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Doubt as to Collectability Offer in Compromise – Paul Gaulkin CPA

Big letter stamp IRS

If a taxpayer wishes to submit an offer in compromise on the basis of doubt as to collectability, they will need to show the IRS: 1. It is unlikely that the tax liability can be collected in full 2. The amount offered in satisfaction of the liability reflects the reasonable collection potential Without proving these two points to the IRS, it is likely that an offer will be denied on the basis of doubt as to collectability. Reasonable collection potential … Read more

IRS Tax Lien Search – Paul Gaulkin CPA


The IRS is required by IRC Sec. 6323(f) to issue a Notice of Federal Tax Lien according to local law. If the lien is against real property, the notice must be recorded in the public index of the office that has been established by local law for recording Federal Tax Liens. The purpose of this procedure is for inspection of the lien and proof of its existence. In the event the lien is against personal property, the notice if filed … Read more

Revising an Accepted Offer in Compromise Form 656 – Paul Gaukin CPA

clock showing change

Sometimes a taxpayer whose Offer in Compromise has already been accepted by the IRS needs to submit a revision to the original agreement. This can occur in a variety of situations, one that is common however, is a taxpayer inability to pay the balance on a tax return that is filed in years following the acceptance of the Offer in Compromise. If the taxpayer was unable to pay and therefore neglected to submit a revision, the IRS would classify the … Read more

When to Submit an Offer in Compromise – Paul Gaukin CPA

Building blocks

An Offer in Compromise can be submitted at any time as long as it is not solely used as a tactic to slow down the collection process. This means that a taxpayer can submit an Offer in Compromise during the examination process, at appeals, after a case is in Tax Court, and in another other stage of the collection process. The earlier the better though, when you submit an Offer in Compromise collection activity is forced to cease until after … Read more

Requesting an Equivalent Hearing Form 12153

Business Hearing

A person who does not timely make a request with the IRS for a Collection Due Process hearing can still do so by requesting an administrative hearing with the Appeals Division known as an equivalent hearing. An equivalent hearing will generally follow the same guidelines as a Collection Due Process hearing as well as the matters that will be heard in such a hearing. Filing Form 12153 In order for the IRS to carry out an equivalent hearing, the taxpayer … Read more

IRS Examination versus Collection Appeals


In an IRS examination, the facts are fixed and do not change often, whereas a collection appeal the financial information of the taxpayer is being constantly updated. This means that if something were to change involving the financial position of a taxpayer in a collection appeal, it would change the case completely. Collection Appeals An example of this could be a situation where the taxpayer receives an inheritance after they have filed for a collection appeal, which may eliminate their … Read more

Levy on Intangible Property Form 668-W & Form 668-A

Notice in the mail

There are two types of forms the IRS may use when attempting to levy intangible property from a taxpayer. Both of these forms theoretically accomplish the same thing but one is very specific in what it is able to levy and the other is broader based and only used in unusual situations where the IRS is attempting to levy a taxpayer’s rights to an asset and not their wages. Form 668-W & Form 668-A The first form is Form 668-W … Read more

IRS Unreported Income Audit Probe

Board saying lost and found

In the event that a taxpayer is audited and the IRS believes there is unreported income that has not been stated on the tax return, they will do an investigation into whether or not they are correct in their assumptions. The IRS will generally ask the taxpayer a series of questions in an interview which may involve the taxpayer’s standard of living, their tax return information and their books & records. The IRS will use this information to compare what … Read more

IRS Office in Compromise Disadvantages

Document of financials

You may have heard of a program the IRS offers called the Offer in Compromise program. This program allows the taxpayer to settle their debt for a fraction of what the IRS is requesting. Although this program has many advantages, it also has many disadvantages that the taxpayer needs to be aware of. IRS Office in Compromise Disadvantages All the following points can be found in the terms located on Form 656. These disadvantages include: 1. When the IRS accepts … Read more

Wrongful Levy Relief

Pig underwater

If your property is ever levied by the IRS, there may be relief if they determine that it was actually wrongfully taken from you. Usually the person that makes this determination is your Area Director within the IRS. The IRS is authorized by regulations to return property to a taxpayer in the exact same position as before the levy had occurred. This means that if the asset were to decrease in value because of the levy, the IRS would have … Read more