e. martin davidoff & associates - cope seminars the irs.pdf · • seek penalty abatement types...

E. MARTIN DAVIDOFF & ASSOCIATES

ATTORNEY AT LAW

353 Georges Road - Suite K E. Martin Davidoff, CPA, ESQ. P.O. Box 835 Dayton, NJ 08810-0835

[email protected]

_____________

TEL: 732-274-1600 FAX: 732-274-1666

NAVIGATING THE IRS

Presented via

COPE Seminars

at

Mercer County Community CollegeEast Windsor, NJ - July 14, 2016

E. Martin Davidoff, CPA, Esq.

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mailto:[email protected]

Navigating the IRS - TABLE OF CONTENTS Cover Page and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 -2

Steps in a Controversy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Tools in Dealing with the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

The Rules of Engagement in Dealing with the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Alternatives in a Collection Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-8

IRS Tools & Considerations; The Key is Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Sample Engagement Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 - 14

Ethical Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 - 18

Sample Forms 2848 & 8821 - Representative Authorizations . . . . . . . . . . . . . . . . . . . . . . . . 19 - 24

Sample Letters 1058 & Request for a Collection Due Process Hearing (Form 12153) . . . . . 25 - 38

IRS Appeals in Collection Matters - CPA Magazine Article . . . . . . . . . . . . . . . . . . . . . . . . 39 - 40

Tools in Dealing with IRS Liens, Before and After . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Sample Collection Appeal Request (Form 9423) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 - 46

Securing Discharges of IRS Liens for Property Matters - CPA Magazine Article . . . . . . . 47 - 50

Documents related to the Fresh Start Program and IRS Advisory . . . . . . . . . . . . . . . . . . . . . 51 - 58

Lien Withdrawals and Credit Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 - 81

Streamlined Installment Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 - 84

Samples of Form 9465 & Form 433-D & Online Installment Plan . . . . . . . . . . . . . . . . . . . . 85 - 94

Another Alternative: Offer In Compromise Statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 - 96

Federal Tax Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Transcripts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 - 101

Quarterly Analysis of client Payroll tax returns filing and statements . . . . . . . . . . . . . . . . . . . . 102

Sample Cash Flow Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Sample Penalty Abatement and Penalty Abatement Appeal Letters . . . . . . . . . . . . . . . . . 104 - 106

Sample Request for Taxpayer Advocate Service Assistance (Form 911) & NJ Form 911 107 - 112

SB/SE Fast Track Audit Program & Agreement to Mediate Information . . . . . . . . . . . . . 113 - 121

Sample Letter re Payment of Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

Sample FOIA Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 - 128

Sample Request for Third Party Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

Sample Cash Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 - 131

Sample Examination Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 - 133

Sample Status Sheets, Initial Meeting Notes and Plan of Action . . . . . . . . . . . . . . . . . . . 134 - 138

Sample letters to Clients regarding successful Installment Agreement (2 styles). . . . . . . . 139 - 143

Sample letters to Clients regarding successful Offer In Compromise. . . . . . . . . . . . . . . . 144 - 145

Identity Theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 - 153

Articles on Representation of Clients & Rules of Engagement & Audits. . . . . . . . . . . . . 154 - 169

1. Getting Started . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 - 156

2. Being Authorized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 - 158

3. Rules of Engagement Part I (1-4) . . . . . . . . . . . . . . . . . . . . . . . . . . 159

4. Rules of Engagement Part II (5-6) . . . . . . . . . . . . . . . . . . . . . . . . . 160

5. Rules of Engagement Part III (7-8) . . . . . . . . . . . . . . . . . . . . . . . . . 161

6. Rules of Engagement Part IV (9-10) . . . . . . . . . . . . . . . . . . . . . . . . 162

7. Rules of Engagement Part V (11-13) . . . . . . . . . . . . . . . . . . 163 - 164

8. Rules of Engagement Part VI (14-19) . . . . . . . . . . . . . . . . . . 165 - 166

9. Steps of an Effective IRS Audit Resolution . . . . . . . . . . . . . 167 - 169

© Copyright 2016 E. Martin Davidoff (U.S.A.) All Rights Reserved

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Steps in a Controversy

1. Initial contact by the Client and follow-up calls with prospective client to find out generalnature of their problem, “sell” the firm, and schedule a consultation.

