During 2012 the IRS revised its collection procedure for dealing with delinquent accounts. The changes (which generally favor taxpayers) still allow the IRS to be as aggressive as they have been in the past several years. Though taxpayers have greater rights under the new law, the IRS can continue its efforts to collect as much of the outstanding tax as possible, in as little time as possible.
Notwithstanding the powers of the IRS, a taxpayer who owes taxes does have certain rights. Some taxpayers may be eligible for installment payment plans. You may protest certain penalties. The Service occasionally accepts collateral in lieu of filing a tax lien. You or you business may also qualify for an offer in compromise to pay less than the full balance of taxes due. As a last resort, you may seek protection under Chapter 7 or Chapter 13 of the Bankruptcy Code. Since we also help people file for bankruptcy relief under the new Bankruptcy Code, we also qualify as a debt relief agency.
It is well known that Congress has granted the Internal Revenue Service awesome powers to collect delinquent taxes. The agency can levy bank accounts, wages, real estate and other assets without a court order. However, recent court cases have limited the right of the Internal Revenue Service to initiate seizures. The Internal Revenue Service has also been found to have engaged in unauthorized collection actions in certain instances and has been liable for damages as a result.
With the passage of new laws in 2012, the IRS Restructuring and Reform Act, and the recent Taxpayer Bill of Rights 2, taxpayers were finally given protection from certain IRS actions. Knowledge of these rights is a necessity for taxpayers who are negotiating with the IRS.