Mastering IRS Representation

Notices from IRS - and especially from the collection division - scares the assesse. However, as a tax professional and a representative, it is required of us to represent the case of our clients in the best possible way. This is only possible in the interest of an assessee when the representative understands key workings, and requirements of the IRS and IRS representation. Law as a continuous changing system in the interest of the public updates some parts continuously and thus changes the practical applicability and the approach to deal with it. 

Tax and Bankruptcy attorney, Larry Heinkel in this webinar provides a refresher as to how to master IRS representations. It includes all the necessary parts securely divided in the sub-sessions. Please refer them for detailed description. 

Session 1- DEALING WITH IRS COLLECTIONS DIVISION (PART I)

Many tax professionals concentrate on tax planning and compliance, along with (perhaps) the audit of tax returns they have prepared. Some venture into the “controversy” world of resolving IRS tax problems.

On Mar. 26, 2020, the IRS released its new "People First Initiative" as part of its continued efforts to provide relief to taxpayers in light of COVID-19. Further guidance continues to be rolled out. For taxpayers who are currently under audit, in an appeal before the IRS Independent Office of Appeals, or the United States Tax Court, or are now in collections with the IRS, this offers a unique opportunity to limit their liability. It also comes with substantial pitfalls for advisors if they fail to fully appreciate the limits of the relief being provided by the IRS.

Tax professionals must recognize key procedural tactics and planning methods for taxpayers seeking to avoid collections and compliance actions. For those taxpayers already subject to IRS enforcement actions or currently under audit, the time is now to revisit collection solutions based on the impact of COVID-19 and the current state of the economy. Tax Problem Resolution work (or “controversy” work) consists, generally, of representing clients in audits (and possible appeal of an adverse audit); and representing clients with tax debts before the IRS Collections Division. 

Major Topics Covered : 

• Installment Agreements
• Requesting Installment Agreements
• In-Business Trust Fund Installment Agreements
• Effect of an Installment Agreement

Some also represent taxpayers before the United States Tax Court, District Courts, Bankruptcy Courts, and some handle criminal investigations and trials. Knowing the rules, what you can and cannot do, what IRS can and cannot do, is all part of the game and if you play it well, you can resolve clients’ tax debt problems ethically, successfully, and profitably.

Session 2- PROPER PREPARATION SUBMISSION & NEGOTIATION - OFFERS IN COMPROMISE(OIC)

An offer in compromise (OIC) is an application to settle an IRS tax liability for less than the full amount of tax and penalties that are due for a period or periods. Other than negotiating a simple installment agreement for the repayment of tax debts, Offers in Compromise (OIC’s) are one of the biggest weapons in a practitioner’s arsenal, and can be one of the more lucrative areas of practice as well.  With a sample fact pattern, we will take  you step-by-step through how an OIC is prepared, submitted, and negotiated. 

This free CPE webinar provides a overview of the Offer in Compromise program for tax professionals representing taxpayers with unpaid federal tax obligations and discusses the pros and cons of the Offer program, and briefly cover IRS rules for processing Offer applications, how the Offer investigation process works, and some helpful tips for writing better Offers.

Major Topics Covered :

• How the OICs theory work?
• How to value assets?
• How to determine monthly ability to pay?
• Why it’s important to consider monthly tax obligations as an “expense” ?
• When to file OICs?
• What are the alternatives of OICs?

Session 3- UNDOING JOINT LIABILITY- NO LONGER MARRIED, INNOCENT SPOUSE RELIEF (ISR)

Married individuals can either file a joint income tax return or, if they choose, may file two separate tax returns. Filing separate tax returns is usually (but not always, as you will see) done to reduce the tax liability. However, if finding the lowest tax liability is your main concern, there are no actual guidelines for determining which filing method you should use. If this is your goal, you need to calculate the tax liability under both scenarios to see which is better. Nonetheless, there are other factors you need to consider.

If the tax is paid, no problem, right? But what if the liability is not paid? Or what if there is a large audit assessment and the debt can’t be paid? Worse, what if they divorce and the audit adjustment was attributable to one former spouse, but IRS is trying to collect from the other, “innocent” one? Learn your options here.

Major Topics Covered :

Filing Status Options

• Married filing jointly
• Married filing separately
• Amending to go from one status to the other

Innocent Spouse Relief

• Qualifications
• Definitions
• Factors to consider
• Planning tips

Special Rules for Certain Cases

• Qualifications
• Definitions
• Factors to consider
• Planning tips

Equitable Relief Options

• Qualifications
• Definitions
• Factors to consider
• Planning tips

Injured Spouse Relief

• Qualifications
• Definitions
• Factors to consider

Session 4- DEBT FORGIVENESS AND SECTION 108

Debtors with cash flow issues who may be unable to pay their debts without accommodations from their lenders face numerous tax issues, and sometimes tax surprises, in the context of debt workouts and bankruptcy. The American economy is hurting and taxpayers are suffering. People are walking away from their homes and credit card debt. When creditors write off a debt, they are required by law to issue the taxpayer/debtor a Form 1099-C, Cancellation of Debt. It is unfortunate that many taxpayers and their representatives are unacquainted with IRC section 108 which excludes many of these discharges or cancellations of debt from taxable income. Receiving a form 1099-C can be a scary thing for taxpayers, who frequently then call their accountants for help. 