2. Initial Consultation with client to understand his/her dilemma and outline a preliminary planof action.

3. Agree to what services you will provide and how you will get paid. Execute an engagementletter. (See pgs 12 through 14).

4. Get authorization to represent your client (Forms 2848, 8821, Oral TIAA, etc. See IRSpublication at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Third-Party-Authorization-Purpose). (See pgs 19 through 24 and 157 through 158.)

5. Put forth a written Plan of Action with the client and your staff. (See pgs 134 through 137).

6. Put together a list of materials for your client to gather.

7. Transmit authorizations to CAF and to Revenue Officer, if applicable.

8. Get records of account/account transcripts and prepare a federal tax summary. (See pg 97)

9. Make certain client is staying current on all taxes going forward. Sometimes this mayrequire the client engaging a payroll tax service with a Tax-Pay service.

10. Follow Plan of Action and gather all materials.

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Tools in Dealing with the IRS

1. Going up the chain of command:

North Atlantic (NA) & Central Area (NJ) Managers, SB/SE- Collections (NA Director) Tim Sherrill 414-231-2404- Collections (Central Director) Renee Mitchell 614-280-8611

(John Rice, Assistant)- Examination (NA Director) Joseph Tiberio 617-316-2539- Examination (Central Director) John Imhoff 267-941-6159

2. Form 12153, Collection Due Process Hearing (See pgs 32 through 37.)

3. Form 9423, Collection Appeal Request (See pgs 42 through 46.)

4. Appealing denials of Penalty Abatement requests & Examination Findings (See pgs 104through 106.)

5. Taxpayer Advocate's Office - (Form 911) - (See pgs 107 through 112)- Manhattan: Kevin Kelly 212-436-1010- Brooklyn, NY Mark Newman 718-834-2210- New Jersey Justin Axelford 973-921-4376- Philadelphia Lois Lombardo 215-861-1237

6. Fast Track Mediation/Settlement (See Publication 4167)

7. Designation of Trusts Fund (See pg 122)

8. Record of Third Party Contacts (See pg 129)

9. Freedom of Information Requests (“FOIA”) (See pg 123 through 128)

10. Deposit in the Nature of a Cash Bond (See pgs 130 through 131)

11. IRS Website & E-Services

12. Your Analysis of the Client’s Situation (see pages 102 & 103 regarding Quarterly Analysisand Cash Flow)

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The Rules of Engagement in Dealing with the IRS

(See pages 159 through 166 )

1. Never volunteer information, unless it is part of a strategy.

2. Never give materials to the IRS that you have not reviewed carefully (e.g., bank statements, paycheckstubs, etc.).

3. Assert yourself as appropriate. Learn how to say:

“Please give me your full name and employee ID number.”

"Please give me the name and telephone number of your manager."

"Who is the Territory manager?"

"What is your authority for that position?"

"I want to take that issue to Fast Track Mediation"

"Are you refusing to provide that information to me?"

4. Always ask for the full name and employee ID of the IRS representative.

5. Never Lie. Period.

6. Do not accept unreasonable time-lines.

7. Do not agree to terms that your client cannot meet.

• Carefully review and understand your client's budget; and

• Build in additional time, anticipate client delays.

8. Current Taxes Get Paid First!

9. Meet all commitments made to the IRS...or at least call.

10. Do not let Appeal Deadlines pass without preserving your client's rights.

11. Carefully read and fully understand all IRS communications.

12. Set ticklers and followup. Never just wait for the IRS to contact you. Know your case's status.

13. Confirm all examination computation through tax software.

14. Be realistic with your client. Promise less than you expect, deliver more than anticipated.

15. Confirm all oral agreements with the IRS in writing and request that they sign off.

16. When you win, say “thank you” and “goodbye!”

17. Pull transcripts and summarize them. (See page 98 through 102.)

18. Be fully prepared for all meetings....anticipate the unexpected.

19. Know your tools and rights (see previous page).

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Alternatives in a Collection Matter

I. Pay all that is due• Refinance home• Loans from family [Can still seek penalty abatement]• Liquidate assets

II. Pay tax & interest only• Seek penalty abatement Types of Penalty Abatement

i Revenue Officer U First Time (IRM § 20.1.1.3.6.1)i Taxpayer Advocate U Reasonable Causei Service Centeri Telephone (note script)i Priority Practitioner Hotline

Note: IRS “rule” to pay all tax prior to considering late payment penalty abatements.

