The Filing of Federal Tax Liens and Abuse of Discretion.

Filing of a Federal Tax Lien as a condition for an installment agreement was an abuse of discretion.

A sculptor (working in cast bronze) filed his individual federal income tax return and reported a balance of tax due of $163,928.00. He did not pay the balance. The IRS assessed the tax, penalties and interest. A notice of intent to levy was issued and the taxpayer requested and received a collection due process hearing.

During the hearing, the taxpayer agreed with the terms of an installment agreement which would full pay the liability with monthly installment payments of $5,500.00. However, the IRS Appeals Officer insisted on the filing of a notice of federal tax lien as a condition of entering into such installment agreement. Taxpayer had negligible assets. The only source for payment of the balance owing was taxpayer’s income from his business.

Tax Lien Filing would destroy the business.

The taxpayer’s legal counsel advised the IRS Appeals Officer that the filing of a tax federal lien would destroy the taxpayer’s business rendering him unable to satisfy the terms of the installment agreement. Specifically, the taxpayer had a longstanding business relationship with a foundry (supplier) which provided the taxpayer with 30% to 50% discounts from market prices.

The federal tax lien filing would adversely impact production, sales and payment for materials.

The filing of the tax lien would adversely impact all sides of the cash flow equation. It would drastically alter the discounts previously provided. The taxpayer would be required to immediately pay for all work previously produced, and additionally have to make “up front” payments for all future work. At the other end of the spectrum, the notice of tax lien would cause buyers to cease financing petitioner by paying up front commissions out of concern that they might never receive the artwork because of the taxpayer’s financial difficulties, or because the artwork may be encumbered by the tax lien. Further, the filing of a tax lien would even adversely affect the taxpayer’s ability to pay the foundry (supplier) using his American Express credit card (to pay for materials and casting costs) because of the detrimental effect on his credit rating.

IRS Appeals Ignores Economic Realities.

The IRS Appeals Officer essentially ignored all of the above factors. Instead, Appeals issued a notice of determination sustaining the notice of levy and that a federal tax lien would be filed to “protect the government’s interest”.

I have found that the phrases “best interest of the government”, and “protect the governments interest” are phrases routinely used by the IRS in collection cases. However, they are in fact used with little or no actual mental thought process or concern as to the real world consequences.

In this case, the taxpayer filed a timely Tax Court proceeding alleging that the Appeals Officer abused her discretion by requiring that a notice of lien be filed in conjunction with the installment agreement.

The Tax Court held that the Appeals officer was in error by concluding that the Internal Revenue Manual required the filing of a notice of federal tax lien under the circumstances of this case. The Tax Court found that under the facts of this case, the Appeals determination was an “abuse of discretion” (i.e., The Appeals Officer’s determination was arbitrary, capricious, or without sound basis in fact or law).

The Tax Court found that the Appeals officer gave little, if any, consideration to petitioner’s arguments and, instead, decided a notice of lien should be filed because of her mistaken belief that she lacked discretion to do otherwise under the IRM. The Court found that the Appeals officer did not balance the need for the efficient collection of taxes with petitioner’s legitimate concern that the collection action (i.e., the notice of lien) be no more intrusive than necessary, as required by section Internal Revenue Code Section 6330(c)(3)(C). By failing to perform that function, she abused her discretion in sustaining the levy against the taxpayer’s assets.

In this case, the Tax Court rejected the determination of Appeals, and remanded the case to Appeals for a supplemental collection due process hearing with directions that proper balancing of factors be done (i.e., efficient collection of the liability vs. taxpayer’s concern that collection action be no more intrusive than necessary).

T.C. Memo. 2014-239
JAMES B. BUDISH, Petitioner v.
Docket No. 4243-12L. Filed November 24, 2014.

IRS Wrongful Levy:

The Tax Cuts and Jobs Act  extended the IRS wrongful levy periods for returning the monetary proceeds from the sale of property that has been wrongfully levied upon, and the period for bringing a civil action for wrongful levy, from nine months to two years.

The above amendments apply to:

(1) levies made after the date of the enactment of this Act, and

(2) levies made on or before such date if the 9-month period has not expired under section 6343(b) of the Internal Revenue Code of 1986 (without regard to this section) as of such date.


