The information and strategies you need to deal with the IRS.

Named a "Best Tax Book" by Entrepreneur.com

The Internal Revenue Service is the taxpayer's nightmare, and for good reason -- a tax bill or other notice can come out of nowhere and wreak havoc on your life.

But now you can confront America's most intimidating government agency with confidence. Stand Up to the IRS reveals the tactics of the IRS and how to deal with them. This book even contains confidential forms used by IRS agents during collection interviews and audits.

Use Stand Up to the IRS to:

file a late return

work out a long-term payment plan

get a Taxpayer Assistance Order

settle your tax bill for pennies on the dollar

stop collection efforts

avoid property seizures

protect your assets

determine if bankruptcy offers a solution

learn what to say when you face an auditor

appeal the auditor's decision

The 9th edition is completely updated with the latest rules, regulations and tax numbers. It also shows you how to go to Tax Court, if needed

Inside the IRS: What You Need to Know About IRS Operations

Chances are you will have a problem with the taxman at least once in your lifetime. Nearly everyone faces an audit, receives a bill for back taxes or has some other serious problem with the IRS. If it's your turn, you need to understand how your adversary -- the IRS -- is organized. Later, when we cover specific tax situations, this knowledge will be a big help.

So, let's take a look at the Internal Revenue Service, or IRS.

The IRS's stated mission is to "Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all."

A chart of the main IRS divisions appears a few pages ahead. Below are the divisions and offices you are most likely to encounter.

National. The IRS is a branch of the U.S. Treasury Department, with headquarters in Washington, D.C., and is ruled by a commissioner appointed by the president. About 1,900 folks work at the national office. The IRS brain is contained in the National Computer Center. The national IRS office sets tone and policy, while procedures -- especially audits and collections -- are left to the regional Service Centers and local offices.

The IRS is divided into four operating divisions, but only two concern most of us: the Wage and Investment division and the Small Business/Self-Employed division.

IRS campuses. IRS campuses (formerly called service centers) annually process over 200 million tax returns, about 50% business and 50% individual income tax returns. IRS campuses collect over one trillion dollars in tax payments each year from 125 million taxpayers and seven million organizations. Regional campuses are located in Andover, Atlanta, Austin, Cincinnati, Fresno, Holtsville, Kansas city, Memphis, Ogden and Philadelphia. They mail out tax notices: collection notices, or bills; tax return problem notices; and tax forms. Contacts with the IRS campuses are usually by mail or fax, or occasionally by telephone.

Tax Return Processing From January to May, regional campuses operate around the clock, processing income tax returns, extension requests and tax payments. Many temporary workers are hired, trained on the job and paid little more than the minimum wage. IRS officials admit that many processing mistakes are caused by these seasonal employees.

First, machines open tax return envelopes and remove tax returns and checks. Human transcribers scan the returns for completeness and enter the key tax return data into a computer; the computer then checks for arithmetic accuracy. A second transcriber double checks the first transcriber's work-up by re-inputting the same information into the computer.

Magnetic tapes of tax return data are sent to the National Computer Center, where each return is computer scored for its "audit potential." About 10% of all individual (nonbusiness) income tax returns are selected by the National Computer Center for further review. These files are sent back to the Service Centers. There, IRS classifiers (human beings) weed out most of the 10% scored for audit, based on their opinion of the most problematic tax returns. So, roughly ½% of all individual tax returns filed are audited. (For more information on how returns are selected for audit, see Chapter 3.)

Automated Collection System, or ACS. This program communicates with taxpayers who owe the IRS. It is a highly computerized collection system staffed by personnel working by phone and mail. You may talk to an ACS person, but you will never meet one.

 

The information and strategies you need to deal with the IRS.

