Category: Tax Resolution Technical Training

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

Profile Image

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

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

What years do I include on my Power of Attorney (2848 – POA) or Tax Information Authorization (8821)

I frequently get asked by tax professionals who handle representation work (Collections and Exam), what years do I put on a Power of Attorney aka POA (Form 2848) or Tax Information Authorization (Form 8821) when I am trying to get information on a taxpayer/client, research what years they have filed or not, or need to see what payments or credits were applied?

Here is what I usually say to them. It depends. (I bet you didn’t see that one coming)

If you are having a discussion with a client and they tell you they believe the last time they filed was about 6 years ago, at a minimum I will start about 9-10 years prior to the year they said. So, if they say they last filed in 2016, then I will generally put on the Form 2848 or Form 8821 2013 to the current year.

If you just need information for 2021, in general, I still suggest putting at least 3 years prior to 2021. That would mean 2018 to 2021.

If they are really unsure or there is a very reasonable doubt as to the starting year, I will usually go back to the year 2000. I will explain to the client as it will keep me from having to go back to them and ask for another one causing further delay. I will generally tell them it can take 3-5 weeks for the IRS to process my POA (which often it does, but as of the time I am writing this, they are generally taking a week or less).

Now the next question is why would I do that? Well, there are a few reasons.

  1. the client’s fuzzy recollection may cause you to have to do another POA if you did not get all of the necessary years. For many clients, it is difficult to get them to sign one (not mention a lot of work by my team), but to two it two or more times is crazy.
  2. If you need to see if your client qualified for a first-time penalty abatement opportunity, then you will need to see if they have a clean history for the 3 years prior to the year at issue.
  3. If you don’t get it right, the IRS cannot tell/give you anything about years you do not have authority for. Occasionally, I have had a nice IRS employee on the phone tell me there is an
… Continue reading

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