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Completing a return with the lowest legitimate tax liability is often just half the battle. Taxpayers often walk away with significant balances due to taxing agencies including the IRS and the New York State Department of Taxation and Finance. Helping individuals manage their tax liabilities to prevent potential liens, levies, and revocations of your passport have become an integral piece of many tax practices. There are both short-term (120 days or less) and long-term installment arrangements. Defaulting on either can have severe consequences. Understanding what payment amounts and payment terms the relevant taxing agency will accept beforehand is key. Taxpayers often need to modify an existing agreement to lower payment amounts or include an additional year.
Tax agencies also allow taxpayers to settle their tax liabilities for less than the tax, penalty, and interest owed using the offer in compromise (“OIC”) program. An OIC is detailed in a booklet provided by the IRS, Form 656. It explains steps for completing both Forms 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, and Form 433-B, Collection Information Statement for Businesses. Certain taxpayers will need to complete both.
Both installment plans and OICs require setup fees. OIC application fees may be waived for eligible taxpayers. Both have online options to assist applicants. The OIC has an online pre-qualifier, and certain installment agreements can be set up online. Tax practitioners must grasp the nuances of these applications and the likelihood of acceptance when working with taxpayers who have outstanding IRS debt.
Listen as our panel of tax experts provides insights into payment arrangements with the Internal Revenue Service and New York State, including tips for having the most favorable arrangement accepted.
Outline:
1. Owing tax liabilities to the IRS and New York State
2. Installment agreements
1. Short-term payment plans
2. Long-term payment plans
3. Amending an existing plan
3. Offers in compromise
1. Online pre-qualifier
2. Individuals
3. Preparing financial forms
4. Handling denied offers
4. Unusual circumstances and common errors to avoid
5. Best practices
Learning Objectives:
- Give examples of how to use "special circumstances" to lower an offer
- Determine how to amend a current installment agreement
- Identify when an OIC should be filed using alternative Form 656-L based on doubt as to liability
- List what assets are required to be included on Form 433-A
- Recognize how to avoid common errors that lead to denial of an OIC
Karen J. Tenenbaum, Esq., CPA, LL.M
Tenenbaum Law, P.C.
Partner
[email protected]
(631) 465-5000
An attorney for over 35 years, Karen founded Tenenbaum Law, P.C., which helps individuals and businesses facing IRS and New York State tax problems. Karen is a frequent speaker on IRS and NYS tax issues for numerous professional organizations, including the NCCPAP Accounting and Tax Symposium, AAA-CPA, New York State Society of Enrolled Agents and more. Presently, she serves as the Chair of the Suffolk County Bar Association Tax Law Committee. Karen received her LL.M. (Taxation) from New York University School of Law and her J.D. from Brooklyn Law School. Karen is admitted to the State Bar of New York and to the U.S. Tax Court. Karen is also a Certified Public Accountant.
Karen has been honored by the Suffolk County Bar Association Tax Committee with the Award of Recognition for her Exemplary Service to the Tax Law Committee and by Schneps Media with the Power Lawyers Award. She has been inducted into Long Island Business New’s Hall of Fame and was listed on the Power 25 Lawyer List. Karen has been named a New York Metro Super Lawyer for many years.
Scott Ahroni
Polsinelli P.C.
Shareholder
[email protected]
(212) 603-6300
Scott Ahroni is a shareholder in Polsinelli’s Tax Group. His practice focuses on federal, state, and local tax controversies. His particular areas of emphasis are audits, administrative appeals, and tax litigation in various courts and tribunals, including the United States Tax Court, United States District Court, New York State Division of Tax Appeals, New York State Tax Appeals Tribunal, New York City Tax Tribunal, New York Department of Labor, Unemployment Insurance Appeal Board, and the New York State Appellate Divisions, First and Third Departments.
Scott uses his background in tax controversy to assist clients in many facets of tax planning at the Federal, New York State, and City level an emphasis on providing guidance to businesses and individuals on foreign withholding obligations, foreign business, and asset holding structures, use of foreign tax credit, foreign earned income exclusion, outbound, and inbound planning for U.S. citizens and foreign nationals and pre-immigration planning.
Chris Bourell
Toledo Tax University Clinic
Director
[email protected]
(419) 684-8822
Chris Bourell is a practicing attorney and the director of the Toledo Tax Controversy Clinic at The University of Toledo College of Law. The clinic provides assistance to taxpayers in handling federal and state and local tax disputes. The clinic offers free representation to taxpayers who are involved with tax audits, appeals, and collection matters. In certain cases, the clinic represents taxpayers before the U.S. Tax Court.
The clinic negotiates and resolves contested matters with the IRS. Representation is offered to taxpayers who could not otherwise afford representation and also to a limited number of taxpayers in cases of particular educational merit, where the fee which would normally be charged by a tax practitioner could be expected to equal or exceed the amount of tax in controversy.
The clinic is staffed by law students who are trained in tax law and supervised by Mr. Bourell. The clinic not only gives students significant attorney/client experience but also fulfills the need of underrepresented taxpayers for free and competent legal representation.
Mr. Bourell earned his J.D. from Southern Methodist University Dedman School of Law and LL.M. in Taxation from the New York University School of Law. He is a licensed attorney in Ohio, Texas, and New York, and he is admitted to practice before the U.S. District Court for the Northern District of Ohio and the U.S. Tax Court.
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