See IRC Sections 6343 and 6532 as amended by the Tax Cuts and Jobs Act (TCJA) (12/22/2017 Became Public Law No: 115-97).

FTB Issues Report on impact of Federal Tax and Jobs Act of 2017

How will the new federal tax law affect state and local tax deductions?

The California Franchise Tax Board has issued its preliminary report on the impact of the Federal Tax and Jobs Act of 2017 on the California tax system (including state and local tax deductions).  Items covered:

  • Temporary Reduction in Medical Expense Deduction Floor
  • Limitation on Deduction for State and Local Taxes
  • Repatriation

The report illustrates how some elements of the federal tax package affect California taxpayers and impact on state and local tax deductions.

“…Under the new law, taxpayers will still be able to deduct up to $10,000 for state and local taxes paid. Therefore, a taxpayer previously deducting $12,000 would have their deduction reduced by $2,000 because of the limit. …

“The $10,000 [State and Local Tax – “SALT”] limit is one part of a large package of changes to the federal tax code. These federal tax code changes also include provisions that will reduce the federal tax paid by individual California taxpayers and other provisions that will increase their taxes, depending on the income sources, deductions, and other specific circumstances of the individual taxpayer. Two of the most important provisions reducing federal taxes are the increase in the standard deduction and the reduction in tax rates. As a result of these provisions, there are some taxpayers who were previously claiming more than $10,000 in SALT deductions who will have their overall federal tax burden reduced by the changes to the federal tax code. …”

“…Table 4 also shows that, taking the entire federal tax change package into account, of the

2.6 million taxpayers with more than $10,000 in SALT deductions, about 900 thousand California taxpayers have lower federal tax liability under the new law then under the old law, about 100 thousand California taxpayers would have approximately the same federal tax liability, and about 1.6 million California taxpayers have an increase in federal tax liability….”

To Read the Full Report go here FTB-Preliminary-Review-of-Federal-Tax-Reform-Part-1

Stop IRS Wage Garnishment. Economic Hardship

Have a hardship?  Stop IRS wage garnishment.  By showing economic hardship you can reduce or stop IRS wage garnishment.  But, many times it is difficult to obtain a hardship determination from the IRS. For example, if you owe for a particular tax year for which the statute of limitations on collection is about to run (the IRS generally can collect on a tax debt for 10 years), IRS collection employees will seek to impose a minimum payment amount on you even if  you are  suffering from financial hardship.

The reason for this is that the IRS knows that in the near future,  it will be prohibited by law from getting payment.  In reality, the IRS will work in “reverse” and determine the amount they “need” to pay the debt before it expires. The IRS will then seek to impose that amount upon you.

IRM section (Policy Statement 5-71) provides, in part:  “A hardship exists if the levy action prevents the taxpayer from meeting necessary living expenses. In each case a determination must be made as to whether the levy would result in actual hardship, as distinguished from mere inconvenience to the taxpayer.”

Generally, detailed financial statement analysis is needed in order obtain “undue hardship” status.  The fact is that in most cases taxpayers do not prepare the financial statement forms (e.g., Form 433-A, 433-F, etc…) properly. In many cases, important facts and circumstances are not provided by the taxpayer, because the IRS forms “didn’t ask for them”.  Moreover, proper legal argument and presentation of your particular facts and circumstances is critical in order to have the IRS stop wage garnishment and bank levy.

Another problem is that the IRS will use its Allowable Living Expense “standards”, and will seek to ignore your particular facts and circumstances, as required by law.

Obtaining “currently not collectible” status merely places your account on the IRS back burner. Interest and penalties continue to accrue, and the debt grows.  However, if you are suffering from undue hardship, then you need such relief. Additionally, such may, in appropriate cases, be a planning opportunity to have the statute of limitations run on a particular tax year and have the tax debt “go away”.

When you need IRS wage garnishment and levy release assistance, please contact  – toll free 1-866-482-97





IRS Levy - Innocent Spouse Relief

Innocent Spouse Relief Attorney Services

Married taxpayers will many times file joint tax returns with their spouse in order to obtain tax benefits. For example, a lower tax rate. However, in doing so, each spouse becomes jointly and individually liable for any tax shown owing on the return (including, penalties and interest) and any additional taxes, penalties and interest resulting from an audit. This would include the situation where only one spouse was responsible for the underreported income or improper deduction. Even in that case, both spouses are jointly and individually liable. The good news is that you may qualify for innocent spouse relief.

