business Administration degree.

Prior to this ruling, the IRS rules on deducting work-related tuition were complicated, preventing many from receiving credit on their tax returns.

Ms. Singleton-Clarke fought her way through the system without an attorney, according to a story about her case in the Wall Street Journal. She is quoted as having had to spend hours calling to figure out who to send what paperwork to during the audit that led to the court appearance in November 2008. She was notified that she had won the deduction just last month.

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The Internal Revenue Service (IRS) has the authority to collect taxes for the federal government. If the IRS has reason to believe the full amount of tax debt is not collectible, they have the legal authority to settle the tax debt for a fraction of the full amount owed with an IRS tax settlement option. The IRS may be willing to settle tax debt for less than the full tax owed to avoid declaring a Michigan taxpayer’s debt as currently not collectible or having to negotiate a lengthy installment agreement.

Michigan taxpayers who are facing aggressive debt collection tactics by the IRS such as a repossession or wage garnishment should contact a tax professional such as an enrolled agent, certified public accountant or tax attorney to discuss the options for settling back tax debt with an IRS tax settlement option.

Offer in Compromise

One of the most popular types of IRS tax settlement options used by Michigan taxpayers is the Offer in Compromise. Offer in Compromise or OIC allows Michigan taxpayers to make an offer to settle their tax debt. The IRS may be willing to accept less than the full amount of tax debt owed. If the IRS accepts the offer, the tax debt outlined in the offer will be considered settled.

The IRS accepts approximately 25% of Offer in Compromise offers at the initial application level. More may be accepted after extended negotiations or a formal appeal. Penalties and interest will continue to accrue while the OIC is under consideration. If the Offer in Compromise is denied the IRS may use the detailed information they have gathered to continue their collection efforts. Offer in Compromise can be expensive, time consuming and complex. It is only one of several IRS tax settlement options available to Michigan taxpayers and it is not always the best.

Qualifying for Offer in Compromise

Michigan taxpayers who are considering an Offer in Compromise must meet one of the following requirements:

• Doubt as to Liability- Under certain conditions a taxpayer may be able to prove the amount of tax debt they have been assessed is incorrect. Taxpayers who can prove the examiner interpreted the IRS tax law incorrectly, all of their tax evidence was not considered or that more information has surfaced which can prove the tax calculation was incorrect may qualify for an OIC. This condition is not frequently met.
• Doubt as to Collectibility- This condition differs from the first in that the amount of tax debt is not in question, only the ability of the Internal Revenue Service to collect the debt. The IRS also may determine collection of the tax debt is too expensive.  If either of these conditions is met, the IRS may accept an OIC.
• Effective Tax Administration- Some Michigan residents may suffer “an economic hardship which is unfair and inequitable” if they pay their IRS tax debt. If the IRS agrees they may accept an Offer in Compromise.

Michigan Taxpayers must complete the following tasks:

• Michigan taxpayers must pay all of their future tax debt on or before the federal tax deadline for the next five years.
• Michigan taxpayers must complete all Offer in Compromise requirements.
• Michigan taxpayers must submit all of their federal tax returns by the federal tax deadline.

Installment Agreement

Installment agreements (IA) are another popular IRS tax settlement option.  Installment agreements allow taxpayers to pay all of their IRS tax debt with monthly installment payments instead of making one lump sum payment. Penalties and interest will continue to accrue until the payments are complete. It is always less expensive to pay IRS tax debt in a lump sum payment. Michigan taxpayers with debt of $25,000 or less can apply for an installment agreement to repay their tax debt within 60 months. Michigan taxpayers with IRS tax debt exceeding $25,000 should contact a tax professional for help negotiating an installment agreement.

The IRS has the legal right to revoke an installment agreement if the Michigan taxpayer fails to complete any of the following tasks:

• Failing to make all the required monthly installment payments or paying less than the agreed upon monthly payment amount. First time offenders may be extended a grace period of 30-60 days.
• Failing to file annual federal tax returns.
• The installment agreement may be cancelled if the Michigan taxpayer’s financial situation improves.
• Providing false information to the Internal Revenue service on the installment agreement application.

All Michigan taxpayers must complete the following tasks:

• All self-employed Michigan taxpayers must file quarterly federal tax returns and make quarterly estimated federal tax payments.
• Michigan taxpayers must file federal tax returns each year.
• Michigan taxpayers must pay their tax debt for the five years before the tax liability which can not be paid.
• Michigan taxpayers can not have made another installment agreement with the IRS with in the previous five years.
• A review will be done by the IRS every two years to analyze the financial status of the Michigan taxpayer.

Partial Payment Installment Agreement

A partial payment installment agreement or PPIA is available for Michigan taxpayers who can not pay the full amount of their tax debt with an installment agreement and who may not qualify for an OIC. The IRS may be willing to allow Michigan taxpayers to repay their federal tax debt with partial monthly payments. All debt which is not paid will be considered settled or forgiven by the IRS.

Penalties and interest will continue to accumulate during the PPIA payment period. It is always less expensive to make tax payments in full as soon as possible. The PPIA may be less expensive and less complicated than applying for an Offer in Compromise and it will also stop the IRS debt collection efforts such as bank levies, wage garnishment, and repossessions.  The IRS will review the Michigan taxpayer’s financial status every two years and if they are able, the IRS may require increased PPIA payments or completely cancel the PPIA agreement.

