Eta3 - Payments & Irs Collection Process

Front 1

When may the statue of limitations on collection activity be suspended

Back 1

While IRS or field office consider a request for an installment agreement, from the date taxpayer request a collection due process hearing, and while the taxpayer lives outside the United States. The collection activity will not be suspended for prison

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Separation of liability really does not apply to taxpayers who are

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Single and never married

Front 3

Complaint against the IRS should be submitted by the taxpayer to

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Taxpayer advocate service

Front 4

A taxpayer who wants to protest an IRS collection notice may

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complete form 12153, request for a collection due process CDP or equivalent hearing

Front 5

When is a collection due process, CDP available

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For levies and liens

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If a tp disagrees with the determination after a CDP hearing he can

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Petition the US Tax Court. The petition must be made within the time period specified in the appeal determination letter.

Front 7

What is exempt from IRS levy

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Child support and unemployment benefits and undelivered mail

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Is Social Security exempt from IRS levy

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No

Front 9

During the course of the installment agreement, penalties and interest will

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Continue to accrue

Front 10

A tp owing $10,000 or less in taxes will automatically be approved for

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An installment agreement

Front 11

How long does the IRS has following an assessment to begin proceedings to collect tax by levy

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10 years. The amount of time the suspension is in effect will be added to the time remaining in the 10 year period.

Front 12

What are things to remember about the statue of limitation and the IRS

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The statue of limitations on collection activity may be suspended in certain cases. IRS is required to notify the taxpayer that he may refuse to extend the statue of limitation. If taxpayer does not file income tax return, the statue of limitations does not expire.

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When a tax payer is declared currently not collectible, penalties and interest will

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Continue to accrue on taxpayer's unpaid tax liability

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If a taxpayer owes more than $25K, he may still qualify for installment agreement. However the te taxpayer will also need to

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Complete form 433 f, collection Information Statement

Front 15

irs may seize property without the normal waiting period if a jeopardy assessment has been made. The IRS may not seize property in what circumstances

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Pending installment agreement or appeal considering compromise offer, during a bankruptcy if liability is $5000 or less, and while innocents spouse claims are pending

Front 16

For a jointly file tax return selected for examination, must both spouses be present

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No just one.

Front 17

What is discriminate inventory function system, DIF

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A computer program which assigns a numeric score to each return after they have been processed

Front 18

During the examination process, the IRS may contact neighbors, banks, employers after giving notice to tp. The IRS does not have to give any notice if

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Pending criminal investigation, is it will jeopardize collection of tax liability, if reprisal may result

Front 19

When the IRS needs to examine the records of a partnership, when must it do it under TEFRA rules

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TEFRA applies to partnerships with more than 10 partners. Consequently special procedures must be conducted. Under TEFRA, the IRS will examine tax issue at the partnership level not the individual partnership return

Front 20

All examinations are automatically recorded by the IRS to

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Ensure compliance of regulation by all parties

Front 21

What is a revenue agent report

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A concluding report by a revenue agent that states the amount of adjustments to a taxpayer's return

Front 22

When are formed 941 tax return due

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the last day of the month following the calendar quarter end

Front 23

A request for a collection due process, CDP, hearing will temporarily

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Suspend the 10 year collection process. And will prohibit levy action in most cases

Front 24

When will the IRS release a lien

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When the tax that is fully paid, when payment of the debt guaranteed by a bond, when the statute period for collection has ended. A request for an offer in compromise will not release a tax lien.

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The IRS may accept an offer in compromise based on three grounds. What are they

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Doubt as to collectibility, doubt as to liability, and effective tax administration

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Can A IRS Collection Appeals Program decision be appealed to a court

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No. Once appeals makes a decision regarding the case, the decision is binding on both taxpayer and the IRS. This is main difference between CDP and CAP. However CAP is faster

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The 10-year collection period can be suspended in what case

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installment agreement or an offer in compromise a CDP hearing,
tp resides o/s United States,
Included in a bankruptcy

Front 28

What is an automatic stay

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A filing in bankruptcy court immediately stops all assessment and collection of tax.

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What income tax debt may be forgiven in bankruptcy

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Tax debt related to a return due 3 years before the taxpayer filed for bankruptcy, tax return must have been filed at least 2 years ago. Tax assessment must be at least 240 days old, taxpayer cannot be guilty of tax evasion, fraudulent or frivolous etc

Front 30

A tp who has received a collection notice has how many days to request a CDP, Collection Due Process, hearing

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30 days

Front 31

In what instances is the c a p, Collection Appeals Program available

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installment agreement, liens and levies

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What are some of the things you must do to have an installment agreement

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TP must fill out a collection information statement, and will be charge a user fee. TP must file all returns that are due to be eligible for an installment agreement

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When will the IRS abate penalties

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1. major disaster affecting a large number of TPs in a given area.(extensions of time to file or pay). 2. IRS error. 3. TP relied on advice of a tax advisor. This is generally limited to issues considered highly technical or complicated and can only relate to the accuracy-related penalties. 4. Reasonable cause (circumstances beyond control)

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When will the IRS abate interest

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1. Excessive or illegally assessed. 2. Erroneous refund. 3. Taxpayer was in a combat zone . 4.Delays caused by IRS employees. 5. Disaster. NO interest will be abated for reasonable cause.

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What is a managerial act

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In administrative act that occurs during the processing of ATP case involving temporary or permanent loss of records or the exercise of judgement or discretion relating to management of personnel

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What is a ministerial act

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A procedural or mechanical act that does not involve the exercise of judgement or discretion and that occurs during the processing of a rp case

Front 37

What must be taxpayer show when filing Form 1127 application for extension of time for payment of tax due to hardship

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Tp must show he will sustain a substantial financial loss if he pays on the due date . must detail assets liabilities income and expense for the past 3 months and provide a detailed explanation of undue hardship

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An offer in compromise may be submitted on three grounds one of which is effective tax administration, (exceptional circumstances) what is that

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The exceptional circumstances, effective tax administration, a TP must demonstrate that the collection of the tax would create economic hardship or would be unfair.

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What happens when a tp has a late payment on an installment agreement

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The late payment will generate a automatic 30 day notice