Category: Tax Resolution Technical Training

Being assessed a tax penalty on top of the taxes you owe can greatly increase your total tax liability. The Internal Revenue Service states that it assesses tax penalties to encourage people to voluntarily comply with the tax laws. You are deemed to be voluntarily complaint when you make a good faith effort to meet your tax obligations. However, receiving a tax penalty can make it difficult for you to pay everything you owe. Fortunately, the IRS provides several methods for seeking an abatement of the penalties you might be assessed.

What are IRS penalty abatements?

Penalty abatement is a process through which you can ask the IRS to remove penalties you have been assessed. There are many different types of penalties that can potentially be abated. However, you have to go through the correct process before your tax penalties will be removed.

If you have been assessed a failure to file or a failure to pay penalty, you will have to request abatement to have the penalty removed. The IRS’s computer system automatically assesses these penalties when you file a return late or when you make a payment with a due balance.

Other types of tax penalties are normally assessed during IRS investigations or audits, including the fraud and accuracy penalties. You can request an abatement of a return accuracy penalty after it is assessed, but you might need to undergo special IRS procedures.

The three primary methods of securing tax penalty abatements include administrative waivers or first-time abatements, reasonable cause abatements, and Form 843 abatements. We’ll take a look at each of these processes below.

Administrative waivers/First-time abatements

If you meet the criteria for a first time abatement, the IRS might provide you with administrative relief for certain penalties, including the failure to file, failure to pay, or failure to deposit penalties. The first time abate program is available to you the first time you are assessed one of these types of penalties on one return. However, you must also meet the following specific eligibility guidelines to receive an administrative waiver or first-time abatement:

• You have filed all required returns or extensions for any returns that are currently due.
• You have made payment arrangements for any currently do taxes or have paid them.

You will be considered current with your tax return filing if you have either filed all tax returns that are due or have filed extensions for them. You cannot have … Continue reading

Tax debtors have numerous options available to them for resolving their unpaid tax liabilities. While the vast majority of tax debtors will be placed into an appropriate Installment Agreement or into Currently Not Collectible (CNC) status, the Offer in Compromise program provides an amazing opportunity for taxpayers to start fresh with the IRS…if they qualify. In this post, we explore the ins and outs of the Offer in Compromise program from a taxpayer representative’s point of view.

What is an Offer in Compromise?

The IRS Offer in Compromise is a program through which the IRS allows taxpayers to settle their tax liabilities for less than what they owe. The authority to accept less than what is owed is granted by 26 U.S. Code § 7122. Under this statute, taxpayers may submit lump-sum Offers in Compromise to settle their tax debts through a lump-sum payment or periodic payment Offers in Compromise to settle their liabilities through a finite number of periodic payments. If a taxpayer submits an Offer in Compromise to the IRS for a lump-sum, he or she will be required to submit an initial payment with the offer. People who submit periodic payment Offers in Compromise must submit the amount of the initial periodic payment with their offers.

Under IRM 5.8.1, the IRS will accept an Offer in Compromise when it deems the tax liability to be otherwise uncollectible. It may also agree to an Offer in Compromise when there is doubt about the liability owed and to support the effective administration of taxes. The goal of the OIC program is to negotiate a legal payment agreement that is in the taxpayer’s and IRS’s best interest.

Doubt about collectibility

The first ground for approving an offer of compromise exists when the IRS doubts its ability to collect the tax debt because of the taxpayer’s financial inability to pay the full amount owed. Doubt about the collectibility of tax debt may be shown when a taxpayer’s income and assets are insufficient to satisfy the full tax liability. this is the most common ground for making an Offer in Compromise. Some taxpayers who submit Offers in Compromise for tax debts that are deemed to not be collectible can settle their liabilities for a fraction of the total owed. Under IRC § 7122(d)(3)(A), the IRS must not deny an Offer in Compromise when their denial is solely based on the amount that … Continue reading

Until recently, it has been difficult for tax professionals to enter into the tax resolution world. Many have been put off by the idea of having to learn a completely new area of practice and procedure, let alone having to delve into the gory morass of the Internal Revenue Manual. However, new training options have put tax resolution certification within reach of more  tax professionals. This means that there are more ways to expand your practice.

What Is a Tax Resolution Specialist?

A tax resolution specialist is someone who helps people resolve any open debt that they may owe to the IRS. Along with tax resolution specialists, those who receive this type of training are also referred to as:

• Taxpayer representatives
• Tax relief specialists
• Tax controversy professionals
• Tax problem recovery experts

More tax professionals are starting to offer tax resolution services. If you decide to expand into tax assistance, it will give you a way to increase your income, as these cases tend to pay well. They also give you greater flexibility in how you run your business. This makes it a service that you can offer your clients year-round, giving you a way to earn a steady income instead of focusing on making most of your income when tax season rolls around.

Tax Resolution Services

Tax resolution training includes teaching you how to deal with tax issues such as:

• Examination representation
• Offers in Compromise
• Liens and levies
• Installment Agreements
• Innocent and injured spouse relief
• Penalty abatements
• Trust Fund Recovery Penalties

…and, of course, the proverbial “much, much more!”

Examination Representation

If you decide to offer examination representation services, then you’ll be standing in for a client during a tax audit performed by state officials or the IRS.

Offers in Compromise

During your taxpayer representation program, you’ll learn how to submit an offer in compromise to the IRS when it is appropriate to do so. This is the area of the tax law that allows your clients to settle their tax debt for a lower amount than what is owed. During your training course, you’ll learn when this is the best option for your clients, who qualifies, and how to get the best possible “deal” for your client.

Liens and Levies

When one of your clients owes unpaid taxes, the IRS may issue a levy. This will allow the agency to seize your client’s … Continue reading