III. Uncollectible status• Reviewed periodically

IV. Partial pay installment agreement

V. Full-pay installment agreement• Streamlined: < $50,000 assessed

Pay within 6 years or less No financial documentation required

VI. Offer in Compromise

VII. Special Considerations

• Bankruptcy• Expiring Statutes• Innocent Spouse• Missing/Misapplied Payments• Transfer of assets for less than adequate consideration• Identity Theft

Common Threads to Installment Agreements

1. Up front consideration

2. Lien Filing or holding off thereon

3. Increasing payments with time

4. Date of Payment/Direct Debit

5. Communicate to client in writing (see samples - pgs 139 through 145)

6. The role of Reasonable Collection Potential

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1

Alternatives in a Collection MatterFRESH START/STREAMLINED AGREEMENTS

• STREAMLINED INSTALLMENT AGREEMENTS

REQUIRED FINANCIAL DISCLOSURES:

• Up to $25,000: None

• Over $25,000: None • 2nd Page of Form 9465 :

- Financial disclosure as of Jan 2014; required if one has defaulted on an installment agreement within the past 12 months.

-Provides essential financial information to assure to the IRS that the Taxpayer CAN make the monthly payments promised.



$50,000 or less ASSESSED! Full Pay within 72 Months Must be Equal Monthly Installments Must be Direct Debit if over $25,000 Must be otherwise compliant May “Pay Down” to qualify Any type of tax due by Individuals (1040; Trust)

IRS Claims can do this all online!

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IRS Tools & Considerations

A. Financial Disclosure:• Form 433A Form 433A (OIC)• Form 433B Form 433B (OIC)• Form 433F Form 9465

B. Liens

C. Levy/Garnishment

D. Primary Considerations• Keep Current• Disclose Financial Information• Plan to deal with debt to the IRS

The Key is Time

Time as a Friend

A. Time to determine appropriate course of action

B. Time to get Client to take that action

• Payroll• Estimates• Filing of Returns• Verification of Financial Position• Documentation of all of the above

C. Time to get the IRS to come to “our” way of thinking on the case. Specifically, we need time to:

• Present financial information• Present facts regarding penalty abatement• Involvement of IRS management• Involvement of Appeals• Involvement of the Taxpayer Advocate Service• File Returns

D. Time for the Statute to Expire

Time as an Enemy

A. Appeal RightsB. Tax Court Petition DeadlinesC. IRS Arbitrary (non-statutory) DeadlinesD. The next payroll date during garnishmentE. Stress builds with time as matter remains unresolved

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E. MARTIN DAVIDOFF

ATTORNEY AT LAW

353 Georges Road - Suite KP.O. Box 835

Dayton, NJ 08810-0835 [email protected] _____________

TEL: 732-274-1600 FAX: 732-274-1666

VIA E-MAIL January 2, 2016Mr. Ralph Terry41 ABC AvenueMetuchen, New Jersey 08840

RE: Consultation AdviceDear Mr. Terry:

I am writing this letter to confirm and specify the financial arrangements regarding the services which I willbe providing to you. I will be providing advice to you regarding federal and/or state taxation issues. I may alsoprovide other services which you request.

My fees are based upon the amount of time required to meet or speak with you and to review and analyzeinformation that you provide to me. In addition, you will be charged for my or my staff's time with respect tofollow-up calls, meetings and other services requested. My current hourly consultation rate is $600. The hourlyrates for my staff range from $60 to $400. All rates will increase from time to time consistent with the ratescharged generally to the firm’s tax controversy clients. Also, you will be charged for out-of-pocket expenses(photocopying, federal express, postage, etc.) As a courtesy for your referral through Mr. Bill Stafford, there willbe no charge for the first 15 minutes of this initial consultation. If the matter requires extended, involved work,a separate engagement letter will usually be required, as well as a retainer.

