MODULE 1. IRS Personnel & Access to Information

Transcription

1 MODULE 1 IRS Personnel & Access to Information

2 Module 1: IRS Personnel & Access to Information Created Exclusively for ASTPS Sponsored Seminars Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Module 1 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Download File Contents PDF of: Slides 3 per page Selected IRS Publications Forms Discussed in the Course Selected Internal Revenue Manual Pages AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 Objectives What To Do and How To Do It Instruction and a Few War Stories IRS Practice & Procedure Insights Authority to Practice Before IRS IRS Problem Solutions AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

3 Module 1: IRS Personnel & Access to Information Today s Topics MODULE 1 Reference Materials & Productivity S/W IRS Personnel Access to Information AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Coming Attractions MODULE 2 Currently Not Collectible Status Non-Filer Issues Bankruptcy Support AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 Coming Attractions MODULE 3 IRS Collection Notices Statutes of Limitations Review Liens, Levies and Releases AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

4 Module 1: IRS Personnel & Access to Information Coming Attractions MODULE 4 Financial Analysis Equity Component MODULE 5 Financial Analysis Income Component MODULE 6 Offers in Compromise AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 Coming Attractions MODULE 7 OIC: Planning Tips, & Techniques Collateral Agreements MODULE 8 Installment Agreements Penalty Abatement AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Coming Attractions MODULE 9 Employment Tax Issues MODULE 10 Innocent Spouse Relief Injured Spouse AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3

5 Module 1: IRS Personnel & Access to Information Coming Attractions MODULE 11 Appeal of IRS Actions Audit Representation MODULE 12 Analysis of an IRS Problem AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 10 Reference Sources PPC GUIDE: Dealing With the IRS RIA CheckPoint, CCH, Kleinrock s, Parker Tax Service IRS Publications: irs.gov, IRM AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 11 Productivity Software Pit Bull Tax Software SPI7MN Canopy Tax ASTPS10 Tax Help Software ASTPS 10 ASTPS Discount Code ASTPS Discount Code ASTPS Discount Code Tax Tools Call and request 10% AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 12 4

6 Module 1: IRS Personnel & Access to Information IRS P e r s o n n e l AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 13 IRS Front-Line Personnel Revenue Officers (R.O.) Do not determine tax Collect 2 things AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 14 IRS Front-Line Personnel Revenue Agent (R.A.) Can determine tax due; field audit Tax Compliance Officer (T.C.O.) Can determine tax due; office audit Limited authority AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 15 5

7 Module 1: IRS Personnel & Access to Information Other IRS Personnel ABUSIVE TAX AVOIDANCE TRANSACTIONS AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 16 Organizational Overview IRS Re Structured Mandated by RRA 1998 Based on taxpayer groups AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 17 Organizational Overview Individual Taxpayers with Wages & Investments AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 18 6

8 Module 1: IRS Personnel & Access to Information Organizational Overview Small business/self Employed (SB/SE) Employment, excise, estate & gift AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 19 Organizational Overview Large Business Tax Exempt Organizations AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 20 Information Access Biggest Problem IRS? or Client? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 21 7

9 Module 1: IRS Personnel & Access to Information Power of Attorney Form 2848 File by fax CAF Unit SF Revoke (Taxpayer) SF 1.9 Withdraw (Practitioner) o Copy of original & cover letter May no longer be filed on line AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 22 Power of Attorney Form 2848 Separate Forms Required by IRS Individuals Only AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 23 Power of Attorney Form 2848 CAF & PTIN Tax Matters Allows Most Acts AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 24 8

10 Module 1: IRS Personnel & Access to Information Power of Attorney Form 2848 Refunds Withdraw/Retain Prior Eligible to Practice AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 25 Form 8821 Tax Information Authorization File by fax to CAF Unit Separate for each taxpayer May be filed in firm name Multiple staff can be appointees Disclosure only, no representation Avoids a full Power of Attorney SF AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 26 Obtaining Information Freedom of Information Act (FOIA) Individual Master File (IMF) SF oaka Literal Transcripts Business Master File (BMF) Information Returns Master File (IRMF) Tax Return Transcript SF AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 27 9

11 Module 1: IRS Personnel & Access to Information Obtaining Information * Wage & Income Transcripts SF Record of Account SF TXMODA Practitioner s Priority* SF Ask for specific documents AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 28 Appropriate Questions to Ask Returns filed? When? Any unfiled returns? Amounts of unpaid tax, penalty, and interest? When was the tax assessed? Have IRS correspondence? Contacts to date with IRS? Commitments made to IRS? Has the client filed any of the following: Bankruptcy? Offer in Compromise? Innocent Spouse Relief Request? Installment Agreement Request? Appeal? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 29 Next Session MODULE 2 Currently Not Collectible Status Non-Filer Issues Bankruptcy Support AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 30 10

12 Module 1: IRS Personnel & Access to Information American Society of Tax Problem Solvers A Non Profit, Professional Association of Tax Problem Resolution Practitioners Visit us at: AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 31 11

