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IRS Installment Agreement Fee & Form 13844

Writing a check

If you are in need of an installment agreement through the IRS to pay off your debt in monthly payments, you are going to need to know how much it will cost you to process your application. Generally, the IRS will charge a taxpayer $105 for a non direct debit installment agreement and $52 for a direct debit installment agreement. This fee is charged by the IRS simply to pay the cost of processing your application for an installment agreement. … Read more

Tax Claim Priority in Bankruptcy

Clock on the wall saying bankruptcy

In bankruptcy, all creditors will file a claim for the debt they are owed and then the bankruptcy court will distribute the money to the creditors depending on the priority of their claim. Once all secured claims are paid, unsecured claims will be paid in statutory order. Second priority claims are tax claims that arise from expenses in preserving the bankruptcy estate that may accrue while the case is pending. These types of claims usually result from administrative expenses that … Read more

Tax Returns Due after a Bankruptcy Filing

Filing form for bankruptcy

It is not a well-known fact that the IRS has the ability to force a taxpayer out of bankruptcy if they do not file a tax return that becomes due after the commencement of the bankruptcy proceeding. This is not limited to the IRS either, any taxing authority has the right to either force a taxpayer out of bankruptcy or have the bankruptcy court convert the case to a different type of bankruptcy. Bankruptcy Tax Return Request If the IRS … Read more

Grounds for Acceptance or Rejection of an Offer in Compromise

Handshake

The IRS will use three primary criteria when deciding whether to accept or reject an offer in compromise. It is theoretically possible to obtain an offer in compromise while not qualifying for any of the following criteria, however it is very unlikely. Ground for Acceptance or Rejection The grounds for acceptance or rejection of an offer in compromise include the following criteria: 1. Doubt as to collectability – If you file an offer in compromise on the grounds that there … Read more

Certificate of Subordination & Form 14134

Red help icon

In the event the IRS has placed a tax lien on your property, it may be possible to have them subordinate their tax lien in the interest of another lien if it will help facilitate collection of the tax. This basically means the IRS will allow another lien in front of their lien if it will help collect a tax against the taxpayer. This will only happen if the IRS is sure there will be enough money left over after … Read more

IRS Collection Letters an What They Mean

White mailbox with white letter

There are four main collection letters that the IRS may send you in the mail to inform you of a collection effort against you. It is important that you know about these letters and what they mean to you. Many of them are time sensitive and action is usually necessary in a small amount of time. Knowing how to handle these letters will result in a better outcome. Four IRS Collection Letters 1. Letter 11 (Final Notice of Intent to … Read more

IRS Closing Agreement

Snail crossing the finish line

The use of a closing agreement by a taxpayer is to completely resolve a tax dispute without giving the IRS the option to reopen the case later. Normally the way to close a case is to either use Form 870 or Form 870-AD, however, these Forms leave the taxpayer vulnerable to their case being reopened in the future by the IRS. Without proof of fraud, or other types of schemes, the closing agreement stops the case from being reopened at … Read more

Jeopardy Assessment Immediately Forces Tax Collection

The IRS has the ability to force an assessment or collection of tax if it believes collecting the tax is in jeopardy because of delays. The IRS also has the ability to issue a termination assessment which can force you to declare all income up to that point in the year. A termination assessment basically asks you to pay your tax immediately for income you have earned in the current tax period. Be advised that it is best practice to … Read more

Notice of Deficiency & Taxpayers Last Known Address

If you have a tax deficiency and the IRS needs to notify you they will send you a letter to the last known address that is on file. This address is the place of residence that the IRS believes the taxpayer lives and will receive the notice. It doesn’t guarantee that you will receive the notice in certain situations. Notice of Deficiency Mailed To Last Known Address The IRS will use the address that is listed on the most recent … Read more

You Have the Right to Reject Unnecessary IRS Examinations

It is true; the IRS must operate under the rights that are given to you as a taxpayer. Some of these rights given to taxpayers are the ability to reject unnecessary IRS examinations. The general rule is that the IRS is only allowed to examine your books and records once per year. This is a very general rule though, there are many exceptions that can occur that are not applicable. One of these exceptions is a second examination of a … Read more