Thursday, July 24, 2008

Facts the Average Taxpayer Does Not Know

Before I started working for a tax resolution firm, I was unaware of the nuonces centering around tax liability and tax returns. I think its safe to say that the average person does not know a great deal about the collection process with the IRS as well as the meanings of the terms. Just in case you find yourself in tax liability delinquent status and you need help, don't hesitate to seek out a licensed tax rep that can give you peace of mind and guide you through the process.
Below are a list of definitions to help you better understand the tax jargon with the IRS:

Levy- A garnishment attached to a taxpayer's wages, bank account, account receivable, social security income, etc. If issued a bank levy, the institution can "freeze" the funds the IRS is requesting at the time of levy.
Lien-Did you know that the IRS is the most preferred lien holder? There were actually 636 (k) liens filed in 2007. Whether a taxpayer does or does not own any property, IRS will issue a lien against their SSN to hinder them from purchasing, selling or transferring any property. A lien will effect their credit report. A lien is not released until the tax is paid in full or an Offer In Compromise is accepted or tax is abated. If the taxpayer is preparing an OIC and it is accepted, the lien will be released once the OIC payment terms have been satisfied. If not preparing an OIC, the lien will be released when the tax debt is either paid in full or the statute to collect the tax has expired. The Internal Revenue Code of 1986 provides for a statutory lien of the Federal Government to be filed for a tax debt after a proper assessment, notice and demand, and a neglect or refusal to pay. Liens can be discharged or subordinated under special circumstances i.e OIC, Tax abated, tax paid in full,or CSED expires. A Federal Tax Lien is formally recording in the appropriate public records office (county recorder, MENSE, Secretary of State (UCC) or US District Court) in order to establish priority over creditors, judgement lien creditors and other lenders.
L1058- When a taxpayer receives this notice, you are considered in the Collection Status (ACS) or status 22.Before this, the taxpayer is in Customer Service and liens have not been filed. Therefore you can get into an agreement with the IRS. However this will depend on whether or not you owe under $25,000.
Collections Division or ACS-The organizational arm of the IRS which has the mission of collecting delinquent taxes and securing delinquent tax returns for individuals, businesses, corporations, trusts, or any other entity that owes the IRS money. The Service Center Collection Function, the Automated Collection Site, or the Field Collection Function is all part of the Collection Division. The revenue officer is required to effectively collect against any Balance Due accounts.
RSED-Refund Statute Expiration Date. The IRS actually has three years from the due date of return to get your refund that may be due,
ASED- Assessment Statute Expiration Date. This is where the IRS has three years from the date of filing to access the balance owed. Say for instance and audit needs to be performed, the IRS will have three years to assess the liability from the date that return was actually filed.
CSED- The IRS has ten years from the date of assessment to collect monies (from the assessed balance date).

If you have tax liability or tax return questions, contact someone today who can work towards a resolution and stop the alluring IRS today.

2 comments:

j.d. said...

I have heard from sources I respect, that there is no law requiring the payment of federal taxes from wages. Also, that a Supreme Court decision defined "income tax" by the definition currently used for corporate gains and unearned income. They specifically said "not wages earned".
do you have a comment on this?
(other than they have guns and badges so you better pay)

IRS Help For You said...

If you owe taxes, it would behove you in the long run to pay them to prevent ascrued penalties & interest. You know what they say, the only two definites in this world are death and taxes