In case you have problems in understanding and filing your returns with Internal Revenue Service (IRS), then you can visit the IRS website  where you can find lot of help and all the forms that can be downloaded.  When your returns are rather complicated, you do not need an IRS Tax lawyer but an accountant.  However, when you are in default having not filed your returns and/or not paid taxes due, then you need to consult an IRS tax lawyer.  Basic information is available on the IRS website about various technical terms but only a tax lawyer can fully explain your options.

The common matters that IRS takes most seriously that can land a person in serious trouble are briefly listed below that also suggest a way out.

1.      Offer in Compromise (OIC):

An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service (IRS) that resolves the taxpayer's tax liability. The IRS has the authority to settle, or compromise, federal tax liabilities by accepting less than full payment under certain circumstances. The IRS may legally      compromise for one of the following reasons:

v       Doubt as to Liability: Doubt exists that the assessed tax is correct.

v       Doubt as to Collectibility: Doubt exists that the taxpayer could ever pay the full amount of tax owed. The minimum offer amount must generally be equal to (or greater than) the taxpayer's reasonable collection potential (RCP). The RCP is defined as the total of the taxpayer's realizable value in real and personal assets, plus his/her future income.

v       Effective Tax Administration: There is no doubt that the tax is correct and no doubt that the amount owed could be collected in full, but exceptional circumstances exist such that collection of the full amount would create economic hardship or where compelling public policy or equity considerations provide sufficient basis for compromise. 

2.      Penalty Abatement:

Another, very effective program of relief from of an outstanding tax debt is penalty abatement—deduction from the full amount of the tax.  If there were circumstances beyond your control that prevented you   from paying your tax debt and led to delinquency, one can challenge the penalties and interest that have built up and negotiate them down.  Relief from penalties falls into four separate categories. They are:

Reasonable Cause – honest mistake made by the taxpayer, ignorance of law, death, serious illness, unavoidable absence, etc.

Statutory Exceptions—simple or complex legislative tax code changes.

Administrative Waivers—undue hardship, fire, flood, natural disaster, bad legal/tax advice.

Correction of Service Error—mistake made by the IRS.

3.   Wage Garnishment/Bank Levy:

 When the IRS or state has failed repeatedly to collect back taxes, they begin to seize assets. This process is called a “levy.”  When they attach wages, it’s termed a “wage garnishment.” After providing either ten, thirty or sixty day notice through certified mail, they are legally allowed to seize bank accounts, demand payment from accounts receivable, take control of property for auction, and assume title on vehicles. Virtually anything of value can be seized to satisfy the outstanding debt.  An IRS tax lawyer would become necessary for you.

4. Payment Plan:

This program is for taxpayers and businesses who cannot settle their entire tax debt at one time and need to make payments on it. This means valuable time to catch up and escape the harassment and embarrassment of revenue officers and agents, allowing room to map out an affordable solution. Under this program, the IRS withholds all collection activity until you are financially able to accept a payment plan or have an Offer in Compromise submitted

5.  Innocent Spouse:

If your spouse or ex-spouse understated the tax on a jointly filed return, you are eligible to be released from the obligation for the tax liability and the related interest and penalties. Your only obligations to be released from the liabilities are to show that the understatement of tax is attributable to your spouse and that you had no reason to know of the understatement. Additionally, you must claim to be an innocent spouse by filing Form 8857 within 2 years after the IRS has begun to try to collect the tax from you.

6. Lien Subordination:

If there is a tax lien on your home or property, the lien can be lifted temporarily and allow you to refinance or sell. This solution is especially useful when using equity in a property to pay off a negotiated settlement, and can also be a smart option to take advantage of favorable interest rates and market conditions.

7. 941 Payroll Issues -- Payroll Tax:

If you own or have owned a business with employees, the IRS assesses what is termed 941 or employee withholding tax. This tax is due every operating quarter, and if it is not paid, penalties and interest will begin to accrue. If these taxes are neglected long enough, the business can be closed and all assets seized to satisfy the debt. This is widely considered to be the worst form of tax debt as the IRS considers it 'stealing' directly from the government.  Depending on the variables of the case, the taxes themselves can usually be negotiated down to a settlement, and the associated penalties and interest abated.

8.      Unfiled Tax Returns - Substitute For Return: 

If a taxpayer fails to file a return, the IRS submits what is termed an SFR (Substitute for Return). This is submitted by the IRS for the taxpayer using bank deposits as the taxpayer's gross income. This is the worst form of taxation as it allows for zero deductions and grossly exaggerates a taxpayer's liability.  So you better consult with an IRS tax lawyer.

9.      State Tax: 

Many people who owe the IRS, in turn, end up owing state tax as well. While not as broad in scope as the IRS, State collection authorities nevertheless have tremendous reach and are generally more forceful in their collection efforts. While their tactics may be more stringent, they are nonetheless bound by tax law to offer relief to those who qualify. Most states offer similar versions of the Offer in Compromise program, and will offer Payment Plan and amnesty from penalties and interest if successfully approached.

The above information is not a legal advice.  It simply points out the problems that individuals and businesses may face due to circumstances, at times, beyond their control.  If you need to talk to an IRS tax lawyer, there are several website you can visit on the internet.  There is one  taxhelpers.com  that I found very helpful.

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