By: Robert E. McKenzie 1. A CHANGING IRS IRS Workforce 1.10 Because of Congressional cuts in IRS budgets its workforce continued to shrink until 2008. In 2009 and 2010 the IRS had its budgets grow and its workforce grew. In…
Below are links to the latest revisions of the national standards used in collection financial analysis. The charts show the itemized monthly national standards and the total money national standards as revised in March 2010. The new standards are effective…
Robert McKenzie Forbes Blog on Reducing IRS Penalties Custom Search
Procedural Requirements for Imposition of Penalties and Additions to Tax
The Internal Revenue Service Restructuring Act required that each notice imposing a penalty include the name of the penalty, the Code section imposing the penalty, and a computation of the penalty. The Act also requires the specific approval of IRS management to assess all non computer generated penalties unless excepted. This provision does not apply to failure to file penalties, failure to pay penalties, or to penalties for failure to pay estimated tax.
8-24-12 Robert E. McKenzie Appearance on Money For Lunch Talk Radio
Over the years the IRS offer in compromise program has been the subject of a great deal of criticism by Congress, the National Taxpayer Advocate and taxpayer representatives. The new initiative represents the most dramatic liberalization of IRS settlement policies ever announced. It represents a welcome change from an agency which has always placed substantial roadblocks to those seeking to compromise their tax obligations.
“I’ve represented clients who paid large sums of money to each of those companies and were disgruntled with the services they received,” said Robert McKenzie, a partner in the Chicago-based law firm Arnstein & Lehr.
“There are still lots of tax resolution services out there, but the three that filed for bankruptcy—TaxMasters, Roni Deutch and JK Harris—were the ones that engaged in heavy duty advertising on a national scale,” said Bob McKenzie, a tax partner at Arnstein & Lehr.
Robert E. McKenzie ©2012 Custom Search The IRS recently relaxed its rules for payment of smaller tax liabilities. The revised procedures now allow taxpayers up to 72 months to pay their tax obligations. The new procedures also increase the maximum…
A tax practitioner is frequently confronted with the following question when giving a client a return with a balance due on it: “Should I file the return right now, or wait until I have the money to pay it?”
The answer is very simple. File it as soon as possible! If your client has any money at
all available for payment, it should be enclosed with the return. The reason for such
advice is that one of the largest penalty rates which the IRS is allowed to impose is for
late filing of a return. The penalty is five percent per month, up to a maximum, of 25%, of the tax due but unpaid by the due date of the return, which works out to be an annualized rate of 60%. Therefore, if your client fails to file the return on time there is an effective annual rate of interest in excess of 75% when you add interest and. late payment penalty. The late payment penalty after notice, on the other hand, is one percent per month, or an effective rate of 12% per year in addition to statutory interest. One1 drawback of filing a timely return without remittance is that the IRS will arrive at the taxpayer’s door to collect the liability much sooner than if he or she files a return late. However, the additional cost for penalties incurred to gain this time is prohibitive.