Currently Not Collectible

Under some conditions the IRS may determine tax debt is not collectible and change the tax debt status to “currently not collectible”. Michigan taxpayers whose debt is labeled currently not collectible can avoid IRS collection actions. Each year the IRS will send a notification to the taxpayer outlining the amount of debt owed. This notification is not considered a tax bill. If the IRS does not collect the tax debt within 10 years, the statute of limitations will expire on the debt and it will be forgiven.

Penalty Abatement

The IRS will penalize Michigan taxpayers for violating IRS tax regulations. Penalties may be assessed for failing to file a tax return, falsifying a refund request or providing inaccurate information on a tax return. Under certain conditions, the IRS may be willing to reduce or abate the penalties if Michigan taxpayers can provide a valid reason for the tax violation. Valid reasons for requesting penalty abatements may include: an environmental disasters, a personal crisis, a medical illness, or false tax information from a tax professional. The IRS may not lower or dismiss all penalties.

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Internal Revenue Service Tax Settlement Options

Arizona taxpayers who have Internal Revenue Service (IRS) debt and back taxes that have not been paid do have options. If the Internal Revenue Service is hounding you for payment or if they have begun aggressive debt collection efforts, you may have several tax settlement options to repay your federal tax debt.

The Internal Revenue Service, in an effort to settle the federal tax debt, may be willing to negotiate a reduced payment amount. If you are considering a tax settlement there are a variety of professionals such as enrolled agents, certified public accounts or tax attorneys who may be able to help.

Tax professionals can help answer your questions, review your federal tax returns, help file late returns and determine what options you may have to settle IRS tax debt.

Offer in Compromise

Offer in Compromise (OIC) is one of the most popular options for Arizona residents to settle IRS tax debt. Offer in Compromise may allow you to settle your IRS tax debt for much less than the original debt amount. Unfortunately, the Internal Revenue Service does not accept every offer. Many OIC offers are won after filing an appeal.

Offer in Compromise can be complicated and very time consuming. Experienced tax professionals can help complete the paperwork and help you drastically lower your tax debt. The Internal Revenue Service will consider your Offer in Compromise if you can prove one of the following conditions:

1. Doubt as to Collectibility- The Internal Revenue Service may accept your Offer in Compromise if they think they will not be able to collect the tax debt. Under this rule, there is not a question of the amount or the accuracy of the liability, only their ability to collect.
2. Effective Tax Administration- The IRS may accept your Offer in Compromise if they determine collection of the tax obligation will cause “economic hardship which is unfair and inequitable”. This condition is mainly used for the disabled or elderly.
3. Doubt as to Liability- If your tax debt has been inaccurately assessed, the Internal Revenue Service may accept your OIC application and review the tax liability.

To qualify for Offer in Compromise the following qualifications must be met:

• Individuals must pay all of their taxes on time for the next five years
• The Offer in Compromise plan must be done accurately
• Federal Tax returns must be filed in a timely manner
• All federal tax refunds will be used to pay federal tax debt obligations

Installment Agreement

Another tax settlement option is the installment agreement. Installment Agreements allow Arizona residents to pay their federal tax debt in monthly installments. The Internal Revenue Service will generally agree to an installment agreement if tax debt is $25,000 or less. There are several types of installment agreements which can vary based on the amount of tax debt owed. An Arizona Tax professional should be contacted if you owe more than $25,000 to help negotiate the best installment plan for your tax situation.

How do I qualify for an installment plan?

• You must pay quarterly tax estimates if you are self-employed.
• All tax returns for past Internal Revenue Service tax debt have to be paid
• You must file all of your tax returns and pay all federal tax debt for the last five years before the current federal tax debt you can not pay.
• You are not allowed to have another Installment Agreement with in the last five years

Partial Payment Installment

In the last few years, the Internal Revenue Service has created the Partial Payment Installment plan. The Partial Payment Installment plan will stop IRS collection efforts and allow you to repay your federal tax debt in partial payments. The Internal Revenue Service will review the plan every two years and if your financial condition improves, they may choose to stop the Partial Payment Installment plan or force you to begin paying higher payments.

Currently Not Collectible

Certain Arizona taxpayers have faced unusual financial situations. A job loss, unexpected medical crisis or death may make payment of federal tax debt impossible. In certain cases, the Internal Revenue Service may review your tax debt and determine it is “not currently collectible”.  The debt does not go away and penalties and interest will continue to accrue, but the Internal Revenue Service will cease their debt collection actions and release levies.

Penalty Abatement

If you fail to pay your federal tax debt, the Internal Revenue Service will impose severe penalties. Penalties may also be imposed for under reporting IRS tax debt, failing to file your tax forms, misstating your income or assets on your federal tax return or falsely filing for a tax refund.

Arizona taxpayers may be able to request their penalties be lowered or erased by filing for a Penalty Abatement. There must be a valid reason to not pay penalties and all penalties may not be dismissed. Arizona Tax Lawyers, tax accountants and other tax professionals will be able to help determine your eligibility for a Penalty Abatement.

Do I Need Texas a Tax Professional?

The Internal Revenue Service is not going to forget you owe them money. Aggressive debt collection tactics can include: bank levies, garnishing your wages and taking your assets. Do not ignore the problem hoping it will go away, it won’t. Contact a tax professional to get started on a resolution to your tax problems. A certified public accountant, enrolled tax agent or a tax attorney can help:

• Complete past due federal tax forms
• Avoid Arizona personal bankruptcy
• Reduce your personal or business tax liability
• Review tax settlement options such as: Partial Payment Installment plans, Penalty Abatements, Installment Agreements, Offer in Compromise, Currently not Collectible

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