13 MODULE 2 Currently Non Collectible Non Filer Issues & Bankruptcy

14 Module 2: Currently Non-Collectible, Non-Filer Issues & Bankruptcy Created Exclusively for ASTPS Sponsored Seminars Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Module 2 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Today s Topics MODULE 2 Currently Not Collectible Status Non Filer Issues Bankruptcy Support AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 Currently Non-Collectible AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

15 Module 2: Currently Non-Collectible, Non-Filer Issues & Bankruptcy Currently Non-Collectible IRM SF 2.1 T/P is unable to make payments at this time Enforced collection actions suspended Collection Statute of Limitations Accrual of Penalties and Interest AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Non-filer Issues AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 IRS Non-Filer Policy Stmt Policy Statement P SF 2.2 Found in IRM Approved Delinquent returns Enforcement of filing requirements Most recent 6 years of returns AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

16 Module 2: Currently Non-Collectible, Non-Filer Issues & Bankruptcy Non-filer Statistics Over 7 Million Non filers (5%) IRS emphasis: Large & High profile Cases 3,500+/ Cases are Prosecuted Per Year No Prosecution on Less Than 3 years AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 Discovery of Non-Filers Document matching 1099 & W-2 forms Reporting by disgruntled employees, unhappy spouses, competitors Compliance Initiative Program Specific businesses hard to find by 1099 Ex: Small contractors, taxi companies Collection referrals Vehicle registrations & Sec. of State filings AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Filing Recommendations File in separate envelopes Enclosed checks $5.11, $5.12, $5.13, $5.14, Cheaper than certified mail Non Clearing check indicates lost return Staple a letter requesting nonassessment AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3

17 Module 2: Currently Non-Collectible, Non-Filer Issues & Bankruptcy Non-filer Cover Letter 1 of 2 Paragraph 1: Request Non Assessment Enclosed is a personal tax return for <year(s)>. I request non assessment of FTF & FTP penalties as the taxpayer has reasonable cause. Paragraph 2: State Facts Illness, Professional advice, matrimonial, natural disaster AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 10 Non-filer Cover Letter 2 of 2 Paragraph 3: Cite IRM SF Chap. 20 which has a list of acceptable excuses. Paragraph 4: Conclusion & Summary Taxpayer s facts fit IRM list of reasonable cause, state your conclusion and restate your request, based on that conclusion. So, I request IRS not assess penalties AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 11 Bankruptcy Support Three basic rules of dischargeability Return must be three years old Return must have been filed for two years Tax must be assessed for at least 240 days Trust fund taxes are not dischargeable Trust Fund Recovery Penalty is not dischargeable AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 12 4

18 Module 2: Currently Non-Collectible, Non-Filer Issues & Bankruptcy Next Session MODULE 3 IRS Collection Notices Statutes of Limitations Review Liens, Levies and Releases AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 13 American Society of Tax Problem Solvers A Non Profit, Professional Association of Tax Problem Resolution Practitioners Visit us at: AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 14 5

19 MODULE 3 Statutes of Limitations IRS Collection Notices & Liens, Levies & Releases

20 Module 3: Statutes of Limitations, IRS Collection Notices, and Liens, Levies & Release Created Exclusively for ASTPS Sponsored Seminars Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Module 3 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Today s Topics MODULE 3 IRS Collection Notices Statutes of Limitations Liens, Levies and Releases AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 IRS Unpaid Tax Notices 5 weeks 5 weeks 5 weeks 5 weeks AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

21 Module 3: Statutes of Limitations, IRS Collection Notices, and Liens, Levies & Release IRS Unpaid Tax Notices on Filed Return, 1 of 2 CP 14 Balance Due SF 3.1 CP 501 Reminder Notice SF day demand & lien warning CP 503 Important Notice SF 3.3, Did not respond, want to help, please call CP 504 Urgent Notice SF 3.4, Levy certain assets, start asset search, file lien Understanding Notices IRS Pub. AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 IRS Unpaid Tax Notices on Filed Return, 2 of 2 Final Notice Intent to Levy SF Letter day letter for CDP Pre filing Notice of FTL Filing SF 3.13 Letter day letter for CDP SF Post filing Statutory Notice of Deficiency SF day letter for Tax Court Petition AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 Statutes of Limitation Assessment Statute 3 years from due date or filing date whichever is later Collection Statute 10 years from date of assessment Tolling events Bankruptcy, Offer in Compromise, CDP (Collection Due Process) AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

