The Law Office of
Elizabeth D. Atkinson, LLC




Tax Debt Information
The following are commonly asked questions about the IRS tax collection process. For more detailed information, please contact Elizabeth Atkinson, Esq. at the number below or via the contact page on this site.



What is a Revenue Officer and why are they contacting me?

What does it mean to be Current and Compliant?

Can I get an Abatement of Penalties?


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Do I have rights as a taxpayer?

YES!!!!! Unfortunately, most taxpayers don't know they have rights or don't know what their rights are. The IRS is required to follow rules when attempting to collect tax from you and they can't abuse your rights as a taxpayer. It is very important to speak with a knowledgeable attorney when going against the IRS because the attorney will know your rights and be able to protect them during the resolution process. If you are having trouble dealing with the IRS on a tax issue, please call my office at (303) 834-7791. I will be glad to assist you and guide you through this tedious process.


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What are my options for dealing with my tax debt?

There are several resolution options available to taxpayers. All depend on factors like your ability to pay back your taxes, the amount of tax owed, if you have filed all of your returns and the amount of equity you may have in your property. It is also possible to settle the debt completely, depending on the taxpayer's financial situation. Now adays the IRS can accept payments with Checks, Money Orders and more recently they have added the ability to process payments with a Credit Card Processor.

Most of the time, the IRS will set up a payment plan with taxpayers, but they will do so at far higher payments than the taxpayer is able to pay. They often take financial information over the phone that is incomplete or inaccurate. You do NOT want to give the IRS your banking information over the phone without representation.

Regardless of the resolution sought, it is extremely important to talk to a knowledgeable person about your options. Going against the IRS alone can be a big mistake and can also cost far more in the long run than the help to resolve the issue once and for all. There are many 'tax firms' out there that promise to settle your debt for 'pennies on the dollar', but you should know that anyone who promises a guaranteed outcome is lying to you and you should RUN the other way. There are no guarantees with the IRS.


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What is a Revenue Officer and why are they contacting me?

A Revenue Officer is basically a tax collector that works for the IRS to collect the tax owed by a particular taxpayer. They are usually assigned to a taxpayer's account once the debt goes above $25,000. If a Revenue Officer is not assigned to a case, the account is likely being handled by ACS or 'Automatic Collection System'. They can be far more tedious to work with, especially if you are being levied or have a wage garnishment in place.

If you are contacted by a Revenue Officer, it is strongly advised that you seek competent assistance and have your Power of Attorney filed so that your representative can begin negotiating on your behalf right away. It is best not to ignore a Revenue Officer if they contact you, but you are better off having a representative respond in certain circumstances.


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What does it mean to be Current and Compliant?

When you are trying to resolve a tax liability with the IRS, it is imperative that you be 'current and compliant'. This means that you are current with all required tax payments and that you are compliant with all required return filings. The IRS wants to see that, although you may have had some issues with your taxes, you are now trying to get back in line and follow their rules.

They are not willing to negotiate a resolution or a settlement if you are not doing your part to get back on track. Worse, if you do resolve the liability, some resolutions will default if you do not stay current and compliant. That means the IRS will continue to take your money, but they will also be able to levy or garnish wages again.


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Can I get an Abatement of Penalties?

In short: sometimes. The IRS will abate penalties if you can show good cause for the non payment or late payment of taxes. It is important to give a full account of the circumstances surrounding the delinquent taxes and how you took steps to remedy the situation. Most of the time, taxpayers who can show that they suffered circumstances beyond their control and took steps to correct the problem will receive an abatement of penalties and the interest associated with those penalties. But again, please do not believe anyone who guarantees an abatement. They are granted all the time, but should never be a guaranteed option by anyone.


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How do I stop the IRS from levying my bank account?

It depends on several factors. You usually must show that the levy is creating an undue financial hardship by preventing you from paying normal living expenses. This will require proof of financial hardship shown on a financial statement.

If you are working with a Revenue Officer, and have hired assistance from an attorney, usually the attorney will have contacted the RO and will have negotiated a hold on enforced collection action.

There are other ways to get a lien released, but they require the help of a professional. If you need help getting a lien released or dealing with aggressive collection on the part of the IRS, please call me at (303) 834-7791.


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What is Trust Fund tax?

All employers are required to withhold some amount of their employees' pay to pay for the employee's portion of medicare and social security taxes. The amount withheld is considered held in trust by the employer to pay to the IRS. Sometimes employers fail to use these funds to pay the required tax and, as a result, the owners and officers of a corporation can be held personally liable for payment of these 'trust fund taxes' (also know as the Trust Fund Recovery Penalty). Even if the business shuts down or ceases to owe tax, the trust fund taxes will remain enforceable against the owners/ officers.


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Why do I have a tax lien on my credit report?

When a taxpayer owes money to the IRS, the IRS automatically has a lien against all property and after acquired property of the taxpayer. They do not always file this lien, but it exists against all property of the taxpayer. This serves to secure the government's interest until the debt is paid or resolved through a company or credit repair provider like Vitesse Financial.

A tax lien can make the sale of property very tricky, but the IRS will sometimes allow for the subordination of their lien to a secondary lien holder in the event of a sale, as long as the sale is in the best interest of the IRS.

There are several other ways to deal with a tax lien, depending on a taxpayer's individual circumstances. If you have an issue with a tax lien, please call my office at (303) 834-7791 for an appointment.


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What is an Offer in Compromise?

An Offer in Compromise (OIC) is a request to settle your entire liability for a fixed amount. It is entirely up to the discretion of the IRS, but when granted, can settle you entire tax liability for a very low amount.

Filing an OIC involves a great deal of financial documentation. They will scrutinize every detail, and often will reject the initial request as a matter of form. Don't worry, that's not the end of the process. If you receive a rejection, you have appeal rights. Most Offers go to appeals and are accepted at that point. If you are being entirely honest and your financial information shows that you should qualify, there shouldn't be too much difficulty getting an OIC through. You should know, however, that as with most things, there are no guarantees. Do not trust anyone who guarantees you they will settle your debt for 'pennies on the dollar'. They might, but then again, they might not.

Offers in Compromise are complicated and require the assistance of a knowledgeable tax professional. You stand a far greater chance of having your offer accepted if you have assistance from someone who understands the rules and can help you navigate the system.


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