Named a "Best Tax Book" by Entrepreneur.com

1. Inside the IRS: What You Need to Know About IRS Operations IRS Inefficiency Communicating With the IRS Rules of the Game -- Tax Laws Interpreting the Tax Code Self-Assessment of Income Taxes Winning the IRS Game 2. Filing Tax Returns: If You Haven't Filed and Other Concerns How Long Must You Worry About Not Filing a Tax Return? Consequences of Not Filing It's Better to File Before the IRS Contacts You What Will Happen When You File Late Requesting an Extension to File Filing a Return When You Can't Pay What You Owe Filing a Tax Return When You Live Out of the US Reducing the Chance of an Audit When Filing Amending Tax Returns A Word About "Aggressive" Tax Filing 3. Winning Your Audit How Long Do I Have to Worry About an Audit? Do I Have to Learn Tax Law to Win My Audit? Audit Selection -- Why Me, O Lord? When the IRS Increases Your Tax Bill Without an Audit Types of IRS Audits How an Auditor Approaches an Examination Preparing for an Audit Who Should Attend the Audit? How to Act at an Audit Finishing Audits Serious Audit Problems 4. Appealing Your Audit Within the IRS Pros and Cons of Appealing an Audit How to Appeal an Audit How the Appeals Office Works Preparing for an Appeals Hearing Meeting the Appeals Officer Presenting a Case to an Appeals Officer Negotiating a Settlement Should You Hire a Tax Professional for Your Appeal? If You Don't Settle on Appeal 5. Going to Tax Court: No Lawyer Necessary Tax Court Facts Small Tax Cases -- People's Court Regular Tax Court Cases -- Over$50,000 Other Federal Courts -- Paying First Is Required Bankruptcy Court Appealing to Higher Courts 6. When You Owe the IRS: Keeping the Tax Collector at Bay When You Can't Pay With Your Tax Return Getting Time to Pay After the Tax Bill Comes IRS Tax Billing Process IRS Automated Collection System Revenue Officers -- Front Line Collectors of the IRS Offers in Compromise -- Settling Tax Bills for Pennies on the Dollar Using the Bankruptcy Code to Stop the IRS Protecting Your Assets From the IRS Suspending Collection of Your Tax Bill 7. IRS Enforced Collection: Liens and Levies Tax Liens Tax Levies Assets the IRS Can't or Won't Seize Avoiding a Levy Getting a Tax Levy Released IRS Sales of Levied Assets 8. The Taxpayer Advocate: A Friend at the IRS Who Qualifies for Help From a Taxpayer Advocate? Contacting the Taxpayer Advocate Service Emergency Help: Taxpayer Assistance Orders 9. Family, Friends, Heirs and the IRS It's a Family Affair Owning Property Jointly Death and Taxes 10. Fraud and Tax Crimes: Do You Really Have to Worry? How People Cheat on Their Taxes If You Are Caught Cheating IRS Criminal Investigations If You Are Prosecuted 11. Small Businesses/Self-Employed: When IRS Trouble Comes Self-Employed -- You're a Prime Audit Target Employees or Independent Contractors? Payroll Taxes -- IRS Dynamite The Dreaded Trust Fund Recovery Penalty Cash Transactions Over $10,000 12. Penalties and Interest Penalties Added to Tax Bills Interest on Tax Bills Understanding Penalty and Interest Notices Reducing or Eliminating Penalties and Interest Designating Voluntary Tax Payments 13. Help Beyond the Book: Tax Professionals and Tax Information 14. When You Owe State Income Taxes The IRS and State Taxing Authorities Does Your State Have a Taxpayers' Bill of Rights? State Time Limits to Assess and Collect Income Taxes State Tax Collection Departments State Tax Bills When All Else Fails, Try Your Political Connections 15. The Taxpayers' Bill of Rights 16. The 25 Most Frequently Asked Questions Glossary of Tax Terms Index

"A hands-on guide to battling the IRS and coaxing favorable decisions from agency personnel."

 

"One of the best books on personal finance."

 

"[One of] the best tax books for 2005."

 

Frederick W. Daily is a tax attorney with over 35 years experience helping individuals and small business owners make smart tax decisions and stay out of trouble with the IRS. He has been featured as a tax expert on Good Morning America and NPR, and in publications across the country including Money Magazine, U.S. News & World Report, Newsweek, the New York Times, and the Chicago Tribune. He is the author of Stand Up to the IRS, Tax Savvy for Small Business and Surviving an IRS Tax Audit.

 

Stand Up to the IRS by Frederick Daily
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