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Boston Tax Law Blog

Tax debt resolution, part 2: installment agreements and OIC

In the first part of this post, we discussed two possibilities for getting your tax bill paid. One possibility is to take out a personal loan so you can pay Uncle Sam. Another is to set up a short-term payment plan.

In your particular situation, however, neither one of those options may be feasible. You may have tax debt that you are unable to pay in full, even within the 120 days allowed for a payment plan.

Options for resolving tax debt, part 1: personal loans and payment plans

The new filing season is still a few months away. But it will be here soon enough, and you may already be worried about not being able to pay your taxes. Or you may have tax debt from the past that you haven't resolved yet.

If you are in a situation like this, keep in mind that you have options. In this two-post, we will discuss four possibilities.

Unfiled tax returns: 3 reasons to get them in now

If you didn't file your taxes last year, or in some other previous year, you may be feeling immobilized by indecision about what to do. That's a natural human tendency, but there are several good reasons to address the situation now.

In this post, we will list three of them.

Underreported income, part 2: Are you at risk for a tax penalty?

In the first part of this post, we noted that the IRS uses a computer program that tries to detect the underreporting of income. The Automated Underreporter Program (AUR) seeks to identify discrepancies between the income you have reported on your tax return and income reflected in reports from third parties such as banks and employers.

Given the IRS's limited resources, only about 1 in 5 of the returns with these discrepancies is reviewed by a human being. This means that in most cases a CP2000 Notice asking for more information is generated without a human signing off on it.

Underreported income, part 1: What happens when you get a notice?

You open your mailbox and find a notice from the IRS called CP-2000. Looking it over, it appears to be about underreporting of income. If you are like most people, you will probably have many questions.

In this post, we will touch upon some of the most common questions regarding assertions by the IRS about underreported income.

Fighting to get a refund of improperly collected taxes

A person generally doesn't want more of their hard-earned money being transferred from them to the government through taxes than is supposed to under the law. Unfortunately, the Internal Revenue Service sometimes collects from a person a tax that they didn't actually, under the law, owe. Such an over-collection can be very unsettling for a taxpayer and leave them wondering what they can do.

There are a variety of actions a taxpayer may be able to take in response to the IRS making an improper tax collection. One option that may be available is filing a lawsuit for the refund of improperly collected taxes.

Payroll tax compliance: IRS announces Early Interaction Initiative

Payroll taxes are a significant burden for employers. This isn't only due to the amount of taxes that must be paid. It is also the administrative aspects of withholding taxes from employees' paychecks and paying over the right amounts to the IRS at the right time.

Many small businesses use third-party payroll processing services to handle these arrangements. We discussed this type of outsourcing in our February 25 post.

Are fringe benefits from an employer taxable income?

Complimentary coffee, pastries or an occasional pizza are nice perks to get from your employer. But they are generally not considered taxable income because their value is de minimis.

It may be a different story, however, when an employer-provided perk is more valuable, such as a company-provided car.

Tax extenders and filing-season misery

Misery. Yes, it's a Stephen King novel that was made into a movie. But it is also the existential state of many taxpayers trying to comply with a more-and-more complicated tax code despite less-and-less assistance from the IRS.

IRS Commissioner John Koskinen was candid in calling last year's filing season "miserable," as budget cuts reduced the IRS's ability to provide customer service at a time when its workload was increasing due to the agency's role in implementation of the Affordable Care Act.

Will next year be any better? In this post, we will discuss the role of one of the particular challenges for the IRS as another filing season approaches: "tax extenders."

How to prepare for and manage an IRS audit

There are many worst case scenarios that one could imagine when it comes to taxes and the IRS. The federal agency could file a lien against you; you may owe the IRS a lot of money as a result of back taxes or crimes; or you could be audited by the IRS.

With respect to the last possibility on that list, there are many things that a taxpayer should do in order to effectively deal with his or her audit.

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