In the unlikely event that it becomes necessary for me to seek legal recourse to receive payment of my feesthrough litigation or arbitration, you hereby agree to reimburse me for all out-of-pocket expenses, as well as anyof the time expended by my staff and/or me at the hourly rates then in effect, to secure such payment. Forpurposes of our agreement, the term "out-of-pocket expenses" also includes any legal fees and all other expensesin connection with any attempt (including litigation) to collect my fees. By signing below, you hereby consentthat I may use any information which you provide me to collect any fees due to this firm. Such informationincludes income tax returns which we prepare for you or which you provide us.

If the terms outlined in this letter are in agreement with your understanding of our engagement, pleasesign this letter and complete the enclosed credit card authorization, if appropriate, to facilitate our phone or in-person conference, then fax or email these documents back to our office. Your card will be billed at the ratesspecified above for the appropriate increment of time for this and future consultation meetings.

I look forward to working with you.

EMD:jcencls.Agreed to by: ___________ Ralph Terry Date

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E. MARTIN DAVIDOFF

ATTORNEY AT LAW


Dayton, NJ 08810-0835 [email protected] _____________

TEL: 732-274-1600 FAX: 732-274-1666

January 2, 2016

Mr. Ralph Terry41 ABC AvenueMetuchen, New Jersey 08840

Dear Mr. Terry:

If applicable, please fill out the information below, including signature, and bring to the meeting sothat we may charge your credit card appropriately after the meeting. Feel free to call us should you haveany questions.

Thank you.

I hereby authorize E. Martin Davidoff, Attorney at Law to charge my account pursuant to the terms of theaccompanying engagement letter.

Name on Card : ___________________________________

Check one: MasterCard Visa American Express

*NOTE: If you are using an American Express card, an additional 1% of the charged amountwill be added to offset the American Express Merchant processing fee.

Credit Card Number__________________________________________

VIN Code (3 digit code on back)________________________________

Expiration Date_____________________________________________

_________________________________________ ______________________Ralph Terry Date

__________________________________________________________________________________Full Billing Address of Card

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E. MARTIN DAVIDOFF

ATTORNEY AT LAW

353 Georges Road - Suite KAndrew G. Paradis, Esq. P.O. Box 835 Associate Dayton, NJ 08810-0835

[email protected] _____________

TEL: 732-274-1600 FAX: 732-274-1666

January 2, 2016

BY HAND IN OUR OFFICEMr. & Mrs. Mickey Mantle123 Main StreetAnywhere, New Jersey 08666

Dear Mr. & Mrs. Mantle:

We are writing this letter to confirm and specify the financial arrangements regarding the services whichI will be providing to you. We will be representing XYZ Corporation before the Internal Revenue Service("IRS") in connection with the assessment and collection of Payroll taxes for the years 2009 through 2011. We will be representing you, personally, before the IRS in connection with the assessment and collection ofincome taxes for the years 2009 through 2012, for trust fund recovery penalties proposed by the IRS and forother years and matters in the event that the IRS expands the scope of its investigation. I may also provideother services which you request.

As we have discussed, our representation is strictly limited to the government agency above. It is notour practice to investigate beyond this specific agency . However, should you require our representation onother matters at a later date, we would be glad to consider such requests provided to us in writing.

Our fees are based upon the amount of time required to review and analyze information provided to us,perform necessary research, carry out additional services in representing you, and complete additionalservices which you request. My current hourly rate is $600. The hourly rates for our staff range from $60to $400. The principal member of our staff who will be working on the case is Ms. Susan Smith, and herhourly rate is $275. All rates will increase from time to time consistent with the rates charged generally tothe firm’s tax controversy clients. In addition, you will be charged for out-of-pocket expenses (photocopying,federal express, postage, etc.)

I will require an initial retainer of $3,500 prior to commencing work. The $3,500 will be held in ourbusiness account and will be applied towards your final invoice. During the course of our engagement, youwill receive invoices periodically. Our invoices are due and payable immediately upon receipt. There willbe a late charge equal to 1.5% per month on any unpaid balances. Please note that, at our option, the workon your account will cease at anytime after any invoice of ours remains unpaid for a period of 10 days, unlessother mutually satisfactory arrangements have been made in writing.