22 Module 3: Statutes of Limitations, IRS Collection Notices, and Liens, Levies & Release Lien v. Levy Lien protects the government s interest Exists upon assessment Applies to all owned and after acquired May be released, discharged, or subordinated, or withdrawn Not considered a collection activity Post filing notice via Letter 3172 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 Lien v. Levy Levy is the actual taking of a taxpayer s assets Wages and Bank/Investment Accounts Continuous v. Single Occurrence Seizure is a Form of Levy Pre filing notice via Letter 1058 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Dates Not To Miss Final Notice of Intent to Levy Letter 1058 SF No levy 30 days Appeals Hearing no levy while pending Still can get hearing after 30 days (Within 1 year) Collection continues if no action is taken in the initial 30 days Notice of Deficiency 90 day letter SF Petition Tax Court litigate before paying May be rescinded (BY IRS) if agreement appears possible Q. Can the IRS file a lien during the 30/90 days? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3

23 Module 3: Statutes of Limitations, IRS Collection Notices, and Liens, Levies & Release Lien Release Effective 2/11 Automatic lien filing threshold raised $5,000 raised to $10,000 Facilitate lien withdrawal after payment Withdrawal of liens for direct debit IA $50,000 or less (May revert to $25K October 2017) Convert existing regular IA to direct debit Withdraw liens on existing direct debit IA Probationary period Easier access to IA for small businesses AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 10 Next Session MODULE 4 Financial Analysis (Equity Component) AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 11 American Society of Tax Problem Solvers A Non Profit, Professional Association of Tax Problem Resolution Practitioners Visit us at: AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 12 4

24 MODULE 4 Financial Analysis: Collection Information Statements & IRS Taxpayer s stuff Asset Valuation

25 Module 4: Financial Analysis: Collection Information Statements & Asset Valuations Created Exclusively for ASTPS Sponsored Seminars Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Module 4 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Today s Topics MODULE 4 Financial Analysis Equity Component AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 Financial Analysis 433-A (OIC) 433-B (OIC) 433-A 433-B 433-F AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

26 Module 4: Financial Analysis: Collection Information Statements & Asset Valuations Collection Information Statements (Note the Name) Financial evaluation Often the starting point of the solution 433 A SF Some Installment Agreement Requests, PPIA, CNC, Etc. 433 F: Short Form SF A (OIC) SF DATC & ETA OIC IRS Taxpayer s stuff AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Collection Information Statements (Note the Name) 433 B: Business SF All forms of business except proprietorships 433 B (OIC) SF Business OIC Signed under the Penalty of Perjury Full disclosure All lines completed or enter 0 or N/A IRS Taxpayer s stuff AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 Overview: OIC Financial Analysis Equity Component Asset Values Home $300K Auto 40K IRA A/C 300K Less: Encumbrances Mtge $250K Auto loan 30K IRA Tax 120K Equity $240K Income Component Income Wages (H) $ 8K Wages (W) 2K Allowable Expenses Total $ 9K Excess/mo. $1K Income component: $1K x 12 mo.=$12k Total $240K+12K = $252K AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

27 Module 4: Financial Analysis: Collection Information Statements & Asset Valuations Preparation of Forms List all property Valuation of Property Quick Sale Value (80%) Forced Sale Value (75%x80%)=60% Determine the difference between all income and allowable expense Assets and available monthly income to pay IRS Proprietors use Sec. 5 & A AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 Asset Valuation AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Non-OIC Exempt Personal Property Exempt furniture and personal effects, $9,120 ($11,400) Exempt tools of the trade, $4,560 ($5,700) Special collections AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3

28 Module 4: Financial Analysis: Collection Information Statements & Asset Valuations Fair Market Value of Real Estate County real estate assessment Market comparable Homeowner insurance replacement cost Current sales contract Recent appraisal Special circumstances of property AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 10 Equity in Real Estate Determine fair market value (FMV) Deduct necessary repairs, etc. Reduce FMV to Quick Sale Value (QSV) Subtract expenses of sale of property from Quick Sale Value Property tax arrearages Subtract encumbrances from QSV net of expense of sale Result equals equity amount AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 11 Valuation Non-Income Producing Business Assets Consider the cost of dismantling, removing, moving, and re installing Consider Availability Marketability Adaptability Proprietorship data Sections 5 & 6 of Form 433 A or 433 A (OIC) AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 12 4

29 Module 4: Financial Analysis: Collection Information Statements & Asset Valuations Cash in Bank Offer in Compromise Rule $1,000 exempt Possible Added Amount AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 13 Vehicles Offer in Compromise Rule $3,450 of Equity Exempt Married 2 Cars AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 14 Next Session MODULE 5 Financial Analysis Income Component AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 15 5

30 Module 4: Financial Analysis: Collection Information Statements & Asset Valuations American Society of Tax Problem Solvers A Non Profit, Professional Association of Tax Problem Resolution Practitioners Visit us at: AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 16 6

31 MODULE 5 Financial Analysis: Income Component

32 Module 5: Financial Analysis: Income Component Created Exclusively for ASTPS Sponsored Seminars Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Module 5 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Today s Topics MODULE 5 Financial Analysis Income Component AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 Financial Analysis 433-A (OIC) 433-B (OIC) 433-A 433-B 433-F AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

