Collections & Resolution

The Offer in Compromise is one of the most misunderstood and oversold products in the tax resolution industry. The ads promise pennies on the dollar. The reality is a financial analysis where the IRS calculates how much it believes it can reasonably collect from you over the remaining collection period—and if that number is at least as large as your balance, your offer will be rejected. Here's how the IRS actually evaluates one. What an OIC Is An Offer in Compromise is an agr

Most people use lien and levy interchangeably. In IRS collection, they are not the same thing—not even close. The confusion matters because the correct response to each is completely different, and getting them mixed up means you're solving the wrong problem. What a Federal Tax Lien Is A federal tax lien is a legal claim the IRS places against all of your property—real estate, financial accounts, personal property, business assets—to secure a tax debt. It's a public notice th

If your business owes payroll taxes, you might assume that's a business problem. The IRS disagrees. Under the Trust Fund Recovery Penalty (TFRP), the IRS can assess the unpaid employee portion of payroll taxes directly against individuals—piercing through the business entity entirely and going after personal assets. This is one of the few places in tax law where the protection a business entity normally provides simply disappears. What Are Trust Fund Taxes? When you run payro

Envelope IRS penalties add up fast. A failure-to-file penalty is 5% of the unpaid tax per month, up to 25%. A failure-to-pay penalty is 0.5% per month. On a $20,000 balance, penalties alone can add thousands of dollars to what you owe. But the IRS has formal processes for reducing or removing penalties when the circumstances warrant it. There are two primary paths: first-time penalty abatement (FTA) and reasonable cause. They work differently, have different requirements, and

If you owe the IRS and can’t pay the full balance, an installment agreement lets you pay over time. But not all installment agreements are the same. The type you qualify for depends on how much you owe, whether you’re current on all filings, and whether the IRS needs a detailed look at your finances before approving the plan. Here are the three main types, what each requires, and how to determine which one applies to your situation. Streamlined Installment Agreement If your t

If you owe the IRS and you’ve been ignoring notices, there’s a point where the letters stop and a person gets involved. That person is a Revenue Officer. And unlike the automated system that sent those CP notices, a Revenue Officer has real enforcement power — liens, levies, seizures, and the authority to show up at your business. Having worked alongside Revenue Officers during my time at the IRS, I can tell you: this is not the stage where you want to be figuring out your op

There’s been a lot of noise lately about a potential “COVID tax refund” tied to penalties paid during the pandemic. Some articles are claiming that millions of taxpayers may be eligible for refunds based on a recent court case. Before you get too excited — or too skeptical — let’s slow down and walk through what’s actually happening. The Claim in Plain English The argument comes from a case called Kwong v. United States. The position is this: because COVID was a federally dec