Korntved & Associates
Your Place For Solutions To Tax Problems.
Internal
Revenue Service versus State: Documentation and negotiation in settlement.
The Internal Revenue Service requires extensive documentation for settlements. The paperwork has to be filled out correctly because mistakes can cause settlements to be rejected instantly.
The negotiations involved in Internal Revenue Service settlements can be difficult because there is so much at stake on both sides. Frequently, the amount offered is FAR less than the amount owed. Since the law allows an individual to offer a small amount in lieu of a large tax debt the Internal Revenue Service to will always try to FIND ANY WAY to get more out of the offer.
Any mistaken words or incorrect line items in the paperwork will cause material counters or rejections! So there is a major emphasis on doing EVERYTHING correctly.
A person that qualifies for Internal Revenue Service settlement will ALMOST ALWAYS qualify for State settlement (but not vice-versa). That is because the States only require a certain amount of documentation. The States look toward tax portions only, a lot of times in settlement – even before any settlement would be submitted. Since States have preconceived ideas in settlement the paperwork many times is just a formality for settlement. Errors and mistakes can be made from time to time and still not affect settlement.
States may or
may not allow settlement at the collection level. It depends on the State. Some
States are like the Internal Revenue Service and have separate groups for settlements
and collections.
The States and
the Internal Revenue Service both handle liens and levies in similar fashion.
The States and
the Internal Revenue Service both allow settlements to be attempted more than
one time when conditions are met.