Category: Tax Resolution Hot Sheet

2024 IRS Collection Financial Standards released today (4/22/24)

The IRS Collection Financial Standards outline the average living expenses for individuals and families across the nation, covering essential categories such as food, clothing, housing, healthcare and transportation. As tax professionals, it’s our duty to ensure that our clients are accurately represented when negotiating with the IRS. By using these standards, we can help our clients achieve a fair and manageable resolution to their tax troubles. In most cases.

Now, here’s an important update that you won’t want to miss. The IRS has just released new Collection Financial Standards today (April 22nd, 2024), reflecting the current economic conditions, inflation and cost of living. This means that it’s time to roll up our sleeves and update the financials of our current client cases with the new numbers. Failing to do so could result in inaccurate assessments and potentially unfavorable outcomes for our clients.

When applying the IRS Collection Financial Standards, it’s essential to thoroughly review your clients’ financial situations. Take into account their income, expenses, and any unique circumstances that may affect their ability to pay. By subtracting the standard living expenses from their income, you can determine the amount that the IRS expects them to allocate towards their tax debts. This information is crucial when negotiating installment agreements, offers in compromise, or other resolution options.

As licensed tax professionals, it’s our responsibility to stay up-to-date with the latest IRS regulations and guidelines. The release of the new Collection Financial Standards serves as a reminder of the ever-changing landscape of tax resolution. By incorporating these updated standards into our practice, we can provide our clients with the most accurate and effective representation possible.

So, let’s embrace the challenge and use our expertise to navigate the complex world of IRS collections. With the new Collection Financial Standards in hand, we can help our clients find a path towards resolving their tax issues while ensuring that their basic living expenses are met. Together, we can make a difference in the lives of those we serve and demonstrate the value of having a knowledgeable and dedicated tax professional in their corner.

We will be updating our CFS Quick Reference Guide shortly. Check your email for how to access it.

Warmly,

Dan

Want to get some great education! Then click here to find out more about the Tax Rep Defender Odyssey 2024

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Dan Henn, CPA, CTR™
Managing Member
Tax Pro Academy, LLC

P.S. Want to learn more about the Tax … Continue reading

Tax Resolution Hot Sheet™ #6: Tax Pro Account, Data Security and Sharpening the Saw

In this issue:

  • Tax Pro Account – A new version of something old
  • Data Security – Are you taking it seriously?
  • Time to Sharpen the Saw

This is Dan this week. I am going to keep it short as today is my 27th wedding anniversary and I am going to spend a wonderful day with my wife.

Tax Pro Account – A new version of something old

The IRS released recently that tax professionals can input a Form 2848 and gain immediate access to a client/taxpayer’s tax account. You can access the Tax Pro Account page at irs.gov with this link.

If you already have an eservices account, then there is nothing special for you to do.  Just login like you were accessing your online eservices account.

The trick here is that your client also has to have an online IRS Account, which they can do here. If they cannot access an IRS online account, you have to do it the old fashioned way.

This new access is an offshoot of the old DA (Direct Authorization) system, where we could access our eservices account and input directly the Form 2848 and have immediate access to IRS transcripts.  The IRS took this away in 2015 due to the risk and potential for fraud.  Glad to see there are bring this back, in a new form.  Only time will tell to see how successful (or stressful on us) this will be.

I suggest you read the info on the Tax Pro Account page as well as the online IRS Account page in grave detail so you understand the process. It will make life so much easier if you can access the transcripts now than waiting for the CAF to process your POA or waiting hours to talk to PPS.

Data Security – Are you taking it seriously?

I have been attending the IRS Tax Forum for almost the last 13 years. As an experienced tax pro, I don’t learn a ton of new things, but I do get a few good nuggets of information each year. There are also a number of topics that you see year after year that you have to get the feeling they are trying to tell you something.

Data Security is just one of those topics. If you are not already getting enough emails (yeah, I know that is an LOL moment), then I suggest you sign up for … Continue reading

Tax Resolution Hot Sheet™ #5: IRS Levy Procedural Deviations for ACTC

In this issue:

  • Three procedural deviations on levy action in relation to ACTC, Recovery Rebates, and RRF Payments
  • Are you meeting the needs of your clients?

A Trio of Procedural Deviations in Relation to Certain Levies
Two IRM procedural deviations were issued on July 13, 2021, to join one that was issued March 18, 2021, in relation to levy action taken against tax debtors that receive certain federal payments. These are of no surprise to any tax pro, of course, but it’s nice to see the Service still paying attention to such small details that can directly impact the lives of millions of Americans.

These SB/SE Collection memos can be found here:

Each memo says more or less the same thing, just in relation to a different source of funds. In short, the procedural deviations stipulate that the IRS must release levies that attach to any account containing funds from one of the three sources. Also, IRS personnel should not issue levies against bank accounts that are known to contain such funds.

If a Collection employee believes that such an account should still be levied, each memo specifies that such levies must be run up the flagpole to either an Area Director or Campus Director before commencing with levy action or refusing to release such a levy.

For 1040 tax debtors with children in particular, this can, for all intents and purposes, provide a get out of levy free card. Since levies should not be issued on accounts to which Advance Child Tax Credit funds are deposited until the conclusion of such monthly payments in December 2021, a shrewd taxpayer representative can effectively “shield” one client bank account from levy action through the end of the year. If your client is eligible for ACTC payments, but is foregoing them to avoid having to deal with potential issues in 2022, it might be worth rethinking that.

Protecting clients from levy action is one of the biggest benefits that a tax pro can bring to a tax debtor, and this can now provide a short-term avenue for doing so, thus giving you time to correct the other underlying issues that got the taxpayer in trouble in the first place.

Ready to learn more about levy releases? Check out CTR-161: Levies & Levy Releases for 2 CE/CPE hours, inside the Tax Resolution … Continue reading