A Tax Consultant for All Seasons

That could means several things. One possibility is that your liability has been unpaid for so long the IRS has assigned one specialist to handle collecting your liability. This person has numerous methods at his or her disposal, to determine what your ability to pay is. Another possibility is that the amount of your liability is so high they assigned a specialist.

This person  can not only levy your wages and your checking account, but pull credit reports, search court records, summons your bank for your bank statements, even interview people you know to find out how you live. The purpose of this research is to determine exactly what financial situation you are in and how much you can pay.

They first want to see if you can full pay your liability by borrowing against equity in your home, 401k or credit cards. If those are not an option or will not full pay your liability, they will look at your ability to make monthly payments–based on what they determine is and adequate standard of living.  This is not necessarily what you are actually spending. So those daily visits to Starbucks and frequent decisions to dine out may be curtailed.  In some situations they can require that you sell your home and or cars, if they are well above the standards and your liability is high.

The moral of this story is to not let your tax liability get out of hand. Contact the IRS or an Enrolled Agent to help you find the best resolution possible, before you are assigned to a Revenue Officer.

This entry was posted on Thursday, May 29th, 2008 at 19:26 and is filed under Small Business, Individuals, IRS Help. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.