Tax Resolution

The 10-Year Collection Statute – Why is it so Important?

February 8, 2023 | Carmel

In tax resolution cases, there are many strategies that come into play when formulating a plan to resolve a tax debt.  From allowable expenses, to equity in assets, and many other items, effectively solving a tax problem for a taxpayer has many angles.  One angle is using the “Collection Statute Expiration Date” or CSED to a taxpayer’s advantage.  The CSED is important because the amount of time remaining on the collection statute helps determine which solution the practitioner should select. What is the Collection Statute Expiration Date or CSED?  Once the IRS assesses tax on a taxpayer, the IRS has, by statute, 10 years from the date of assessment to collect the tax.  In most cases, after 10 years the tax debt becomes unenforceable and the IRS writes-off the debt on the taxpayer’s account.  This makes the CSED a very useful tool in planning a tax resolution case for a client. If … Continued

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What Does It Mean To Be “Currently-Not-Collectable”

February 1, 2023 | Business Tax Strategy

As with any tax resolution case, strategy plays an important part in resolving the tax debt.  There are many factors that go into devising a plan to get a taxpayer compliant.  Once such tool that can be very effective is for a taxpayer to be deemed “uncollectable” or “CNC (Currently Not Collectable – in IRS jargon)”. What does it mean to be deemed “uncollectable” by the IRS.  Taxpayers can be placed in CNC status if their equity in assets plus their income is not sufficient to cover IRS allowable expenses.  When a taxpayer is deemed uncollectable, the taxpayer’s tax accounts will be marked so that the IRS does not take any levy action against them.  Being deemed “uncollectable” does not resolve the tax issue but it does benefit the taxpayer in a couple of ways: The 10-year collection statute on assessed taxes continues to runThe IRS will not take collection action against the … Continued

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IRS Collections Process – What Is It?

January 25, 2023 | Accounting Services

 In any IRS Collection case, there are certain notices the IRS sends out at each stage of the process.  If a taxpayer doesn’t pay the tax in full when the tax return is filed, that taxpayer will receive a bill for the amount owed.  This starts the collection process, and it will continue until the tax liability is satisfied or the government is not longer able to collect the tax debt. So what are the notices the IRS must send out?  I’m glad you asked. CP501 NoticeThe first notice in the collection process is a CP501 Notice.  This is the friendliest notice from the IRS.  It will indicate the taxpayer has a balance due on one of his or her tax accounts.  Once a taxpayer has filed the tax return, the taxpayer has 10 days to pay the tax.  It not, then a CP501 Notice will automatically be generated and sent to … Continued

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