33 Module 5: Financial Analysis: Income Component Income Component AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Overview: OIC Financial Analysis Equity Component Asset Values Home $300K Auto 40K IRA A/C 300K Less: Encumbrances Mtge $250K Auto loan 30K IRA Tax 120K Equity $240K Income Component Income Wages (H) $ 8K Wages (W) 2K Allowable Expenses Total $ 9K Excess/mo. $1K Income component: $1K x 12 mo.=$12k Total $240K+12K = $252K AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 Section A & 433-A (OIC) Gross Income National Standard Expenses Medical Standard (National) Local Standards Allowable Expenses SF Exceptions AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

34 Module 5: Financial Analysis: Income Component Gross Income Taxable and non taxable Earnings of all types Net from Part 5, Pg. 6 (Schedule C) Depreciation? Business loans? Retirement income Social Security? Net from rental activity Similar adjustments as Schedule C Alimony? Child Support? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 National Standard Expenses SF 5.3 Food Household expenses Apparel and services Personal Care products Miscellaneous Generally No Credit Card Payments AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Medical Standard (National) No documentation required for: Under 65 $54 per month per person 65 and over $130 per month per person Standard Is in addition to health insurance Actual expense exceeding standard Allowed with documentation Generally excludes elective cosmetic and dental SF 5.4 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3

35 Module 5: Financial Analysis: Income Component Local Standards Housing & Utility Standard Transportation Standard Lesser of Chart or Actual Exception Justify excess expenses AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 10 Housing & Utilities (Local) LOWER of actual or chart Census Bureau & Bureau of Labor Statistics County and Family Size Includes: Mortgage or rent, property taxes, interest, insurance, maintenance, repairs, gas, electric, water, heating oil, garbage collection, telephone and cell phone SF AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 11 Transportation Standard (Local) Ownership cost National Monthly operating expenses Regional Married allowed two Public transportation amount Possible to claim both? SF 5.8 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 12 4

36 Module 5: Financial Analysis: Income Component Other (potentially) Allowable Expenses Child care Taxes Health care Court ordered payments Involuntary deductions Secured debt Accounting and professional fees for representing your client before IRS Dependent care Life insurance Disability insurance for self employed Union dues Professional fees Expenses for physically or mentally handicapped Expenses necessary for family health & welfare Expenses for production of income AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 13 Reasonable Collection Potential (RCP) What can be collected from: Personal assets Personal monthly income Business assets Business monthly income AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 14 Exempt Personal Assets Cash up to $1,000 Additional cash needed to meet basic living costs Vehicle equity up to $3,450 Income producing asset Ex. Rental property AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 15 5

37 Module 5: Financial Analysis: Income Component Reasonable Collection Potential - Personal Assets 1. List all assets excluding exempt items 2. Determine FMV of each asset 3. Multiply FMV by 80% (QSV) as appropriate 4. Subtract debt on each asset from the amount determined in step 3 5. Subtract current taxes on liquidation and/or liquidation expenses 6. Result is the Reasonable Collection Potential from assets (Equity Component) AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 16 Reasonable Collection Potential - Business Assets 1. List all assets excluding income producing 2. Determine FMV of each remaining asset 3. Multiply Step 2 by 80% QSV as appropriate 4. Subtract any debt on each asset from the amount determined in step 3 5. Subtract current taxes and/or costs on liquidation 6. Result is Business Assets RCP AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 17 Collection Amount Available from Business Income 1. Start with monthly income from 433 B 2. Subtract monthly expenses per 433 B 3. Result is monthly amount available to IRS 4. Make adjustments Dep n etc. 5. Enter on 433 A 6. Proprietorship Enter on directly on 433 A AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 18 6

38 Module 5: Financial Analysis: Income Component Summary 1. Reasonable Collection Potential from Assets 2. Amount Available from Income 3. Combine amounts above to determine total RCP 4. Step 3 is not the end, consider collection potential under bankruptcy or other possible reductions AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 19 Next Session MODULE 6 Offers in Compromise Doubt as to Collectibility Doubt as to Liability Effective Tax Administration AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 20 American Society of Tax Problem Solvers A Non Profit, Professional Association of Tax Problem Resolution Practitioners Visit us at: AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 21 7

39 MODULE 6 Offers In Compromise

40 Module 6: Offers in Compromise Created Exclusively for ASTPS Sponsored Seminars Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Module 6 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Today s Topic MODULE 6 IRS Taxpayer Offers in Compromise Professional AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 Offers in Compromise DOUBT AS LIABILITY 656-L DOUBT AS COLLECTIBILITY 656 EFFECTIVE TAX ADMINISTRATION 656 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

41 Module 6: Offers in Compromise Stated Objectives: Offer Program To resolve disputes Collect what they can Fresh start Get money otherwise unavailable AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Streamlined OIC Income up to $100,000 Tax liability less than $50,000 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 5/21/12 Changes (Now incorporated in IRM) New Forms 433 A (OIC) & 656 Reduced future income calculation Income producing asset exclusion Exempt cash of $1,000 Possible additional cash Vehicles for POI or H&W family Reduced dissipation of assets No retirement of debt on 1st $400 Delinquent State & Local tax AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

