IRS Installment Agreement Calculation Counts Spendthrift Trust Distributions

The IRS generally cannot reach funds in a spendthrift trust to satisfy the trust beneficiary’s unpaid tax debts.  But can the IRS factor in trust distributions in calculating the how much the taxpayer can pay under an installment agreement?  The recent Melasky v. Commissioner, 151 TC 9 (2018), suggests that the IRS can do this…Continue readingIRS Installment Agreement Calculation Counts Spendthrift Trust Distributions

Family Member’s Mortgage Filing May Trump IRS Lien

If a child owes unpaid taxes to the IRS, can the parent file a lien against the child’s property to prevent the IRS from levying on the property?  The court considered this in United States v. Allahyari, No. C17-668 TSZ (W.D. Wash. 2018). The Facts & Procedural History Upon graduating from law school in the early…Continue readingFamily Member’s Mortgage Filing May Trump IRS Lien

The Last Filed Rule Overruled? IRS Collections Now Uncertain

Taxpayers will often file tax returns that do not report all of their allowable deductions and credits, with the intent of going back and filing amended returns once they are able to determine the correct deductions and credits.  Can the IRS base its collection analysis on the originally-filed but incorrect tax returns?  The court recently…Continue readingThe Last Filed Rule Overruled? IRS Collections Now Uncertain

Can the IRS Take Property Purchased in a Business Name?

If you owe the IRS back taxes but want to buy real estate or some other type of property, can you form a legal entity and use it to acquire property and thereby put the property is beyond the IRS’s reach? The court recently addressed this in United States v. Jones, No. 8:17-cv-2389-T-24 AEP (M.D.…Continue readingCan the IRS Take Property Purchased in a Business Name?

Can the IRS Collect from a Single-Member LLC?

When trying to settle a tax debt with the IRS or manage the collection process, there are often questions as to whether the IRS can collect from a legal entity owned by the taxpayer. This often comes up in the context of a limited liability company that has one owner. You may be surprised to…Continue readingCan the IRS Collect from a Single-Member LLC?

Congress Provides Significant Relief for Back Taxes

There are winners and losers when it comes to the recent tax changes proposed by Congress. As it turns out, those who owe back taxes to the IRS may be in the winner category. The proposed changes will significantly increase the amount of income that is beyond the IRS’s reach. If the legislation is passed…Continue readingCongress Provides Significant Relief for Back Taxes

Common IRS Collection Notices and What they Mean

Did you receive an IRS Collection Notices in the mail? If so, you either (1) opened it immediately as you had to know what the problem was or (2) refused to open it as you were hoping that the problem would go away on its own. Once you finally read the IRS Collection Notice, you…Continue readingCommon IRS Collection Notices and What they Mean

Can the IRS Contact Third Parties Without My Permission?

The IRS gathers quite a bit of information about taxpayers. This includes those who have unpaid tax debts and those who the IRS suspects may owe additional taxes. The IRS has the ability to contact third parties in gathering this information. There are rules that must be followed in doing so. When do the Rules…Continue readingCan the IRS Contact Third Parties Without My Permission?

Eight Things You Need to Know About the IRS Offer in Compromise Program

An offer in compromise is a legal agreement between you and the IRS that settles your tax debt for less than the full amount you owe. It provides you with a path for paying off your tax debt and getting a “fresh start.” If you have unpaid tax debts, here are eight things you need…Continue readingEight Things You Need to Know About the IRS Offer in Compromise Program

Rules to Know When the IRS Seizes Your Property

The IRS has the authority to take your funds or property if you do not pay your taxes. This is commonly referred to as a “seizure.” Our Tax Code and the IRS’s Internal Revenue Manual provide specific rules and procedures the IRS has to follow to seize your property. Here are the four primary rules…Continue readingRules to Know When the IRS Seizes Your Property