While owing money to the IRS is not ideal, it is often manageable. One just needs a view of the longer time horizon. As it turns out, in many cases, the IRS never even bothers to attempt to collect unpaid taxes and/or it ends up only collecting a small amount. While there are a lot……
Tag: IRS Debts
Allocations After Innocent Spouse Relief Granted
When a married couple files a joint tax return, both spouses are jointly and severally liable for the full amount of tax owed. This means that the IRS can collect the entire tax liability from either spouse, regardless of who earned the income or claimed the deductions. However, in certain situations, a spouse may be……
Who Gets Paid First: the Family Member or the IRS?
When someone owes the IRS money, chances are good that they have other creditors who are also owed money. This raises questions as to who gets paid first–the third parties or the IRS. The answer is usually the IRS–if the IRS even bothers to attempt to collect. In many cases, the IRS does not ever……
IRS Can Force Business to Use Payroll Service, Court Rules
When a business fails to pay its payroll taxes, the consequences can be severe. The IRS has several collection tools at its disposal to collect unpaid payroll taxes. This includes liens, levies, and even criminal charges against the business owners. The IRS recently attempted to expand its collection powers to prevent future non-compliance. In United……
IRS Can Sidestep Taxpayers’ CDP Rights by Applying Overpayments
Imagine that Congress sets out a remedy to curb IRS abuses. And further consider that after the taxpayer pursues the remedy, the rules allow the IRS to simply sidestep the remedy. So the remedy is no remedy at all. That is what we have in the Zuck v. Commissioner, No. 25125-14L (U.S.T.C. Apr. 6, 2022)……
Resolving IRS Taxes: What is “Future Income”?
When it comes to tax rules and government administrative guidance, one may expect that the provisions are clear and can be easily applied. However, this is often not the case. Even detailed regulations with explanations may fail to provide readily discernible answers. Applying such rules to common situations can still lead to questionable or incorrect……
Transferring Property to a Spouse to Avoid IRS Collections
Imagine you live in a community property state, like Texas, and jointly own a home with your spouse. You owe back taxes to the IRS and want to protect your share of the home if the IRS tries to seize your assets. You divorce your spouse and transfer your interest in your home to your……
Court Rejects IRS Claim to Taxpayer’s Property
If a bank loans money to a business to buy equipment when the business owes back taxes, can the bank foreclose on and repossess the equipment? Does the bank or the IRS have a superior interest in the equipment? This gets into questions of state and federal law. Generally, state law defines property rights and……
Start a New Business to Avoid Old Taxes
Payroll taxes kill businesses. It is very easy to get behind, whether the business owner uses the funds to pay other expenses or due to a mistake. Once there is a payroll tax balance, it can be very difficult to catch up. The penalties and interest compound the problem. If you’re a business owner and……