42 Module 6: Offers in Compromise Application of Payments Taxpayer has the right to designate Failure to designate? Apply in the best interest of the government Non refundable payment of tax User fee = $186 (Tentative change to $300) Reduces assessed tax, no designation, no refund AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 Waiver Authority IRS may waive required payments No 20%, or No installments, and no fee on: Low income (below poverty levels), or Doubt as to Liability AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Unprocessable Any OIC that does not meet payment requirements may be returned to taxpayer as unprocessable Sans money AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3

43 Module 6: Offers in Compromise OIC Options AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 10 Determination of Processability IRM ( ) OIC deemed not processable if: Taxpayer not in compliance All returns where taxpayer has a filing requirement despite Policy Statement P Will allow 30 days to comply What about SFRs? Estimated taxes current year Enclose documentation One opportunity to correct AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 11 Determination of Processability IRM ( ) SF In business All returns filed Timely p/r tax deposits for quarter of filing OIC Trust funds paid or TFRP assessed AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 12 4

44 Module 6: Offers in Compromise Deemed Acceptance An OIC submitted shall be deemed accepted if not rejected before the date which is 24 months after the date of submission If tax liability is in dispute in any judicial proceeding the 24 month period is tolled AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 13 DATL Offer Form 656 L Discharged in bankruptcy SOL expired Tax not assessed Improperly assessed Tax was not due Penalty incorrectly assessed Never when previously adjudicated SF DATL OFFER AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 14 DATC Offer SF Complete 433 A (OIC) And 433 B (OIC), if needed Determine term and amount of payment Complete Form 656 Mail both 656 with 433 A(OIC) 433 B(OIC) if needed, and Attachments to IRS DATC OFFER AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 15 5

45 Module 6: Offers in Compromise Future Income IRM instructs Offer Examiners on how to project future income SBSE Memorandum Discusses use of collateral agreements Expanded AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 16 Two Ways to Pay an OIC OIC payment terms must be either Lump Sum or S T Deferred: Lump Sum: 5 or fewer monthly installments Excess income x 12 plus equity 20% down payment (May correct shortfall) Existing Installment Agreement? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 17 Second OIC Payment Option Short Term Deferred: 1 st payment, and all payments due while OIC is pending Excess income x 24 plus available equity Missed Payment = Deemed withdrawal Existing Installment Agreement? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 18 6

46 Module 6: Offers in Compromise Effective Tax Administration Offer Not eligible for DATL or DATC Economic hardship, or Detrimental to voluntary compliance Suggest: DATC, special circumstances AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 19 Factors Supporting Economic Hardship Long term illness Can t meet basic living expenses Can t borrow against equity Old Age Liquidation leaves taxpayer penniless Other circumstances AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 20 Factors Against Failure to file tax returns or pay tax for a number of years Deliberately avoided tax payment Tax Protestor AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 21 7

47 Module 6: Offers in Compromise OIC Stops Enforced Collection Action But, can they still file a federal tax lien? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 22 Miscellaneous Points Advise clients about processing time, etc. FAQ SF 6.24 If employment taxes: Current quarter compliance (ongoing business) Will IRS remove a lien while an OIC is being processed? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 23 Signed under penalty of perjury Form 656 Mail the offer to COIC Holtsville Memphis See 656 B AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 24 8

48 Module 6: Offers in Compromise COIC Units If you reside in: AK, AL, AR, AZ, CO, FL, GA, HI, ID, KY, LA, MS, NC, NM, NV, OK, OR, TN, TX, UT, WA, WI Mail your application to: Memphis IRS Center COIC Unit P.O. Box 30803, AMC Memphis, TN CA, CT, DE, IA, IL, IN, KS, MA, MD, ME, MI, MN, MO, MT, Brookhaven IRS Center COIC Unit ND, NE, NH, NJ, NY, OH, PA, RI, SC, SD, VT, VA, WY, P.O. Box 9007 WV; DC, PR, or a foreign address Holtsville, NY AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 25 Offer Rejected Administrative Appeal Submit Another Offer Tax Court Petition (special circumstance) Installment Agreement or PPIA Nasty IRS Dude AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 26 Part Numbers: IRM AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 27 9

49 Module 6: Offers in Compromise Part Numbers: IRM AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 28 Next Session MODULE 7 Offer Planning & Collateral Agreements AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 29 American Society of Tax Problem Solvers A Non Profit, Professional Association of Tax Problem Resolution Practitioners Visit us at: AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 30 10

