In order for the IRS to levy your wages or bank accounts to pay a tax liability they must give your written notice of their Intent to Levy by either personally delivering it to you, leaving it at your home, or sending it by certified mail to your last known address.  Practically speaking, 99% of my clients receive their levy notice by certified mail.

This notice must be given at least 30 days prior to any seizure by the IRS.  And the letter must give you notice of the tax periods the IRS is trying to collect for and an explanation of the levy process, your collection alternatives, and your right to an appeal.

Since you have an opportunity to appeal, this can help give you a little more time to get things together and work out a settlement with the IRS for your tax liability.  As you can see, the amount you owe the IRS is not a factor in whether they can levy against you or not.

Answer: I would recommend two potential courses of action for you since your offer in compromise was accepted.  First, I would send a letter to the IRS office that sent you the Urgent notice stating that their records are inaccurate and they accepted an offer in compromise for this tax year.  I would also enclose a copy of the offer in compromise acceptance letter.

Next, if you continue to receive collection letters from the IRS for this tax period or others that were included in the offer in compromise, you should write a letter to the taxpayer advocate service basically telling them the same things: you had an offer in compromise accepted, you have a letter that says so, you have a letter that says you paid the offer in compromise in full and you would like the taxpayer advocate to help you to get the IRS to correct their records.

A lot of times, the letters are automated, so it may be that the IRS records are just in limbo and have not been updated yet.  So if you continue to receive letters, you should definitely take action so the IRS doesn’t accidentally levy your wages or take some other collection action that could be harmful to you.

    This week we had a new article on the independent contractor/employee relationship and what to do if you have been classified as an independent contractor when you are really an employee. 

    We also got back to the basics and briefly hit on some of options you have available in your "arsenal" when dealing with the IRS on your back taxes.  These options include the offer in compromise, installment agreement, and uncollectable status.

    And we sort of broke out and discussed something a little different – keeping up with your taxes on your home businesses.  A lot of times people feel like since they didn’t make a lot of money or since they were working from home rather than an office they do not have to pay taxes. 

         The IRS has several types of offers in compromise based on the type of situation you find yourself in, you may qualify for more than one, however, the IRS is only able to grant your OIC based on one of the grounds.  The grounds for Offers in Compromise are based on: (1) doubt as to liability, (2) doubt as to collectability, and (3) for effective tax administration.  An offer based on doubt as to liability would be filed when the taxpayer believes he does not owe the tax.  An offer in compromise based on effective tax administration would be filed when, even though the taxpayer has assets and/or income to full pay their tax liability, but there is a good reason to allow them to settle their tax liability for less than the full amount owed.  Finally, we will consider the offer in compromise based on doubt as to collectability in much more detail in this manuscript.  The offer in compromise based on doubt as to collectability is filed when there is no contention that the tax is owed, however the taxpayer does not have the assets or future income to full pay the liability.

    Here is the list of the seven posts:

1. Control
2. Capital
3. Opportunity
4. Right to Discharge/Fire
5. Integral Nature
6. Permanence
7. Intent

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The second factor is "Capital."  In essence what this factor is analyzing is who is investing in facilities, tools, etc. for the worker?  If the employer provides all of the tools, financing, and office space to the worker they may likely be an employee.  However, if the worker provides his own tools and facilities where his work is performed, he is likely an idependent contractor. 

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“i have filed my income taxes but do not have the money to pay what is the irs statute of limitations”.

The main question being asked in this query is what is the IRS statute of limitations for collecting tax liability that I owe. I have answered this question several times before on this blog, see the posts below:

IRS Statute of limitations Post 1

IRS Statute of Limitations Post 2

IRS Statute of Limitations Post 3

Essentially, after the IRS has assessed taxes against you – and in most cases your tax returns are filed before the taxes to be assessed (as stated in the search engine query) – the IRS may collect those taxes from you for ten years from the date of assessment. The date of assessment varies depending on when you filed your tax returns. If you filed your 1996 tax return in March 1997, the tax was assessed on April 15, 1997 and therefore the collection statute of limitations would have expired on April 15, 2007. If this is the case for you, then the IRS may no longer harass you or collect from you for those taxes.

If you are still receiving collection letters for taxes that are older than ten years there may be a valid reason. I can assist you in determining how much longer the IRS may collect taxes from you for various years. Please visit the contact page and send me an e-mail or call me to discuss how I can help you out in your situation.