In order to see if you qualify for innocent spouse relief, you should consult with an innocent spouse relief lawyer.  Located in California, innocent spouse relief attorney services are provided to taxpayers nationwide. In these cases, it is important that the facts surrounding the tax liability are obtained and then framed by innocent spouse relief legal counsel in the best possible legal  posture. This involves analysis of the facts and integrating such with legal authorities and citations.

In a typical innocent spouse case, the husband is self-employed. The husband didn’t report all of his income on the joint return. The wife didn’t know about the unreported income and didn’t benefit from it.  A separation and divorce takes place. The IRS conducts an audit, discovers the unreported income, and assesses additional taxes, interest and penalties.  But now, the “husband” can’t be found or may not have the ability to pay. The IRS is seeking payment for the liability and goes after the easiest target, in this case the “wife”. In other situations, one spouse may have died and the surviving spouse only learns of the tax problems after his or her spouse’s death.

There are different types of innocent spouse relief available. They include:

Innocent spouse relief.

Separation of liability.

Equitable relief.

Contact me at to see if you qualify for relief.

Toll Free:  1-866-482-9767

IRS Jeopardizing Taxpayer Representation. Practitioner Call to Action!

In my recent blog posting,  I advised how the IRS was now requiring tax practitioners to provide their personal social security number and date of birth when representing a taxpayer. This is being done under the false and fabricated pretext of “security”.  My prior posting is here .  I had written the National Taxpayer Advocates office about this issue.

As of last week (ending February 2, 2018) the Taxpayer Advocate’s Office called me regarding this matter.  The Analyst advised me that a Team had been set up to review this particular issue and that a considerable number of tax practitioners had contacted the Taxpayer Advocate concerning this.  The Analyst also informed me that some practitioners were even being asked to  provide the name of their spouse.

It is urged that tax practitioners immediately contact the Taxpayer Advocate about this invasive and abusive new procedure and request that it be immediately stopped.  Request that a Taxpayer Assistance Order be issued.

Also, contact your representative in Congress.

Contact:  Mr. Shepard , Taxpayer Advocate Analyst

Telephone:  206-946-3007

IRS Levy Relief


Passport denial, limitation or revocation - IRS violates Taxpayer Due Process Rights.

Taxpayers owing the IRS may face passport denial, limitation or revocation. The IRS is violating taxpayer rights.

On Jan. 22, 2018, the IRS began implementation of the passport certification program (passport denial, limitation or revocation). Under this program (IRC § 7345) the IRS is authorized to certify a taxpayer’s seriously delinquent tax debt to the Department of State for the purposes of passport denial, limitation, or revocation. A seriously delinquent tax debt is an assessed, individual tax liability exceeding $51,000 for which either a notice of federal tax lien has been filed and the administrative rights under section 6320 with respect to such filing have been exhausted or have lapsed, or a levy has been made. Exceptions include: current installment agreements (IAs), offers in compromise (OICs), and Collection Due Process (CDP) hearings.

The Taxpayer Advocate has advised that the IRS planned procedures for implementing this program (passport denial, limitation, or revocation) is a Most Serious Problem in its Annual Report to Congress.

The passport denial, limitation or revocation is a Most Serious Problem, due to the lack of prior notice to taxpayers and the potential for this lack of notice to infringe on U.S. Constitutional due process protections. Research estimates that over three-quarters of the individual taxpayers potentially eligible to be certified will not have received any notice at all prior to certification because they received their CDP notices prior to the IRS including passport information in these notices.

One of the major issues which the Taxpayer Advocate has focused upon is the REFUSAL OF THE IRS to exclude from the passport certification program taxpayers with already open Taxpayer Advocate cases. Moreover, the IRS has ignored the legislative history, which reflects Congress’s intent that taxpayers not be certified until their administrative rights have been exhausted or lapsed. In addition, the IRS also ignores its own guidelines. Further, the IRS has refused to exclude taxpayers who have come to the Taxpayer Advocate for help in trying to resolve their tax debts, either because they have economic difficulties or because IRS processes have failed the taxpayer.

Because the IRS has denied the repeated requests by the Taxpayer Advocate for the IRS to exclude already open Taxpayer Advocate cases from certification, the Taxpayer Advocate has taken action to protect these taxpayers.