50 MODULE 7 OIC Planning & Collateral Agreements

51 Module 7: OIC Planning & Collateral Agreements Created Exclusively for ASTPS Sponsored Seminars Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Module 7 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Today s Topics OIC TIPS & TECHNIQUES Planning 433 A (OIC) as Checklist Structured Payments 24 to 12 Switch Collateral Agreements Non Liable Spouse Co Habitation Issues AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 OIC Planning Ideas 433 A (OIC) as checklist Review Family Size Re position Assets Review Allowable Expenses AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

52 Module 7: OIC Planning & Collateral Agreements Equity Component Planning Asset to Asset Ex. Cash in Investment Accounts v Equity in Home Ex. Purchase auto, $3,450 is exempt Reduce Liabilities Ex. Pay down mortgage AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Income Component Planning Calculation of Future Income Base on current situation and known data Previous high income problem Allowable Expenses Prudent person IRS sets the standards Reliable vehicle Health insurance Life insurance H & W of family or POI AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 Reminder: Two Ways to Pay an OIC Lump Sum: 5 or fewer monthly installments Excess income x 12 plus equity 20% down payment Short Term Deferred: Monthly payments while OIC is pending Excess income x 24 plus available equity Structured payments permitted AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

53 Module 7: OIC Planning & Collateral Agreements 24 to 12 Multiplier Switch 1. File OIC using short term deferred (24 mo.) 2. Complete negotiations with OIC unit 3. When agreement is reached, tell Offer Examiner you want amend 656 to base offer on 12 multiplier as taxpayer has arranged a source of financing to full pay in 5 months. 4. Offer Examiner will require taxpayer to fulfill the 20% down payment requirement. Note: Offers with little or no income component do not change when using either 12 or 24 multiplier. AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 Collateral Agreement Forms Form 2261 SF Collateral Agreement Future Income (Indiv.) Form 2261 A SF Collateral Agreement Future Income (Corp.) Form 2261 B SF B, Collateral Agreement Adj. Basis of Specific Assets Form 2261 C SF 7.7 Collateral Agreement Waiver of NOL Carry forward, Capital Loss Carry forward, and Unused Investment Credits AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Co-Habitation Must allocate Housing & Utilities Ratio of: Liable Persons Income to Co Habitants Income Family size Does not change to include Co Habitant Income of Co Habitant not available? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3

54 Module 7: OIC Planning & Collateral Agreements Non-Liable Spouse Family size Includes the non liable spouse National Standard for Food, Clothing, etc. Based on family size including non liable spouse Must allocate National Standard and Housing & Utilities Ratio of: Liable Persons Income to Co Habitants Income AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 10 Next Session MODULE 8 Installment Agreements & Penalty Abatement AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 11 American Society of Tax Problem Solvers A Non Profit, Professional Association of Tax Problem Resolution Practitioners Visit us at: AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 12 4

55 MODULE 8 Installment Agreements & Penalty Abatements

56 Module 8: Installment Agreements & Penalty Abatements Created Exclusively for ASTPS Sponsored Seminars Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Module 8 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Today s Topics MODULE 8 Penalty Abatement Installment Agreements AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 Installment Agreements STATUTORY STREAMLINED PPIA AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

57 Module 8: Installment Agreements & Penalty Abatements Installment Agreements Statutory $10K or less, payable in 3 years Tax only PPIA Requires 433 A Streamlined Negotiated Installment Agreement $100K or less, payable in 84 months (Until 9/30/17 & Direct Debit) Tax, penalty, and interest IRS uses Decision IA s/w, request report AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Partial Pay I/A American Jobs Creation Act of 2004 IRC Sec Complete/accurate financial info verified Must address equity in assets Financial review every two years Potential payment increase or termination May require Form 900 Waiver Fifteen years & retired debt AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 Installment Agreement Use Form 9465 to request an Installment Agreement SF K* or less complete part 1 *Test plaun until 9/30/17 25K 50K** complete parts 1 & 2 **Test Plan until 9/30/17 File with tax return, or stand alone 9465 FS eliminated 433 D SF AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

58 Module 8: Installment Agreements & Penalty Abatements Installment Agreement Appeal Can you appeal denial of a request for an Installment Plan? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 Small Business Installment Agreement (2/24/11) Streamlined IA for small businesses $25,000 of liability Was $10,000 of liability No financial statement Allowed to pay down to qualify Direct debit required (10K 25K) 24 months to pay AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Collection Action Ceases upon request for I/A Form 2159 for payroll deduction IRS Publication 594 on IAs Does an I/A toll the SOL? SOL tolled while pending plus 30 days SF SF AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3

59 Module 8: Installment Agreements & Penalty Abatements IRS I/A Fees SF 8.24 $120 $225 non direct debit $149 On line non direct debit $31 On line direct debit $52 $107 direct debit $50 $89 re instate or re structure $43 low income (Form 13844) SF 8.25 Any day 1 st 28 th AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 10 Penalty Abatement IRM Chapter 20 STEPS TO REQUEST APPEAL OF REJECTION AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 11 Abatement of Penalties Reasonable cause Form 843 or letter Documentation Sample Letters Interest on penalty SF SF AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 12 4

