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Showing posts from May, 2011

IRS New Policies Help Taxpayers Pay Back Tax Debt and Avoid Federal Tax Liens

Due to the worst economic downturn the country has faced since the Great Depression, The Internal Revenue Service has recently announced that they are enacting new policies structured to help people in tax debt (a little late in my opinion but then again better late then never).
Highlights of the new polices:
When a taxpayer enters into a streamlined installment agreement the IRS will withdraw their federal tax lien.  The IRS will also withdraw their federal tax lien if a taxpayer is currently participating in a regular Installment Agreement and later converts to a streamlined installment agreement though a direct debit installment agreement and requests a withdrawal of federal tax lien.Currently, small businesses with under $10,000 in unpaid back taxes are able to participate in the IRS's Installment Agreement program, which helps businesses pay their taxes over 24 months as a last ditch alternative to a lien. Under the new policy, small businesses will be able to parti…

Offer in Compromise 2010 acceptance rate remains under 25%

Offer in Compromise acceptance rate per the 2010 IRS Data Book remains at under 25%.  In the midst of the second greatest economic downturn in the history of the United States the Internal Revenue Service received over 57,000 Offer in Compromises submitted by taxpayers across the country. Of the 57,000 plus Offers that were submitted only 13,866 were approved.

In a time when the unemployment rate hovers around 9% (The official unemployment index, based on a monthly survey of sample households, counts only people who reported looking for work in the past four weeks. It doesn't account for part-time workers who want to work more hours but can't, given the tight job market. And it doesn't include those who have given up trying to find work. When the underemployed and the discouraged are added to the numbers, the unemployment rate rises to 16.6%) one would think that the IRS would be more lenient in accepting these Offers.

Difference Between Being Represented by a Tax Attorney vs. an Enrolled Agent or a Certified Public Accountant

With myself being an E.A. or Enrolled Agent one of the most frequent questions I am asked is, "what is the biggest difference between hiring an Enrolled Agent or a tax attorney"?  I decided to put together a post to discuss the advantages and disadvantages each may have over the other, or where one CLEARLY has the advantage when considering who to hire.
Pros-Cons Hiring a Tax Attorney; TRUTH: A non-tax attorney may know about as much as you know about handling Tax Debt-Don't Buy the Hype! 
When I speak of a tax attorney I am not talking about one of these large "tax debt relief" companies such as Tax Masters who employ "attorneys"; just because someone is licensed as an attorney does not mean they have a tax background, let alone a LLM (Masters of Law) which provides an attorney to focus on a specific topic of law, such as tax law. Those three years of law school will not do their tax debt clients much good unless they also acquired knowledge through a…