In 2011 the IRS issued a new offer in compromise form. Taxpayers proposing compromises based upon doubt as to collectibility of effective tax administration must submit revised Form 656. Taxpayers proposing an offer based upon doubt as to liability must now submit Form 656-L and a narrative setting forth defenses to the liability. To comply with the new downpayment requirements taxpayers must submit Form 656-PPV with the required downpayment.
Robert E. McKenzie recently contributed to Forbes’ “IRS Watch” section in an article, “Afraid to File Your Return Because You Owe IRS? Here’s How IRS Collects Delinquencies.”
Mr. McKenzie explains that the IRS Collection Division attempts to collect delinquent taxes as inexpensively and rapidly as possible using automated methods. He then outlines the IRS’s four-level system of collection, the Regional Compliance Centers which process the filed tax returns, the IRS procedure for business taxpayers’, small dollar payment plans, among other key information. Mr. McKenzie’s recommendation is to be proactive when you owe the IRS: “Not filing your return on time (or with an extension) will cause even greater penalties.”
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