60 Module 8: Installment Agreements & Penalty Abatements Abatement of Interest File Form 843 or letter Unreasonable delay or error Result of managerial or ministerial act of IRS Examples of Ministerial Acts Loss of Records Reassignment of Agent for training AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 13 Check the IRS Numbers TimeValue Software Tax Interest For Penalty & Interest Calculations Employment Tax Deposits taxpenalty.com AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 14 Grounds for Abatement The IRS was responsible for delay Taxpayer had unusual circumstances Note: R.O. may abate penalties not assessed by Exam AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 15 5

61 Module 8: Installment Agreements & Penalty Abatements IRS Delay Delay was due to IRS ministerial act Failure to abate is unfair IRS acted arbitrarily, capriciously, or without sound basis in law Taxpayer had no role in delay AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 16 Taxpayer s Circumstances Reasonable cause Acted in good faith Extent of effort to pay tax Time between event and effort to resolve AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 17 First Step Obtain a PINEX (PPS) Pen. & Int. Notice Explanation PINEX shows: All penalties and interest Date of assessment Principal tax on which interest and penalties are based Explanation of which penalties are applied Summary of Account AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 18 6

62 Module 8: Installment Agreements & Penalty Abatements First Step Alternative Tax Interest S/W Company Name: Tvalue or Time Value AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 19 Second Step Review penalties that have been assessed Determine criteria for each penalty Determine if they were properly and timely assessed If proper and timely, go to step 3. If not, challenge the assessment. AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 20 Final Step Thorough, probing interview Secure taxpayer s written, chronological time line of events Construct your reasonable cause argument(s) Cite reasons that penalty criteria should not be applied File request to abate AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 21 7

63 Module 8: Installment Agreements & Penalty Abatements Rejection Options Appeal the rejection Pay and claim a refund Prepare an OIC Request CNC Ever present Nasty IRS Dude! AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 22 Appeal Determine taxpayer compliance prior to time he/she was not in compliance Determine period taxpayer was not in compliance and cause Once cause is over, when did taxpayer start being compliant and take action to resolve non compliance Partial abatement beats no abatement Economic Hardship? Form 911 to TAO SF AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 23 Next Session MODULE 9 Employment Tax Issues AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 24 8

64 Module 8: Installment Agreements & Penalty Abatements American Society of Tax Problem Solvers A Non Profit, Professional Association of Tax Problem Resolution Practitioners Visit us at: AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 25 9

65 MODULE 9 Employment Tax Issues

66 Module 9: Employment Tax Issues Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Created Exclusively for ASTPS Sponsored Seminars Module 9 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Todays Topics MODULE 9 Employment Tax Issues AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 Employment Taxes TRUST FUND RECOVERY PENALTY AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

67 Module 9: Employment Tax Issues Employment Taxes FWT, FICA, Medicare Due date of returns Assessment Statute of Limitations AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Trust Fund Recovery Penalty (TFRP) Assessment Who can be assessed? Officer? Shareholder? Bookkeeper? Sole proprietor? Banker? Trust Fund Penalty How calculated? FWT + EE FICA + EE Medicare AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 Trust Fund Recovery Penalty Required Elements Responsibility AND Willfulness AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

68 Module 9: Employment Tax Issues Responsible Party Power to pay Power to determine which bills are paid Power to make decision AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 Willfulness Control over corporate funds Preference of other creditors Knowledge tax was outstanding AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Form 4180 Interview SF Detailed Yes/No Format Info to assess others Joint and Several Liability IRS finds t/p responsible 60 days to protest AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3

69 Module 9: Employment Tax Issues Defending the Employment Tax Case Do the 4180 interview Focus on: Who determines financial policy Bill paying authority Authority to open and close bank accounts Bank signature cards Signatures on cancelled checks regular/payroll Real authority or convenience? In how many quarters? Federal tax deposits and/or payroll returns IRS will not search for exculpatory facts Written statements to expand on short answers AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 10 Defending the Employment Tax Case Review Statute of Limitations on Assessment (ASED) Consider collectibility of TFRP No assessment of collection potential lacking 433 A not required before assessment TAO: 86% TFRP assessments uncollectible Single Owner LLC 01/01/09 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 11 Additional Notes Potential conflict: Shareholders, Officers and Relatives Pay current employment taxes Advise clients to disclose all assets AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 12 4

70 Module 9: Employment Tax Issues Summary Is business viable? Is client subject to trust fund assessment? Perform financial analysis Determine Solution OIC, IA or Trust Fund Penalty Defense AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 13 Next Session MODULE 10 Innocent Spouse & Injured Spouse AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 14 American Society of Tax Problem Solvers A Non Profit, Professional Association of Tax Problem Resolution Practitioners Visit us at: AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 15 5

