August 24, 2011

Ways To Appeal An IRS Tax Collection Decision

First, go to the Appeals homepage to decide if Appeals is the appropriate choice. Select the applicable appeal procedure for specific instructions on preparing your request for Appeals. If you decide you want to present your dispute to Appeals, you will need to prepare a request for Appeals and mail it to the office that sent you the decision letter.

Trust Fund Recovery Penalty (TFRP)
If you are a person responsible for collecting/withholding, accounting for, and depositing or paying specified withholding taxes, employment or excises taxes, and willfully fail to do so, you can be held personally liable for a penalty equal to the full amount of the tax that was not paid, plus interest. A responsible person for this purpose can be an owner or officer of a corporation, a partner, a sole proprietor, or an employee of any form of business. A trustee or agent with authority over the funds of the business can also be held responsible for the penalty. The assessment of the trust fund recovery penalty is applicable to the following tax forms: CT-1, 720, 941, 943, 944, 945, 1042, and 8288.

Collection Due Process (CDP)
Collection Due Process (CDP) is available if you receive one of the following notices:
Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 (Lien Notice), a Final Notice - Notice of Intent to Levy and Notice of Your Right to A Hearing, a Notice of Jeopardy Levy and Right of Appeal, a Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing (Levy Notices), and a Notice of Levy and Notice of Your Right to a Hearing. If you disagree with the Appeals decision, you may be able to take your case to court.

Collection Appeals Program (CAP)
Collection Appeals Program (CAP) is generally quick and available for a broad range of collection actions. However, you can’t go to court if you disagree with the Appeals decision.

For tax help and solutions, call a qualified California tax attorney. Call Mitchell A. Port at (310) 559-5259.

August 2, 2011

IRS Rules Change About Innocent Spouse Requests

Available only to someone who files a joint return, innocent spouse relief is designed to help a taxpayer who did not know and did not have reason to know that his or her spouse understated or underpaid an income tax liability. Publication 971, Innocent Spouse Relief, has more information about the program.

Existing regulations require that innocent spouse requests seeking equitable relief be filed within two years after the IRS first takes collection action against the requesting spouse. The time limit was designed to encourage prompt resolution while evidence remained available. The IRS plans to issue regulations formally removing this time limit.

The Internal Revenue Service announced that it will extend help to more innocent spouses by eliminating the two-year time limit that now applies to certain relief requests.

The IRS will no longer apply the two-year limit to new equitable relief requests or requests currently being considered by the agency.

A taxpayer whose equitable relief request was previously denied solely due to the two-year limit may reapply using IRS Form 8857, Request for Innocent Spouse Relief, if the collection statute of limitations for the tax years involved has not expired. Taxpayers with cases currently in suspense will be automatically afforded the new rule and should not reapply.

The IRS will not apply the two-year limit in any pending litigation involving equitable relief, and where litigation is final, the agency will suspend collection action under certain circumstances.

The change to the two-year limit is effective immediately, and details are in Notice 2011-70.

Call a California tax lawyer for help solve hurdles when making your innocent spouse claim. Call Mitchell A. Port at (310) 559-5259.