NEW LEGISLATION
PROMISES A KINDER
GENTLER IRS

Congress promises a more level playing field concerning IRS collection activities. On July 22, 1998, President Clinton signed into law The IRS Restructuring and Reform Act of 1998 which will greatly affect the conduct of revenue officers who are responsible for tax collection activity. Despite this pervasive legislation, it will likely take time for revenue officers to adjust their abusive behavior.

IRS MUST NOW
FOLLOW THE FAIR DEBT
COLLECTION ACT

Before The IRS Restructuring and Reform Act of 1998, the IRS was allowed to act more aggressively than other debt collectors. Now, the IRS

(1) may not talk to a taxpayer if represented by a lawyer;

(2) may not talk to a taxpayer at their place of work if the IRS knows or should reasonably know such communication is not permitted by the employer;

(3) may not use the telephone to harass,
abuse, or annoy;

(4) must show a contact name and telephone number on all manually generated correspondence; and

(5) revenue officer may not use an alias name on all manually generated correspondence.

IT PAYS TO FIGHT
IRS PENALTIES

Although the IRS denies it, the IRS almost always applies penalties, often incorrectly. I see penalties applied in approximately 90% of my client's cases. Penalties can be abated!

How I Challenge IRS Penalties.
Penalties can be challenged before payment, and in many cases after payment. There are two ways I typically do it. First, I ask the revenue officer to abate the penalty. If the revenue officer refuses to abate it I file an appeal (an appeal is conducted by a different, and often more reasonable IRS employee). Second, if the penalty is a return based penalty (ie. negligence, fraud), I ask for audit reconsideration where a different IRS department considers my request.

I have a high success rate in abating penalties. Most recently I successfully abated a $25,000 penalty. Do not be afraid to fight the IRS on penalties!

HOW YOU CAN RESOLVE A PAST DUE TAX LIABILITY WHEN YOU CANNOT
PAY IN FULL

Assuming your tax liability is correct, there are generally three ways to resolve it so the IRS will leave you alone and not conduct enforced collection activity against you. For all of the following solutions, a detailed financial statement must be filed (unless an installment agreement for a tax liability under $10,000) that discloses your or your business's

assets, liabilities, income, and expenses.

1. INSTALLMENT AGREEMENT.Here you or your business negotiate a monthly payment which continues until the tax liability is paid. More than one year's tax liability may be handled in this manner. The starting point is to take gross income less required taxes less necessary expenses. Then the negotiation process begins.

2. OFFER IN COMPROMISE. Here you or your business offer the IRS an amount less than the tax liability (pennies on the dollar) for a full settlement.