Does the IRS Really Use Private Collection Agencies?

To answer the question, yes. The Internal Revenue Service began using the services of private collection agencies (PCAs) several years ago. The IRS tasks the contracting PCAs to collect (or attempt to collect) inactive tax receivables from taxpayers. Inactive tax receivables do not cover all, or even most, tax debts. These receivables are tax debts that cannot be collected due to the IRS’s inability to find the Read More

When Can Taxpayers Rely on Professional Advice for IRS Penalty Abatement?

To begin to answer the question posed above, we must first clarify that taxpayers are typically presumed to own their own mistakes. That is especially true when taxpayers prepare their own tax returns, without the help of a CPA or other tax professional.  Let’s say you did hire an accountant to prepare your federal tax return. You’re under the impression that you provided truthful and comprehensive information. Read More

Important IRS Statutes of Limitations

For many people accused of wrongdoing, statutes of limitations are their saving grace. The highest stakes with respect to statutes of limitations involve criminal charges, but most civil actions also have limiting statutes.  A statute of limitations is the maximum amount of time allowed to start legal proceedings against a party accused of wrongdoing. The clock begins ticking on the statute of limitations Read More

How Do the Federal Sentencing Guidelines Come into Play in a Federal Criminal Case?

Despite the best efforts of the most skilled criminal defense attorney one can find, federal juries often return guilty verdicts. However, experienced legal counsel can still make a significant impact for defendants during the sentencing phase. One of the most important components of the sentencing phase in federal cases is the U.S. Federal Sentencing Guidelines. An important note before we explain more about the Read More

IRS Giving You Headaches?

A recent call to the IRS has ended in frustration for many taxpayers. The agency’s dwindling budget, compounded by the COVID-caused backlog of returns, has left few employees available to answer phone calls. Not being able to reach a human being causes significant anxiety for taxpayers whose finances are suffering due to a dispute (or even a simple misunderstanding) with the IRS.  Taxpayer Advocate Service Some Read More

What Makes a Valid Federal Search Warrant?

Executing search warrants—of someone’s house, car, or place of business—is a common way for police to gather evidence of an alleged crime. Staring down the business end of a search warrant is rattling and should be concerning. After all, who would want state or federal authorities walking through their home and searching every corner?  Adding to the perturbing situation is the tendency of federal agents to execute Read More

The Three Divisions of IRS Enforcement

When taxpayers hear “IRS,” they don’t think of the federal agency’s IT infrastructure, information services, and behind-the-scenes operations support. Taxpayers are primarily concerned with the IRS’ ability to collect taxes, audit their tax returns, and, in worst-case scenarios, investigate tax crimes.  The forward-facing component of the IRS is usually referred to as the enforcement division. There are numerous Read More

Audit Triggers From Schedule C Forms

The more complicated (for lack of a better term) your tax situation is, the more likely you are to be audited. For example, sole proprietors, who must fill out and submit Schedule C documents to the IRS, are more likely to be audited than someone who only has to worry about W-2s.  The Schedule C form is where sole proprietors list profit or loss from their business. A universal truth of audits is that the IRS is Read More

Who is Eligible for Innocent Spouse Relief?

Properly filing taxes can be a challenge even for seasoned financial professionals. This is especially true for business owners, those who have unusual deductions, or anyone filing joint tax returns. It is surprisingly easy for someone to do something incorrect—either accidentally or intentionally—to avoid paying taxes. In these circumstances, it is necessary to go back and pay the correct amount once the IRS Read More

Should You, or Should You Not, File an Amended Tax Return?

That seemingly simple question does not have a simple answer. First, we must make it clear that no U.S. taxpayer is required, by law, to file an amended tax return for the purpose of fixing an earlier mistake. The Internal Revenue Code, which is the set of domestic tax laws governing nearly all aspects of federal tax law, provides that taxpayers “should” file an amended return and pay any tax due if they notice an Read More