On Jan. 16, 2018, the Taxpayer Advocate issued Taxpayer Assistance Orders (TAOs) for every one of almost 800 taxpayers, ordering the IRS not to certify their seriously delinquent tax debts to the Department of State. By operation of law, the IRS must refrain from certifying any of these taxpayers until these Taxpayer Advocate Orders are rescinded or modified.

The action was necessary due to the imminent, irreparable harm that taxpayers may face by the loss of their passports and the right to travel internationally, such constituting a clearly compelling public policy for assisting any taxpayer subject to passport certification.

For assistance, please contact

Taxpayer Advocate posting at this link – HERE

IRS Accountability at the top – can we hope for “change”?

Do you have a tax problem? Do you find yourself hitting the concrete wall of bureaucracy? A new IRS Commissioner is on the Horizon and it’s time to correct the business management model for the Office of the Commissioner.

There was a time, before the prior administration, that a one could actually reach the Office of the IRS Commissioner without too much difficulty. Attempt to locate the telephone number for the Office of the IRS Commissioner and you will be referred to the IRS web site.

In the past, a FAX could be sent to the Office of the IRS Commissioner detailing a problem and an actual response would be received. There was previously, as I recall, an Executive Services Office. Also, the IRS had a Collection Due Process Coordinator and ACS support staff which you could contact. Many times, excellent assistance was obtained using these resources. For example, at one time, I had written the Commissioner’s Office with a very troubling collection case. Shortly thereafter, I received a call and was advised (along these words) – “…you wrote the Commissioner, stuff rolls down hill, and it is on my desk, what can I do for you?” The result was a very professional individual who worked with me on the case and helped resolve it!

Years ago, on collection cases and dealing with Field Revenue Officers, a Manager advised me (along these words) “ … when you write these faxes to the Commissioner, this results in our having conference calls lasting many hours between the east coast and the west coast…” . Typically those cases had involved abusive collection matters and resulting lengthy faxes by legal counsel with support and argument. But, this actually allowed log jams to be cleared and move forward. This was because someone at the “top”, with more “in the trenches” experience and knowledge, could see the larger picture and cut to the chase. But, today, the IRS publishes information about your “bill of rights”; however, as the Taxpayer Advocate reports, the actions by the IRS violate your rights.

In the arena, the Office of the Commissioner remains “missing in action”, as it has for years. The Mission of the IRS is to provide “top quality service”, but taxpayer’s and representatives are left to deal with an institution whose training budget has been reduced by nearly 75% since FYE 2009. Moreover, IRS employees receive training in the form of “virtual training”. The shift has been away from in-person, face-to-face training.

As stated by the Taxpayer Advocate, “The downstream consequences to the IRS and taxpayers, including rework, misleading or incomplete advice, improper
compliance actions, and distrust in the IRS serve to further degrade the relationship between the IRS and taxpayers and violate the taxpayer rights to be informed, to quality service, and to a fair and just tax system.”

A common concern, of taxpayers and practitioners alike, is that they are not receiving accurate advice in order to resolve their issues when they contact the IRS. One consequence to an “out of control” IRS Collection situation is that you may have to file for a Taxpayer Assistance Order (through the Taxpayer Advocate). However, this can serve to reward the IRS for its abusive conduct, by extending the statute of limitations for collection on the matter you are seeking to resolve. Thus, with one hand, you are trying to restrain the attack dog, while at the same time enticing him with a juicy, bloody bone in the other.

Do you ever call the IRS and feel you are speaking to a robot? Well, the IRS employee may merely be in fact reading from a script! To compound the situation, you will find that if you disagree with the scripted text that the IRS employee is robotically reading from, he or she may “resolve” the issue by hanging up on you!

On the other hand, you may have spent time on the phone with IRS/ACS and faxed in financial information. Then during your next follow up call you find out that the prior IRS employee didn’t enter the information into the computer at all, or entered erroneous information. Sometimes you find out that the IRS/ACS employee actually tossed in the trash the documentation provided. Another situation is that the subsequent IRS/ACS employee reverses the IRS position on a matter previously already worked out by the prior IRS/ACS employee. It would appear that resolution of calls and “taxpayer service” is not the actual objective.

