The four most important things to remember if you owe the IRS money

Sara F Gonzalez

For many Charlotte small company owners and families, it may appear that the government is simply tossing money around without paying attention to how it is spent or collecting what is owed.

After all, the IRS still has a backlog of letters to send out, which is why they didn't start accepting tax returns until February 12 this year.

Despite the fact that many of these backlogged warnings include incorrect information, they continue to cause widespread alarm among individuals who receive them.

If you've gotten an IRS notice, you can obtain help here:

However, you would be mistaken if you thought that simply because there is an administrative delay, the IRS will not look for ways to recoup lost money.

However, the IRS's power is limited, and we can assist you in asserting your rights...

1) They have to “consider” paying off your debt.

(Section 7502 of the Internal Revenue Code):

We're discussing the Offer in Compromise (OIC), and they have the authority to settle for less than the whole sum owed. In truth, they must always pay attention to an offer.

But be cautious: not everyone is eligible for a compromise offer. When it comes to examining an offer in compromise, the IRS has very strict standards. The IRS will examine your household income, living expenditures, and asset values to see if they can collect the entire amount owed. In most circumstances, the IRS must be convinced that they will never be able to collect the full amount owed from you in order to accept a compromise. If this is the case, they can agree to a reduced settlement sum that represents what can be paid and retrieved.

This is usually a process that necessitates assistance.

2) Before levying your account, the IRS must notify you and provide you the opportunity to appeal.

(Codes 6330 and 6331(d) of the Internal Revenue Service):

Before the IRS can confiscate your property, they must send you a letter and give you 30 days' notice. A "Final Notice of Intent to Levy" is the name given to this letter. After receiving a Final Notice, you have 30 days to file an appeal to challenge the IRS levy, stop it from happening, have a hearing with an IRS appeals officer to find an alternative to levying, and, if all else fails, petition the US Tax Court for further review. This is known as a "collection due process appeal," and it puts all IRS enforcement on hold while you make your case.

3) The IRS can only levy or seize your property when it results in financial recovery

(Internal Revenue Code 6331(f) and 6331(j)(2)(c)):

This is referred to as the "no equity rule." To put it another way, the IRS can only seize your property if you pay them. If you had a $10,000 Camaro with a $10,000 loan on it, for example, an IRS seizure will only get your bank reimbursed on the loan. The IRS will be left with nothing because they have no equity in it. As a result, they are unable to seize it legally. The same can be said for your Charlotte home. The no-equity statute makes it illegal for the IRS to seize your property.

4) The IRS only has 10 years to collect your unpaid tax debt

(Internal Revenue Code 6502):

After the ten-year period has passed, the IRS is required by law to credit your account for the amount that cannot be recovered and reset your account balance to zero. The collection period begins when the IRS first records an amount due and concludes 10 years afterwards. The “IRS collection statute expiration date” marks the end of the process. By law, owing the IRS does not last indefinitely.

And, of course, with our help, it’s much, much less.

We’re in your corner.


Sara Gonzalez

Kohari & Gonzalez PLLC

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