Procedural Issues
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Procedural Considerations on Collection (Liens) – Part One: Authority and Limits on Assessment Imposition of Tax Lien

The flip side to the assessment coin is the IRS’s process of collection.  Collection procedures are really where the rubber meets the road for the IRS, which is charged with collecting the taxes imposed by the Code.[1] The IRS has two basic mechanisms for collecting an unpaid tax liability.  The first, which this article goes into in some detail, is the federal tax lien.  If the tax lien does not get the taxpayer’s attention, and the IRS must kick its enforced collections action up a notch, then the IRS may levy or distrain the taxpayer’s property, which is discussed at length in this article. In this first article in our series on Federal tax liens, we discuss the IRS's authority, and limits thereto, with regard to imposing and enforcing liens against taxpayers.  In the second article in this series on liens, we’ll discuss the procedure and effect of filing a…

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April 29, 2021
Procedural Issues
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Procedural Considerations on Collection (Assessment) – Part Three: Termination and Jeopardy Assessments

In the first article in this series about collection and assessment, we explored the basics of assessment.  In the second article, we examined the nuances of deficiencies.  In this third article, we examine termination and jeopardy assessments. Termination Assessments If the IRS finds that a taxpayer aims to quickly do any act tending to prejudice or to render wholly or partially ineffectual proceedings to collect the income tax for the current or the immediately preceding taxable year, unless such proceeding be brought without delay, the IRS may immediately make a determination of tax (for the current taxable year or for the preceding taxable year, or both).  Notwithstanding any other provision of law, such tax (together with all interest, additional amounts, and additions to the tax provided by law) will be immediately assessed and become due and payable and will issue a notice of such determination and assessment, together with a…

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April 29, 2021
Procedural Issues
Tax Articles / Procedural Issues

Procedural Considerations on Collection (Assessment) – Part Two: Authority and Limits on Assessment

In the first article in this series about the IRS's ability to assess tax and additions thereto, we explored the basics of assessment.  In this second article, we’ll examine deficiencies.  In the third article, we’ll examine termination and jeopardy assessments. Deficiencies, Generally For purposes of income, estate, gift, and excise taxes, a deficiency is the amount by which the tax imposed by the Code exceeds the amount of tax shown on the taxpayer’s return, plus any amounts previously assessed as a deficiency less any abatement, credit, refund, or other repayment due to the taxpayer.[1] Statutory Notices of Deficiency If the IRS determines that there is a deficiency with respect to income, gift, estate, or excise taxes, the IRS may send statutory notice of deficiency (SNOD) to the taxpayer by certified mail or registered mail.[2] The mailing of the SNOD “shall be sufficient” if it is mailed to the taxpayer and…

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April 29, 2021
Procedural Issues
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Procedural Considerations on Collection (Assessment) – Part One: Authority and Limits on Assessment

Assessment and collection of taxes are the IRS’s bread and butter, and arguably the very reason that the IRS exists at all.  Consequently, it is no surprise that two whole chapters of the Code are dedicated to assessment and collection.  In this article we will examine the statutes of limitation for assessments, as well as some of the idiosyncrasies of the assessment regime.  In two separate series of articles, we will delve into the IRS’s two collection mechanisms: liens and levies. In this first article, we’ll explore the basics of assessment.  In the second article, we’ll examine deficiencies.  In the third article, we’ll examine termination and jeopardy assessments. Authority and Edict The IRS has the authority to make assessment of all taxes (including interest, additional amounts, additions to tax, and assessable penalties) imposed by the Code.[1] Not only does the IRS have the authority to assess taxes, but the IRS…

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April 29, 2021
Income Tax Issues
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Filing Joint Returns Under IRC § 6013 – Consequences and Benefits

IRC § 6013 permits the filing of joint returns by spouses. It should be noted that the Code has not adapted to the times, and it still lists “husbands and wives” as the only persons who may make a single return jointly. For purposes of equality and inclusion, and to stick it to the patriarchy, I will use the term spouses. The most interesting aspect of IRC § 6013 is the ability for a delinquent filing spouse to join a spouse who filed timely and to avoid late filing penalties.  It’s a nifty little party trick, which I will discuss at greater length below. At the end of the day, IRC § 6013 is far more complicated that meets the eye. Fear not, though—by the end of this article, I’ll be an expert on the section, and hopefully you’ll get something out of it, too. IRC § 6013(a) states that…

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April 29, 2021
Procedural Issues
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The Streamlined Filing Compliance Procedures

In an increasingly common occurrence, a client calls in somewhat of a tizzy over foreign information returns, which, apparently, she was “required” to file for the past few years. She’s gone to three different CPAs, only the last one of which even asked her whether she had foreign assets or interests. Her new CPA, one of the good ones, inquired about any foreign relationships that she might have, and she disclosed a Swiss bank account, a Nevis trust, and a 50% interest in a Guatemalan corporation. After assuring her that she was not going to jail, unless she actively and willfully attempted to conceal her foreign interests and assets, and telling her to breathe, you explain that there are three different procedures available to her to come into compliance with her foreign information return reporting requirements. She assures you that had she known that she was required to report them,…

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April 29, 2021
Procedural Issues
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Procedures for Signing and Filing Returns

So, you have to file a tax return. Congratulations. Throw on your grown-up pants, and let’s look at when returns are due, signing of the returns, extensions of time for filing returns, and where to file the returns – all of which are contained in Subchapter A of the Code. If you need a refresher on what makes a return satisfactory to the IRS, check out the article “What is a Return, and When is it good Enough?”  If you are wondering about joint income tax returns, pop on over to the article “Filing Joint Returns under IRC § 6013.” Defining “Filing” (Because the IRS Didn’t) Penalties,[1] refund claims,[2] and statutes of limitation on assessment and collection[3] all depend on when a tax return is “filed.” For such an important term, you would assume—and justifiably so—that the Code and/or Treasury Regulations provides a comprehensive definition of the word, extricating every…

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April 29, 2021