I.R.S. Tax Lien & Collection Solutions

     Newsletter For Businesses And Individuals

Seventh

IS A FEDERAL TAX LIEN THREATENING YOUR LIVELIHOOD?

For many business and individual taxpayers, the filing of a federal tax lien can be the kiss of death.

 

It is possible to get the tax lien withdrawn, which means the IRS admits the lien should never have been filed.

The IRS recently announced it may withdraw a federal tax lien in certain circumstances where the lien threatens the taxpayer’s livelihood, including

- the withdrawal will facilitate collection of the tax liability;

-filing the lien was premature or procedures were not followed;

  

- the taxpayer has entered into an installment agreement; and

-the withdrawal would be in the best interest of the taxpayer as determined by the National Taxpayer Advocate, and in the best interest of the United States as determined by the IRS District Director.

While any taxpayer can represent itself and seek withdrawal, hiring a competent tax lawyer will dramatically increase the probability of success.

I.R.S. ANNOUNCES IT WILL ACCEPT OFFERS IN COMPROMISE BASED ON ECONOMIC HARDSHIP


In perhaps the most significant development in the offer in compromise program, the IRS recently announced it will accept a taxpayer’s offer in compromise if collection of the total liability would create an economic hardship. Offers in compromise, if accepted, fully satisfy a taxpayer’s tax liabilities for pennies on the dollar.

   Traditionally, the IRS would only consider an offer in compromise (1) where a taxpayer could not pay its tax liabilities, and (2) where a taxpayer claimed it did not owe the liability. Now, economic hardship is a third possibility of acceptance. The new IRS rules list some examples where acceptance under economic hardship is proper;

- liquidation of a taxpayer’s assets to pay tax liabilities would not allow the taxpayer to meet basic living expenses. 		  - taxpayer’s dependent has a long-term illness which will require the taxpayer to use its assets for this purpose rather than to pay taxes.

- the taxpayer has a long-term illness, medical condition, or disability, where the taxpayer will need his or her assets for this condition.

While it remains to be seen how the IRS applies its new economic hardship analysis, there has never been a better time to file an offer!