Page 24 - Phoenix Vol 11 No 3

Pennies on the Dollar: Tax Collection Controversies and the IRS Fresh Start Program
BY DONALD W. “MAC” MACPHERSON
e IRS just gave me no- tice of levy regarding my bank account, and there is no way in the world that I can pay the $750,000 they say I owe!” your client exclaims. “Settle down,” you respond. “ anks to the IRS Fresh Start Program there are reasonable remedies – what IRS calls ‘reasonable collection alternatives’ – including the O er in Compromise (OIC), Installment Agreement (IA), either ‘full pay’ or a ‘partial pay,’ and
Currently Not Collectible (CNC).”
In fact, taxpayers who owe IRS are o en able to settle with an OIC for pennies on the dollar; i.e., less than 10% of the total tax, penalties, and in- terest debt. It all depends on the com- plex rules and crunching the num- bers. In addition, if you are not able to resolve your issues with IRS, you have the right to appeal their decision to the U.S. Tax Court, which o en results in a court settlement, or a re- mand of the case back to IRS for your second bite at the apple for a cash on
the barrel head settlement.
anks to the Congressional man-
date of 1998, IRS was forced to be kinder and gentler when it comes to collection. For example, under 26 U.S.C §6330 IRS must give taxpay- ers a “Collection Due Process Hear- ing” (CDPH) by which you can freeze
IRS collection levies, obtain a hearing with a Settlement O cer, and then of- fer collection alternatives. Plus, if an agreement is not reached within the CDPH you can petition Tax Court; and, if necessary, appeal to the 9th Circuit. Section 6720 provides the same remedy for IRS lien actions ex- cept that the lien is led and remains until the dispute is resolved. More- over, because of the 2008 economic disaster – resulting in a slow economy for several years therea er – begin- ning in 2012 IRS began its OIC Fresh Start Program by which the rules were greatly relaxed, making the OIC far more feasible for millions of taxpay- ers.
Pennies on the dollar? Can this be true? Consider the results our rms, e MacPherson Group (TMG) – a team of father and three sons; two are attorneys and one is a college profes- sor – has obtained for clients, even those who have gone to prison for tax o enses. For example, a woman who was sentenced to a year in prison for ling a false tax return obtained an OIC of $300 against over $1M owed. Well, okay, she was 62 years old, not in good health, and her sole source of income was Social Security Admin- istration (SSA) retirement payments. But how about a businessman who took a chance and lost in expanding
his business, ending up owing IRS $4.4M? We obtained an OIC by which he paid $250k – 6¢ on the dollar – $1k a month for 23 months, and a balloon payment in month 24. No longer sad- dled with his misjudged expansion, he ran a mean and lean business for two years, which enabled him to save up for the nal payment.
For another businessman we ob- tained an o er of $160k as against $1.5M owed, 11¢ on the dollar. Con- sider another client who entered pleas to tax evasion and failure to le a tax return: he received probation, but owed IRS $800k for which an OIC was accepted for $55k, 7¢ on the dollar. Or another client, a lady who spent three years in prison on tax o enses before hiring TMG, owed $200k, and IRS accepted her o er of $1k: 5/10 of a penny on the dollar. Our medical pro- fessional client owes $1.5M but IRS recently accepted his partial pay IA by which he will pay a total of $240k. Another client, a medical doctor, was sentenced to sixteen months in prison for tax evasion prior to hiring TMG; the criminal case resulted in him ow- ing IRS $750k. Although IRS rejected his o er, it agreed to CNC, which our client readily accepted because he was by then retired and was glad to be n- ished with IRS. Likewise for another client who spent four years in prison
CIVIL AND CRIMINAL TAX CONTROVERSY ATTORNEYS NATHAN, MAC, AND SCOTT MACPHERSON.
ATTORNEY AT LAW MAGAZINE · PHOENIX· VOL. 11 NO. 3 24