HOW THE IRS WILL PROCESS YOUR CASE.
IRS is looking to close your case off of their CADE Computer system. The CADE computer system is their account receivables systems.
IRS will require a fully documented form 433-F if the case is in ASC or a 433-A if the case is in the field with an assigned Revenue Officer. After the IRS completes the review of the financial statement and makes sure all tax returns ( unfiled or back tax returns ) are filed, the IRS will generally close your case or settle in the following manner:
IRS CASE CLOSURES OR TAX SETTLEMENT AGREEMENTS CAN BE IN DIFFERENT FORMS:
- Hardship Settlements. Cases usually go into a 3 year suspended status because of an inability to pay. This is also called currently noncollectable. Your case will go into a hardship status because you do not have the income coming in to meet your current expenses. The IRS will use the National Standards Program to assess hardship.
- Payment Agreements. Cases can be closed with agreed upon monthly installment payments to the IRS. We will review the different programs the IRS uses for the lowest possible amount required.
- Offer in Compromise. There are three types of OICs:
THE IRS MAY ACCEPT AN OFFER IN COMPROMISE BASED ON THREE GROUNDS:
- Doubt as to Collectibility – Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection.
- Doubt as to Liability – A legitimate doubt exists that the assessed tax liability is correct. Possible reasons to submit a doubt as to liability offer include:
- the examiner made a mistake interpreting the law,
- the examiner failed to consider the taxpayer’s evidence or
- the taxpayer has new evidence.
- Effective Tax Administration/ Exceptional Circumstances. – There is no doubt that the tax is correct and there is potential to collect the full amount of the tax owed, but an exceptional circumstance exists that would allow the IRS to consider an OIC. To be eligible for compromise on this basis, a taxpayer must demonstrate that the collection of the tax would create an economic hardship or would be unfair and inequitable.
Call us for a no cost professional tax consult and speak directly to tax attorneys, CPA’s or Former IRS agents.
We can file all your back or unfiled tax returns even if your tax records are lost.
THE TRUST FUND RECOVERY APPEAL
The IRS will send the taxpayers a notice that they have been “found liable” for the trust fund recovery penalty. Instructions will be found in the letter in case you disagree with the findings. There is a certain format to be followed and certain criteria within that appeal, of facts it must contain. It must be received by the IRS within the allotted period of time on the letter.