The McGuire Law Firm has experience in resolving all types of tax debts and tax issues. Below are specific resolution options and issues that may come into play in resolving your tax issues. Please contact a Denver tax attorney at The McGuire Law Firm to discuss your situation and see which resolutions are available to you.
Some taxpayers may be able to have their tax debt placed in a currently non-collectible (CNC) status, which can be quite beneficial to the taxpayer. While in CNC status the IRS does not actively collect on the liability and the collection statute continues to run. CNC status may be used by a taxpayer to acquire the necessary time to eventually satisfy the liability or later submit an offer in compromise based upon their financial circumstances. Generally, a taxpayer will stay in CNC status for 12-24 months at which time the IRS may request an updated financial statement and upon review the taxpayer may be able to stay in CNC status. It is possible that a taxpayer could stay in CNC status while the collection statute expires.
Collection Due Process Hearing
Under certain circumstances, a taxpayer may be able to file for a Collection Due Process (CDP) Hearing regarding one or multiple periods of tax liabilities. The CDP Hearing allows an appeals officer to review the due process received by the taxpayer regarding the issuance of any Federal Tax Lien or proposal to levy monies or seize assets in collection of the tax due. The appeals officer can also consider collection alternatives such as an offer in compromise or installment agreement. Under most circumstances filing a request for a CDP Hearing acts as a hold on enforcement collection and prevents the IRS from issuing bank levies, wage garnishments and/or the seizure of assets. Eventually, a hearing will be held with the appeals officer during which time proposals can be made to resolve the tax liability. A Denver tax attorney can file for your hearing request, and conduct your hearing with the IRS appeals office.
The Internal Revenue Service can assess multiple types of penalties to a taxpayer. For example, if you owe taxes and file your tax return after the deadline, you can be assessed the failure to file penalty, which accrues at 5% per month up to 25%. If a tax return is filed timely but tax is due, the IRS can assess the failure to pay penalty, which accrues at .5% per month up to 25%.
The good news is, these penalties can be abated (waived) when the taxpayer can establish reasonable cause (causation) for the issue that led to the assessment of the tax penalty. Our Denver tax attorneys can assess your tax penalties and assist you in filing a penalty abatement request with the Internal Revenue Service.
It is recommended that any taxpayer owing taxes to the IRS contact a tax attorney to discuss their options and rights as a taxpayer. Most attorneys will offer a free consultation.