A federal law enacted almost a year ago authorized the IRS to start working with private contractors to collect overdue federal tax debts. Next spring, four contractors will begin taking over older, overdue accounts that the Service is no longer actively working.
An estate tax return must be filed after the loss of a loved one. The federal Estate and Gift Tax exemption has increased over the last few years to its current $5,450,000. A couple can combine the exclusion to pass up to $10.9 million dollars without federal tax consequences.
Make a mistake in the filing process or offer an amount that is too low and you could have to start from scratch again. In our last post, we explained how it is necessary to be up-to-date in filing your tax returns.
It may become impossible to stay ahead of tax debt as penalties and interest add to the balance. An offer in compromise (OIC) may provide some relief. It is a way to settle with the IRS for less than the full amount you owe.
The amount of the time that the IRS has to collect back taxes is generally 10 years. Certain actions can stop the clock. An offer in compromise is one of them.