Request a Manager call back? What a joke! You end up with a low level call back (if you even get one at all), with a big Rubber Stamp on it. If a voice message is left for you, no direct manager telephone number is provided – you are to call the 800 number and start over. At times, the purported manager leaves a message but doesn’t even mention the case name. The system is not designed to resolve matters!

With new leadership, it is recommended that the Office of the IRS Commissioner be made available and be proactive in working with the taxpayers the IRS is to serve. In the past, procedures were in place that allowed interface with tax practitioners. It facilitated case resolution. A new IRS Commissioner is going to be appointed. Now is the time to correct the business management model for the Office of the Commissioner.

Offer in Compromise Program partial payment requirement - time to repeal it

The Offer in Compromise partial payment requirement is hurting taxpayers who want a fresh start. An Offer in Compromise benefits the government by collecting money it would not otherwise collect. An accepted Offer in Compromise concurrently provides the taxpayer a fresh start. A condition to the Offer in Compromise is that the taxpayer must also file and pay their taxes for five years after an offer is accepted.  However, taxpayer participation in the offer program is being reduced because of the Offer in Compromise partial payment requirement. Waivers can be obtained for the Offer in Compromise partial payment requirement, but only in limited situations.

A a current impediment to the offer in compromise program is the requirement that taxpayers who would like to consider a “lump sum” offer (payable in five or fewer installments), must include a non refundable partial payment of 20 percent of the amount of the offer. For “periodic payment” offers (an offer payable in six or more installments), a first proposed installment is required with the application, and continued monthly payments are to be made while the IRS is considering the proposal. Additionally, the IRS requires that a user fee be paid. The partial payment requirement and user fee can be waived for taxpayers with low incomes (less than 250 percent of the Federal poverty level).

The Treasury Department (report in 2017) has estimated that repealing the requirement of the Offer in Compromise partial payment would have a positive revenue impact since it may be substantially reducing access to the offer program. This is further supported by 2005 Treasury Inspector General for Tax Administration report finding that when the IRS first imposed a $150.00 Offer in compromise fee, offer submissions declined by more than 20 percent among taxpayers at every income level. Accordingly, the partial payment requirement is likely causing a decrease in collections by the government and increasing the costs of collection.

The Taxpayer Advocate has recommended that the Internal Revenue Code be amended to remove the requirement that taxpayers include a partial payment with “lump-sum” and “periodic payment” offers. [See National Taxpayer Advocate PURPLE BOOK, December, 2017].

When you need help for your Offer in Compromise, call 1-866-482-9767

IRS Urges Travelers Requiring Passports to Pay Their Back Taxes or Enter into Payment Agreements; People Owing $51,000 or More Covered

WASHINGTON ─ The Internal Revenue Service today strongly encouraged taxpayers who are seriously behind on their taxes to pay what they owe or enter into a payment agreement with the IRS to avoid putting their passports in jeopardy.

This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” These new procedures implement provisions of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015. The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt. See Notice 2018-1. The FAST Act also requires the State Department to deny their passport application or deny renewal of their passport. In some cases, the State Department may revoke their passport.

Taxpayers affected by this law are those with a seriously delinquent tax debt. A taxpayer with a seriously delinquent tax debt is generally someone who owes the IRS more than $51,000 in back taxes, penalties and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired or the IRS has issued a levy.

There are several ways taxpayers can avoid having the IRS notify the State Department of their seriously delinquent tax debt. They include the following:

• Paying the tax debt in full
• Paying the tax debt timely under an approved installment agreement,
• Paying the tax debt timely under an accepted offer in compromise,
• Paying the tax debt timely under the terms of a settlement agreement with the Department of Justice,
• Having requested or have a pending collection due process appeal with a levy, or
• Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief.

A passport won’t be at risk under this program for any taxpayer:

• Who is in bankruptcy
• Who is identified by the IRS as a victim of tax-related identity theft
• Whose account the IRS has determined is currently not collectible due to hardship
• Who is located within a federally declared disaster area
• Who has a request pending with the IRS for an installment agreement
• Who has a pending offer in compromise with the IRS
• Who has an IRS accepted adjustment that will satisfy the debt in full…

If you need assistance with your tax problems, please call 1-866-482-9767. The consultation is free.
Please visit my web sites:

Right to Tax Representation – a “Right” being gutted

You have a right to representation when dealing with the IRS. But, the IRS is now demanding that tax practitioners provide their social security number and date of birth when contacting the IRS concerning a client. The Internal Revenue Manual (on IRS website) has not yet been updated as of January 11, 2018. This “requirement” is just now being imposed.  This new mandate will have a chilling effect on your right to representation when dealing with the IRS.

