Saturday, March 7, 2009

IRS Will Work With Taxpayers In Trouble

Commissioner Shulman of the IRS states that the IRS will work with taxpayers who cannot pay their taxes. Shulman said: "If they can't pay, they should attach a note" to the tax return, and either contact the IRS or wait for the agency to call." Click here to see full story.

See The “What Ifs” of an Economic Downturn on the IRS website.

Thursday, March 5, 2009

Who Pays the Cobra Premium

As a follow-up to the First Wednesday Tax Forum on the Cobra premium issue, Peter Anastopulos, an attorney with The Roberts Law Firm, advises that the federal government will be paying the tab. The government will reimburse the coverage provider via a tax credit against certain employment taxes. The Department of Labor FAQ states:

"The premium reduction (65 percent of the full premium) is reimbursable to the employer, insurer or health plan as a credit against certain employment taxes. If the credit amount is greater than the taxes due, the Secretary of the Treasury will directly reimburse the employer, insurer or plan for the excess."

Wednesday, March 4, 2009

House Values

When a taxpayer makes an offer in compromise and there is a question about the value of the taxpayer's home, the value of the home will be reviewed by the IRS to determine the correct value. A website that may help in this regard is Home Almanic.

Monday, March 2, 2009


The IRS has advised that it can legally freeze a refund when the IRS has proposed (but not assessed) a trust fund recovery penalty against a taxpayer. See CCA 200908045. The IRS contends it is not required to immediately issue a refund. It is the position of the IRS that it can freeze the refund so it can offset the taxpayer's refund against any subsequent trust fund recovery penalty assessment. We are seeing this in other cases besides the trust fund recovery penalty. A taxpayer can adjust the taxpayer's withholding so there cannot be a freeze. From a practical point of view, a taxpayer should not allow the IRS to keep the taxpayer's money during the year.