TaxCure Blog

For decades IRS revenue officers paid unannounced visits to taxpayers’ homes and businesses to talk about unfiled returns and unpaid taxes, but this is no longer happening. As of July 24, 2023, the agency has stopped this practice. Now, if an officer wants to meet you in person, they will send a 725-B appointment letter to request a meeting.

Do you have unfiled tax returns from 2019 or 2020? Right now, the IRS is letting taxpayers catch up without interest or penalties. This is an extremely rare opportunity, and it gives taxpayers the chance to save hundreds or even thousands of dollars in penalties and interest. But you need to act fast — you only have until September 30 to take advantage of this program. 

For the second year in a row, there was a dramatic drop in IRS liens and levies. In Fiscal Year 2020, the IRS filed 291,081 liens, and the agency sent out 396,269 notices of levies requested from third parties. The following year, in FY 2021, liens dropped to 212,251 and levies dropped to 305,610.

Every year, the IRS releases a report on taxpayer migration. The newest release from May 2022 shows migration patterns between tax years 2019 and 2020. The IRS collects data on the number of personal tax returns filed by taxpayers who migrated in and out of all 50 states and the District of Columbia, as well as the adjusted gross income (AGI) associated with these returns. 

Although the number of Internal Revenue Service (IRS) offers in compromise (OIC) received increased by 9.98% in 2021, the number of offers approved only increased by 6.06%. Therefore, the IRS OIC acceptance rate for 2021 fell by 1.1% to 30.7% in comparison to 2020. 30.7% represents a differential of 12.1% from the OIC all-time acceptance rate high of 42.8% back in 2016. Moreover, the average amount per offer in compromise accepted increased by 3,520.24 or 31.83%.

As of April 25, 2022, the IRS has increased its Collection Financial Standards. These standards are budgetary allowances the IRS uses when assessing a taxpayer’s ability to pay delinquent taxes. The standards refer to the amounts the IRS determines are allowable, reasonable, and necessary for taxpayers in regards to common household budgetary categories. aThey are based on the Bureau of Labor Statistics, U.S. Census Bureau, and American Community Survey.

On November 15, 2021, the Taxpayer Advocate Service (TAS), an independent IRS unit, announced two significant changes to the IRS Offer in Compromise (OIC) program, which are favorable for taxpayers who owe federal taxes. This new policy in OICs marks a significant shift for the benefit of taxpayers with accepted offers. It will also help taxpayers experiencing financial hardships. The TAS collaborated with the IRS to remove some obstacles for taxpayers considering an OIC. An OIC allows taxpayers to settle their tax liability for less than the full amount owed for the tax year(s). An accepted offer benefits the taxpayer by bringing welcome tax liability finality for the tax year(s) included in the offer.

As I was going about my day, I received automated robocalls (one of many over the last few months) from a so-called Mary Fletcher discussing how as a state resident I may want to consider enrolling in the new tax compromise program provided by the American Rescue Plan Act of 2021. I also received another from Eva Smith, about the Offer In Compromise program that is “now open for enrollment.” As soon as I received the message, I knew it was false or misleading. Here is a transcription of the voicemails I received (and many others probably received) and what you should do if you are facing tax problems.

Business owners who fall behind on filing timely returns and paying federal payroll taxes often are faced with unpaid state payroll taxes.[1] The more employees the business has the more complex payroll taxes become. This can be further complicated when business owners are not knowledgeable about the nuances regarding the classification of a worker for employment tax purposes. When business owners fall behind in paying their payroll taxes, the key is retaining the services of a qualified tax firm with experience in addressing both federal and state payroll tax issues to minimize monetary penalties and criminal exposure at the personal level.

Approximately 81% of the US Treasury’s tax revenue comes from payroll taxes and federal withholding. Also called trust fund taxes, these employment taxes include Social Security, Medicare, and income tax withheld from employees’ paychecks.