This new mandate was required by the IRS even in a situation where counsel had recently spoken to the IRS (without such requirement); faxed financial statement information and supporting documentation, discussed the financial information with two (2) ACS employees, faxed the power of attorney, and provided the routine CAF number together with taxpayer’s address and other information requested. Thus, the practitioner could answer any factual question presented in the volume of financial information just previously provided. However, in the cited case, during the requested “Manager” call back, legal counsel questioned the need to provide the social security number / DOB, as this has never been requested before. The IRS “Manager” hung up! End of discussion. Now call ACS again and wait on hold.

The abusive tactics by the IRS (historical and current) is well documented. It is clear that this new “requirement” will have a National Chilling Effect on a taxpayer’s right to representation when dealing with the IRS, and  your  chosen representatives ability or desire to aggressively represent you. The ruthless and many times illegal actions of IRS Collections personnel are well documented.

Even the Office of the Director of Collections was not aware of this new “requirement”, and was surprised, appeared shocked and responded “what?” when the procedure was explained.

Moreover, the procedure is not needed. This is overkill. Moreover, it will be used for illegal and wrongful purposes by the IRS and whoever else they release the information to (either intentionally or through IRS incompetence).  Unless the IRS is reigned in,  this will become another another IRS abuse scandal. You will  read about the chilling and negative impacts upon your right to representation when dealing with the IRS.

Reflect on some case examples:

* A case wherein multiple IRS collection managers lied during case representation. It was not until the case reached the Head of the IRS National Office that tax counsel was able to cut through the IRS Managers lying and targeting of the taxpayer.

* The IRS previously released e-mail contact information of tax representatives on the internet. Tax professionals had argued against such, but the IRS did it anyway. The result, tax representatives were then targeted by perpetrators of ID theft. The IRS caused the problem.

* The documented illegal targeting done by the IRS (Lois Lerner). “Former IRS tax-exempt chief Lois Lerner has refused to testify about targeting conservative groups / A formal apology and reported $3.5 million settlement by the IRS with tea party and other conservative organizations the federal agency targeted during the 2012 election may not be the end of the story.”(WND). “Lerner / IRS deliberately targeted political opponents … FBI, Justice Dept. Collaborated with IRS to prosecute groups illegally …” (WND)

* Tax Court case involving taxes and penalties in excess of $28,500.00. The case was successfully brought to resolution with zero owing by the taxpayer. Yet, the taxpayer advised that the IRS has audited her every year since.

* In a collection case the IRS Field Revenue Officers seized random books from a professional out of the library (essential for production of income). They laughed about how his books were now worthless to him and he couldn’t work. The seizure didn’t result in any revenue to the government.

* ACS collection case wherein the IRS was refusing to allow legal fees as an allowable cash flow item for representation before the IRS.

* Just within this last week, ACS employee who advised legal counsel he was like a “2 year old child” because legal counsel was disagreeing with the ACS employee and wouldn’t agree to the ACS employee disregarding the taxpayer’s particular facts and circumstances (which is required under the law).

* The TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION issued its July, 2017 report findings: including IRS rehiring of former employees previously terminated from the IRS … while under investigation for a substantiated conduct or performance issue. … separated while under investigation for unauthorized accesses to taxpayer information; … separated while under investigation for absences and leave, workplace disruption, or failure to follow instructions. This includes positions with access to sensitive taxpayer information, such as contact representatives….” A Table of Examples of Significant Prior IRS Conduct Issues for Rehired Former Employees shows multiple categories, including the rehiring of former IRS employees who had Falsified Employment Forms, Official Documents, or Unofficial Documents. Two rehired employees had repetitively falsified employment forms by omitting prior convictions or terminations. One rehired employee had several misdemeanors for theft and a felony for possession of a forgery device, and another rehired employee had threatened his or her co-workers.

This new mandate is NOT needed and should be stricken.

Your right to representation when dealing with the IRS is threatened. The legislative history of the Taxpayer Bill of Rights is full of documented abuses. Human nature hasn’t changed. IRS employees will seek revenge. This will be a means to accomplish such vendetta and revenge more “discreetly” (whatever rationale is provided).

