Thursday, February 24, 2011

Below is the new IRS position on tax liens in IR-2011-20 The IR states in part that "The IRS will significantly increase the dollar thresholds when liens are generally filed. The new dollar amount is in keeping with inflationary changes since the number was last revised. Currently, liens are automatically filed at certain dollar levels for people with past-due balances. There are problems with a "threshold" that will trigger a tax lien are, as follows: 1. An individual or business may have NO ASSETS; therefore, a tax lien is meaningless and it will only serve to ruin the credit of the individual or business. The IRS does not "get it." This position makes no economic sense. Why file a tax lien against an individual or business with no assets to seize or levy? Nothing is accomplished except ruining their credit. Without credit, businesses close & jobs are lost. Without credit an individual cannot rent, but a care, or get a job. And the credit stain will stay on their credit report during the period the tax debt is owed and for SEVEN YEARS AFTER THE TAX DEBT IS PAID OR OTHERWISE DISCHARGED. The IRS should be required to do an ECONOMIC ANALYSIS on the taxpayer to determine if the tax lien will give the IRS a real security interest in assets that make economic sense. It is hard for me to believe that the IRS can be this void of the ability to undersand that it is futile and nonproductive to file a tax lien that serves no purpose other than to destroy businesses and lose jobs due to the loss of credit. And there is no safe harbor in that rule. For example, taxpayers in the financial services industry will not get work with any kind of a tax lien. And why file a tax lien against someone who can full pay that tax lien in 12 months, 24 months, etc.? Those who wrote this administrative rule work in ivory towers and do not understand the real world where credit is essential for their abusility to survive and grow income in the present economy. 2. CONGRESS DID NOT WRITE A MANADTORY TAX LIEN STATUTE. The IRS "may" file a tax lien under section 6321. The IRS mandatory tax lien is legislative, a function reserved to Congress, not to the IRS. Congress should not allow the IRS to have the authority to legislate; in this instance, converting a discretionary lien statute into a mandatory lien statute under certain circumstances. The new rules on Offers in Compromise have not been explained. But I have repeated experiences with the IRS in OIC cases where the IRS Offer Specialists DO NOT FOLLOW THEIR OWN MANUAL. For example, the standards for settlement are based on "reasonable collection potential" determined by objective factors. But, repeatedly, I get responses where the IRS does NOT accept an OIC without stating why they will not accept the OIC. In reality, this is misconduct. But without IRS oversight, the IRS increasingly takes aggressive and prosecutorial positions. What is needed is IRS hearings to consider those instances where the IRS is ineffective, inefficient, and not following the law. The National Taxpayer Advocate (NTA) is of no help because that office REFUSES TO ISSUE TAXPAYER ASSISTANCE ORDERS contemplated as the tool of the NTA to stop IRS lien and levy abuses. In the 2010 NTA report to Congress, the NTA TAO use was negligible - far less than 1% of all of the requests for assistance received by the NTA. If Congress is looking to cut the IRS budge, they can easily eliminate the 2,000 NTA jobs because that office does NOT follow its congressional mandate to issue Taxpayer Assistance Orders to prevent economic hardship on individual and business taxpayers because of abusive and unjustified tax liens and tax levies. IRS hearings would also help to document the ineffectiveness of the office of the NTA.,,id=236540,00.html

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