71 MODULE 10 Innocent Spouse & Injured Spouse

72 Module 10: Innocent Spouse & Injured Spouse Created Exclusively for ASTPS Sponsored Seminars Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Module 10 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Today s Topics MODULE 10 Innocent Spouse Relief Injured Spouse AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 Innocent Spouse Relief INNOCENT SPOUSE RELIEF SEPARATION OF LIABILITY EQUITABLE RELIEF AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

73 Module 10: Innocent Spouse & Injured Spouse Overview Form 8857 SF Joint return Understatement + together = Innocent Spouse Relief Understatement + apart = Separation of Liability Underpayment = Equitable Relief Consider conflict of interest issues AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Innocent Spouse Relief Understatement due to erroneous item of other spouse No knowledge of erroneous item Did not derive benefit Unfair to hold responsible Questionnaire Note: Contact with other spouse AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 Separation of Liability Applies only to amounts unpaid IRS cannot give a refund of amounts already paid Applies only to understatement of liability on joint return where other spouse is deceased or you are legally separated, divorced, or lived apart for entire 12 months prior to filing Form 8857 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

74 Module 10: Innocent Spouse & Injured Spouse Equitable Relief Underpayment or Understatement Not eligible for either Innocent Spouse Relief or Separation of Liability No fraud on your part Erroneous item of other spouse AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 Domestic Abuse Victim Knowledge of understatement Signed under duress Deemed not a joint return May need to file return AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Injured Spouse Relief Non liable spouse entitled to receive own refund even on joint filed return Form 8379 Injured Spouse Claim and Allocation SF AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3

75 Module 10: Innocent Spouse & Injured Spouse Next Session MODULE 11 Appeals of IRS Actions & Audit Representation AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 10 American Society of Tax Problem Solvers A Non Profit, Professional Association of Tax Problem Resolution Practitioners Visit us at: AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 11 4

76 MODULE 11 Audit Representation & Appeals & Hearings

77 Module 11: Audit Representation, Appeals & Hearings Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Created Exclusively for ASTPS Sponsored Seminars Module 11 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Today s Topics Audit Representation Appeals & Hearings AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 Audit Representation Correspondence Audit Tax Compliance Officer (TCO) Office Audit Tax Compliance Officer (TCO) On site Audit Revenue Agent (RA) AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

78 Module 11: Audit Representation, Appeals & Hearings Audit Representation The Case of the Disappearing Auditor The Copy Happy Auditor AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Appeals & Hearings Collection Due Process (CDP) Form SF Equivalency Hearing Form Collection Appeals Program(CAP) Form 9423 SF AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 Like Tax Controversy? Don t miss the ASTPS Live 2 day Boot Camps The Spring Tax Controversy Conference Tax Problem Resolution Super Conference Held in Las Vegas each year. AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

79 Module 11: Audit Representation, Appeals & Hearings Like Tax Controversy? ASTPS is the only non profit professional association that focuses exclusively on tax problem resolution. Become a member today and receive huge benefits and discounts. Visit us at astps.org AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 Next Session MODULE 12 Analysis of an IRS Problem AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 3

80 MODULE 12 Analysis of an IRS Problem

81 Module 12: Analysis of an IRS Problem Created Exclusively for ASTPS Sponsored Seminars Rescue Squad: Troubled Taxpayers Lawrence M. Lawler Certified Public Accountant Certified Tax Resolution Specialist Enrolled Agent NTPI Fellow Module 12 AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 1 Today s Topics MODULE 12 Analysis of an IRS Problem Critical Factors AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 2 Important Concepts Production of Income Health and Welfare of the Family Economic Hardship If you don t ask, you don t get If you think your solution is fair and reasonable, pursue it all the way to Appeals. AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 3 1

82 Module 12: Analysis of an IRS Problem Critical Factors Threat of immediate collection action? Type of tax, income or employment? Employment tax problem? Company in business? Not in business, is t/p a responsible party? Individual income tax problem, innocent spouse? Available income & assets > than tax owed? AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 4 Levy Threatened Letter 1058 or LT 11 can you, should you file CDP Hearing Request? If levy in place call on the levy notice File an OIC Any proper basis If you can t get the levy released and can t file an OIC: File IRS Form 911 with Taxpayer Advocate Service Request an Installment Agreement AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 5 Your Tool Box Currently Not Collectible status Bankruptcy 3 years old, 2 years filed, 240 days assessed In business OIC for a corporation Responsible person(s) assessed Collateral agreement to avoid a lien Future income Basis reduction, Forego carry forwards AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 6 2

83 Module 12: Analysis of an IRS Problem Like Tax Controversy? Don t miss the ASTPS Live 2 day Boot Camps The Spring Tax Controversy Conference Tax Problem Resolution Super Conference Held in Las Vegas each year. AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 7 American Society of Tax Problem Solvers ASTPS is the only non profit professional association that focuses exclusively on tax problem resolution. Become a member today and receive huge benefits and discounts. Visit astps.org AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 8 Thanks for Your Attention AMERICAN SOCIETY OF TAX PROBLEM SOLVERS 9 3