I have advised the National Taxpayer Rights Advocate of this “new” collection procedure and its direct chilling and harmful impact on taxpayer’s rights. It has been requested that the Taxpayer Advocate issue an immediate order prohibiting this provision from being instituted.

Posted: 20180112

Trust Fund Penalty - Do you really owe it? Erroneous liability

Are you actually liable for the Trust Fund Penalty Assessment?  Is the IRS billing you for a liability which you shouldn’t be paying? Has a Tax Lien been filed against you for a tax bill you shouldn’t owe?

The Taxpayer Advocate Service has posted case results in which a widow’s social security payments were being levied for employment taxes owed by her deceased husband’s business, which had closed.  The Trust Fund Penalty assessment had erroneously been made against the widow.

The business was a Corporation and the deceased husband’s accountant had told the widow to pay the outstanding payroll taxes. She had sold her home and paid as much as she could. She kept paying until she had sold her assets, didn’t have anything else to sell, and no money to pay with. Then the IRS levied her Social Security Payments, causing undue hardship.

The accountant was wrong! The surviving spouse was not a Responsible Person. She was not liable! The levy was released. It is not known whether the Taxpayer Advocate Service, inter-alia, filed claims for refund and sought abatement of the erroneous assessment (which is beyond merely obtaining a stay based on Currently Not Collectible). Such would have been recommended by me.

If you have a tax problem, I can be reached at 1-866-482-9767. The consultation is free.

Owe Back Taxes? No retirement savings for you.

The IRS Allowable Living Expense standards do not provide for a minimal retirement savings allowance in computing a taxpayer’s ability to pay. However, retirement savings are in actuality necessary for maintaining the health and welfare of today’s families. The IRS position is that “discretionary retirement savings” are not a necessary current living expenses while the taxpayer is repaying past due taxes. Instead, the IRS views such a provision as an amount which can be paid to them. Of course, for example, if you work for a State or a City which “requires” retirement savings, then such is “allowable”. This IRS “double speak” is absurd.

The Taxpayer Advocate in its Fiscal Year 2018 Objectives Report to Congress has clearly stated that the current Allowable Living standards are not based upon “an amount of money that allows for a basic standard of living”. Contrary to the IRS position, providing for retirement is necessary for a family’s health and welfare. The Taxpayer Advocate has advised in its Objectives Report that it will be issuing a Taxpayer Advocacy Directive ordering the IRS to expand the categories available in the Allowable Living Expenses. Hopefully, this will include minimal retirement savings.

Your basic standard of living and determining “ability to pay”. Is the IRS not following the law?

When a taxpayer owes back taxes, a financial analysis is done. Question: what expenses are you “allowed” to claim? Despite the IRS publications about “taxpayer rights”, the reality is that in many cases, such is merely “for publication”. The IRS is not actually respecting your “rights”.

The Internal Revenue Code mandates that the IRS national and local allowances for taxpayer’s living expenses are to provide for an adequate means to provide for basic living expenses. These “allowances” play a major role in collection cases (for example, Offers in Compromise, installment agreements, undue hardship, etc… ).

The problem is that the IRS computational basis for its allowances is what people spend to live, not what goods or services actually cost to live. Moreover, the IRS excludes some essential expenses from its category of “necessary” (thus the IRS prevents you from claiming them).

As stated by the Taxpayer Advocate – “By focusing on what expenses are allowable instead of adequate, the IRS has exercised its discretion in a way that does not meet congressional intent, since “allowable” is not synonymous with “adequate” or “basic”. Instead, the IRS should adopt standards that allow for a sufficient or adequate standard of living”. [See Taxpayer Advocate Service – Fiscal Year 2018 Objectives Report to Congress – Volume One – Area of Focus #8].

The Taxpayer Advocate concluded in its report that the current IRS allowable expense standard “is not based on an amount of money that allows for a basic standard of living. It also does not take into account all expenses that are necessary for a basic standard of living today”. [See Taxpayer Advocate Service – Fiscal Year 2018 Objectives Report to Congress – Volume One – Area of Focus #8].

When you need assistance with an IRS problem, please call me. The consultation is free. My toll free number is 1-866-482-9767. Visit me on the web at: