So, what is “phantom cash flow”? And how does it affect an IRS Offer in Compromise? Well, I’m not talking about making money under the table. I am referring to the dreaded IRS “reasonable expense standards”. Basically, these are the Census Bureau median amounts for variety expense categories, including Housing and Utilities; Food, Clothing and Miscellaneous; Vehicle Ownership Cost … Read More
Drowning in Debt? Bankruptcy May Be Your Best Option
A lot of folks contact my office to discuss their IRS tax problems, and then once we talk, I find out that they have other financial problems as well Simply put, not every person is a good candidate for a bankruptcy case. If you have a lot of home equity for example, then you might not be a good candidate. … Read More
IRS Asset Seizures–should you be worried?
Yes, the IRS does seize assets such as houses and vehicles for non-payment of income taxes. But nationwide, the IRS seizes fewer than 500 homes per year. What makes you a candidate for your home being seized? Your level of cooperation with the IRS. If you are responding to IRS Notices, then there will be a pathway to resolving your … Read More
IRS Offer in Compromise: The Basics
The most heavily marketed IRS collections program involves the Offer in Compromise. Generally, this is based upon “Doubt as to Collectibility”. So, let’s say however that you do have a viable offer and after doing all the calculations, the Offer amount is $10,000. How does the Offer in Compromise proceed and what are the steps? Form 433-A and Form … Read More
IRS Tax Bankruptcy–will you protect your assets?
The majority of bankruptcy filers can use the laws to protect their assets from the Court and from the IRS and other creditors. But before we talk about protecting assets, let’s review the laws about eliminating IRS income tax debt through a bankruptcy filing. Here are the requirements (1) the taxes have to be at least 3 full years … Read More
Paying the IRS through a Chapter 13 Bankruptcy Plan
I’ve written elsewhere on my site about IRS Installment Agreements, which are payment plans to repay the IRS over a period of time (usually 72 months if it is a streamlined agreement). But unfortunately, the IRS continues to impose penalty and interest during the course of the Installment Agreement. What are the alternatives and how is one to reduce the … Read More
IRS Partial Pay Installment Agreement–a powerful, and under-utilized tool
Yes, the IRS does have the ability to accept less than a full amount required to pay off a tax liability. This is known as a Partial-Pay Installment Agreement (PPIA). In other words, you pay what you can afford (after providing the IRS with a full picture of your monthly income, family size, and monthly expenses). Comparing a PPIA to … Read More
How to file IRS Returns if You’ve Lost Your Paperwork
You want to do the right thing and file the IRS returns for the past few years. But you’re frozen with indecision because you’ve lost W-2 forms and 1099s. Failure to File IRS Returns is a Problem (and a crime) Yes, the failure to file tax returns is a Federal crime, but if you do it the right way, … Read More
Can IRS Tax Debts Disappear?
As a taxpayer, you may not be aware that the Internal Revenue Service (IRS) only has 10 years to collect a tax debt. In other words, there is a statute of limitations for tax debt and it is called the Collection Statute Expiration Date (CSED). If you this is the first time you have heard of CSED, you might conclude … Read More
Making Estimated Tax Payments-a Key to Fixing your IRS Problems
When it comes to making tax payments, employees have it easy. Their employers are obliged to withhold Social Security, Medicare and unemployment taxes from their earnings every pay period. If you are self-employed or work as an independent contractor, the IRS requires you to calculate your estimated tax payments every quarter and remit the amount you owe. You also need … Read More