IRS delaying certain TFRP assessments

The IRS has issued interim guidance that delays certain Trust Fund Recovery Penalty assessments until after January 3, 2022.

This interim guidance, issued April 27th, pertains to trust fund taxes for the following periods:

  • Form 941 for Q2, Q3, Q4 2020
  • Form 943 for 2020
  • Form 944 for 2020
  • Form CT-1 for 2020

If an employer elected to defer withholding of the employee portion of Social Security as was permitted under the CARES Act and Presidential Memorandum last year, Revenue Officers cannot pursue TFRP assessment against responsible and willful parties until after that Jan. 3, 2022 date.

The full memo is SBSE-05-0421-0021.

If you represent clients with trust fund issues, you might be interested in the TFRP-related representation courses within our CTR™ curriculum, which include:

  • CTR-201: Intro to 941 Resolution
  • CTR-202: Business Financial Analysis
  • CTR-203: 941 Resolution Options
  • CTR-211: TFRP Investigations
  • CTR-212: TFRP Assessments: Responsible & Willfull
  • CTR-214: Trust Fund Recovery Penalty Appeals (coming soon)

These classes are all 2 CPE hours, and are included with your Tax Resolution Academy® Champions membership.… Continue reading

IRS updates Collection Financial Standards for 2021

Yesterday, the IRS updated the Collection Financial Standards that define allowable living expenses for individual tax debt cases.

You can find the updated standards here.

To prepare you to apply this update, Dan will be presenting an updated version of CTR-111: IRS Collection Financial Standards & Form 433-A next week, on May 5.

Course objectives for this 2-hour CPE class are to:

  • Understand the purpose and application of IRS Collection Financial Standards
  • Explain each individual expense category and how to apply them.
  • Understand the purpose of IRS Form 433-A & 433-F.
  • Complete the Form 433 Income & Expense Table (IET).

Financial analysis is one of the two critical first steps you need to take with every Collections case, so it’s something you need to stay up to date on. For complete details and registration, visit:

https://www.eventbrite.com/e/ctr-111-irs-collection-financial-standards-for-individuals-form-433-a-tickets-152404123837

Academy Members: Attend via the link on the Events calendar.… Continue reading

Ultimate Guide to IRS Currently Not Collectible Status

The Internal Revenue Service’s collection of tax debts is supposed to be completed in a fair and equitable way. Taxpayers are classified into categories based on specific factors, and the different categories are referred to as a status. Status 53 is a category of classification used by the IRS for people who owe tax debts but who are not currently able to pay what they owe with their current income and still keep a roof over their heads. People who are categorized as being in Status 53 are considered Currently Not Collectible, or CNC for short. The Currently Not Collectible status means that the IRS will temporarily stop enforcement efforts until and unless the taxpayer’s financial situation improves and allows them to repay what is owed.

When accountants and tax attorneys have clients who simply do not have the assets or income to pay their tax debts, the CNC status might be an option. For other clients who have the ability to pay a portion of their tax debts within a reasonable time but not their entire balances, an Offer in Compromise might be a better choice. While the Collections division of the IRS will generally try to get taxpayers to enter into payment plans to repay their debts or take other enforcement measures, it is possible for experienced tax professionals to help some clients be deemed to be in Status 53 to provide them relief at least temporarily.

What is Currently Not Collectible status?

Status 53 or currently not collectible (CNC) means that a taxpayer will not have enough money to pay for their basic living expenses if they are required to make monthly payments to the IRS through an installment agreement. Under IRM 1.2.6.14, a tax debt might be deemed to be currently not collectible when a taxpayer does not have any income or assets the IRS can levy to enforce the debt. However, the IRS might also place a taxpayer in currently not collectible status when the enforcement of tax debt through payments would cause him or her to be unable to meet his or her basic living expenses. To determine whether this might be true, the IRS will evaluate the taxpayer’s finances to determine whether the taxpayer would face a true hardship through tax payments instead of simply being placed at an inconvenience.

The IRS can deem a tax debt as uncollectible when the taxpayer submits enough financial documentation … Continue reading