This CPE webinar will discuss the various ways or reasons cancellation of debt income can be excluded from income and the consequences of such action including :

1. Issuance of 1099’s

•  When 1099’s must be issued
•  When the forgiveness occurs

2. Exclusions from Gross Income

•  Bankruptcy
•  Insolvency
•  Farm Indebtedness
•  Real Property Indebtedness
•  Principal Residence

3. School loans, gifts, Deductible Debt

4. Bifurcations

•  Foreclosures and Short Sales
•  COD vs capital gain or ordinary income

5. Form 982

6. Reduction of Tax Attributes

Session 5- DEALING WITH IRS COLLECTIONS DIVISION (PART II)

In Part I, we learned the many “basic” tools in dealing with IRS’ Collections Division. Now we turn to some of the more advanced topics in the “collections” arena.

Facing IRS collections is some of the worst financial stress you can face. If you don’t pay the IRS what you owe, they can seize your assets, garnish your wages and place liens on your property. But the good news is those heart-stopping effects can be easily avoided as long as you communicate with the IRS. Even if you can’t afford to pay what you owe, there are still steps you can take to ensure the IRS doesn’t use their most severe collection actions against you. This CPE webinar will cover what you need to know about the IRS collections process and how to avoid the worst of it.

Major Topics Covered :

• Federal Tax Liens, Levies & Seizures
• Collection Due Process (CDP) Hearings
• Multi-Year Non-Filers

Session 6- TRUST FUND RECOVERY PENALTIES

When you have employees, you withhold their Medicare and Social Security contributions from their checks, and in most cases, you also withhold some income tax. These amounts are referred to as trust fund taxes, and you are obligated to send that money to the IRS. If you fail to make those payments, the government can charge a very serious penalty called the Trust Fund Recovery Penalty.

Congress passed a law that provides for the Trust Fund Recovery Penalty (TFRP) to encourage prompt payment of withheld income and employment taxes, including social security taxes, railroad retirement taxes, or collected excise taxes. These taxes are called trust fund taxes because you actually hold the employee's money in trust until you make a federal tax deposit in that amount.

As a result of the Covid-19 pandemic, we may find many companies closing or filing for protection under Chapter 11 of the federal bankruptcy code. In a high percentage of those cases, payroll taxes may not be paid leaving the owners (and others) personally liable for the unpaid trust fund portion of those liabilities. 

Major Topics Covered :

• How to calculate the trust fund recovery penalty (TFRP)
• How to minimize exposure to the TFRP
• How to avoid malpractice when dealing with these volatile cases.

Session 7- ETHICS IRS CIRCULAR 230 - CONTROVERSY SIDE OF CIRCULAR 230

A variety of rules place ethical constraints on the advice that tax practitioners can give clients. This cpe webinar covers statutory, regulatory and ethical standards governing those who practice in the tax field, emphasizing current issues in the application of the rules of professional conduct, Circular 230 (governing those admitted to practice before the Internal Revenue Service), and provisions of the Internal Revenue Code and the Treasury Regulations governing return preparers

This course is designed to meet the general ethics requirements for CPAs licensed in various states.

Major Topics Covered :

• IRS Circular 230
• AICPA Statements on Standards for Tax Services
• IRS practice issues
• IRC Sec. 6694(a) tax return practitioner penalty.

Even though an attorney’s Bar Association and a CPA’s governing board may have ethical rules by which the practitioner must abide, the Internal Revenue Service has its own rule governing the professional activities of those who practice before it, and those rules are found in Circular 230. In addition to conceptual theories, it provides detailed guidance on the applicable specific laws, rules, and regulations. It also shows the controversial side of Circular 230.

Session 8- DISCHARGING INCOME TAXES THROUGH BANKRUPTCY

Bankruptcy is a legal process available to an individual or business to either eliminate debt or reorganize their debt so they can move forward. Through this process, you may be able to stop foreclosures and repossessions, stop harassing creditor phone calls, stop creditor lawsuits and eliminate debt. 

There are several bankruptcy options that may be filed; Chapter 7, Chapter 11, and Chapter 13 are the most common. Which of these bankruptcy chapters you may be qualified to file depends on many different criteria and questions to be answered.

Since the bankruptcy code has several rules that have to be followed in order to discharge Tax debt.​The answer to this question should come from someone like tax attorney Larry Heinkel who has helped thousands of people like you since 1983 to make the right decision for their situation. There are several options to eliminate your tax debt, including

• a payment plan,
• a settlement via Offer in Compromise (OIC),
• challenging the actual amount of the liability,
• discharging the tax debt through bankruptcy. 

Major Topics Covered :

• Learn how “older” income taxes can be discharged in bankruptcy. 
• Learn how an OIC is not always the only (or BEST!) option for the affluent taxpayer. 
• Learn how to make money and avoid malpractice by advising clients and bankruptcy attorneys when and whether a tax debt can be eliminated through bankruptcy.