We have also agreed to provide you with additional flexibility with respect to the payment of fees dueto this firm. So long as you make monthly payments of $350 on the first of each month, commencing withFebruary 1, 2016, we will continue to work on your account and we will waive any late charges. Please notethat, even if we have not yet issued our first invoice, the first payment of $350 is still expected to be madeon or before February 1, 2016 . Any balance due and payable as of February 1, 2018 shall become due andpayable immediately.

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Mr. & Mrs. Mickey MantleJanuary 2, 2016Page 2

Although you may find it convenient and appropriate that we invoice XYZ Corporation for some or allof our services, you will be personally responsible for the payment of any of our invoices issued to thecorporation and/or you.

You have a role in assisting us in your representation. It is your obligation to respond timely andtruthfully to our inquiries. Often such inquiries will relate to answering financial related questions. Othertimes, our inquiries may relate to facts and circumstances which will assist us in securing an abatement oftaxes or penalties. We reserve the right to terminate this engagement if you fail to timely respond to ourinquiries and/or accurately portray your compliance history and communications with the taxing authority.

You have the right to terminate our engagement at any time. To do so, please send us your request toterminate the firm’s services in writing. Of course, we encourage you to speak directly to us as to the reasonsfor termination and to assist in the transition of the case to new counsel, if applicable. Upon receipt of yourwritten request, we will wrap-up services on your account to ensure that the current status of the case is fullydocumented and to provide you any documents in our file that you request. In a reasonable time thereafter,we will issue our final invoice and apply any remaining funds from the advance payment against thebalance. We will refund any unused portion of your advance payment and expect prompt payment of anybalance due after application of the advance payment.

In the unlikely event that it becomes necessary for us to seek legal recourse to receive payment of our feesthrough litigation or arbitration, you hereby agree to reimburse us for all out-of-pocket expenses, as well asany of the time expended by our staff at the hourly rates then in effect, to secure such payment. For purposesof our agreement, the term "out-of-pocket expenses" also includes any legal fees and all other expenses inconnection with any attempt (including litigation) to collect our fees. By signing below, you hereby consentthat we may use any information which you provide us to collect any fees due to this firm. Such informationincludes income tax returns which we prepare for you or which you provide us.

We are aware that you have been working with Tony Kubek, CPA, with respect to this case. You herebyacknowledge that we will be working with Mr. Kubek and you hereby give us permission to discuss your casewith and provide copies of documents, correspondence and invoices to Mr. Kubek.

If the terms outlined in this letter are in agreement with your understanding of our engagement, youshould sign the enclosed copy of this letter and return it to us as soon as possible along with the $3,500payment. By signing below you are each also agreeing to be jointly and individually responsible for theentire amount of our fees. Should you have any questions concerning this letter or the fees to be charged,please do not hesitate to contact us.

To facilitate our representation, you will find the following documents in your secure portal:

1. Form 2848 Power of Attorney which will enable us to represent you each (required separatelyby the IRS for each spouse) before the Internal Revenue Service

2. Form 8821 Tax Information Authorization for you each (required separately by the IRS for eachspouse) which will enable other members of our staff to discuss your case with the InternalRevenue Service

3. Form 2848 Power of Attorney which will enable us to represent XYZ Corporation before theInternal Revenue Service

4. Form 8821 Tax Information Authorization for you each which will enable other members of ourstaff to discuss XYZ Corporation's case with the Internal Revenue Service

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Mr. & Mrs. Mickey MantleJanuary 2, 2016Page 3

Please sign two copies of each form and return them to us. You may retain the third copy for your files.

You have agreed to comply with all federal and state tax laws going forward on a timely basis. To thatend, you will be placing the payroll with Paychex and authorizing them to withdraw payroll taxes with eachpayroll (their "Tax Pay" service).

We look forward to working with you.

Very truly yours,

E. Martin Davidoff

EMD:

Agreed to by: U __________ Mickey Mantle Date

U Merlyn Mantle Date

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Ethical ConsiderationsContext: Financial Disclosure:• Q: Do you own any property? A: Not in my name!

• Backstory:Client gives home to children. Agreement with family is parents get $$$s from sale. Whose property.

• How do you present on Form 433?

Ethical Considerations

• Alternate Scenario:Parents purchase home for adult son and retain in their name.

• How do you present on son’s Form 433?

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Ethical ConsiderationsAdditional Facts:• Son makes all mortgage payments• Parents claim interest and real estate taxes• Son pays all expense on property, including

real estate taxes and insurance (through the mortgage).

• No Lease between the parties, no rental income claimed by parents.

• Family views the property as the son’s.

Ethical Considerations

Opinions on Options• Report as son’s asset on his Form 433-A?• Lease between parents and son?• Will to make clear that property will go to

son?• In reality, whose house is this?

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Ethical ConsiderationsIRS VIEW:

• If son sells and claims principal residence exclusion, IRS will likely state son does not qualify as he does not own property.

• If all facts were disclosed in son’s OIC, IRS would likely claim that son is owner.

• Is either view totally “right”?

Steps In A Controversy (see materials, pg 3)

1. Initial call with prospective client to find out general nature of their problem and “sell” the firm.

2. Preliminary meeting with client to understand his/her dilemma.

3. Agree to what services you will provide and how you will get paid. Execute an engagement letter.

4. Get authorization to represent your client (Forms 2848, 8821, Oral TIAA, etc.)

5. Put forth a written Plan of Action with the client and your staff and possibly a Status Sheet.

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Form 8821• Allow Access to Account Information by

NON-CPAs!• Allows your secretary to get transcripts!• Future is for 8821 to Use E-Services

• Disclosure Authorization Still Closed Down! – Clients Get Transcripts?

• Clients – Getting Transcripts Online.

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E. MARTIN DAVIDOFF & ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS353 Georges Road - Suite K

E. Martin Davidoff, CPA, ESQ. P.O. Box 835 Robbin R. Weiner, CPA,CGMA Dayton, NJ 08810-0835

[email protected] _____________ TEL: 732-274-1600 FAX: 732-274-1666

FAX TRANSMITTAL SHEET

DATE: Feb 1, 2016 TIME:

PLEASE DELIVER THE FOLLOWING PAGES TO:NAME: IRS - CAF

TELEPHONE NUMBER: 901-546-4176

TELECOPIER NUMBER: 901-546-4115

TOTAL NUMBER OF PAGES INCLUDING COVER: 4

Following you will find Form 2848 (Power of Attorney and Declaration of Representative)and Form 8821 (Tax Information Authorization) for John J. Doe to be input into the CAF system.

Please do not hesitate to contact E. Martin Davidoff if you should ha ve any questions orcomments.

Sincerely,

Sarah A. FieldsEnrolled Agent

IF YOU DO NOT RECEIVE ALL THE PAGES OR THERE IS A PROBLEM, PLEASE CALL (732) 274-1600 ANDASK FOR SARAH.

G Confirmed by: _________

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Form 2848Department of the Treasury Internal Revenue Service

(Rev. Dec. 2015)

Power of Attorney and Declaration of Representative

Information about Form 2848 and its instructions is at www.irs.gov/form2848.

OMB No. 1545-0150

For IRS Use Only

Received by:

Name

Telephone

Function

Date / /

Part I Power of Attorney Caution: A separate Form 2848 must be completed for each taxpayer. Form 2848 will not be honored for any purpose other than representation before the IRS.

1 Taxpayer information. Taxpayer must sign and date this form on page 2, line 7.

Taxpayer name and address Taxpayer identification number(s)

Daytime telephone number Plan number (if applicable)

hereby appoints the following representative(s) as attorney(s)-in-fact:

2 Representative(s) must sign and date this form on page 2, Part II.

Name and address

Check if to be sent copies of notices and communications

CAF No.

PTIN

Telephone No.

Fax No. Check if new: Address Telephone No. Fax No.

Name and address

Check if to be sent copies of notices and communications

CAF No.

PTIN

Telephone No.


Name and address

(Note: IRS sends notices and communications to only two representatives.)

CAF No.

PTIN

Telephone No.


Name and address

(Note: IRS sends notices and communications to only two representatives.)

CAF No.

PTIN

Telephone No.


to represent the taxpayer before the Internal Revenue Service and perform the following acts:

3 Acts authorized (you are required to complete this line 3). With the exception of the acts described in line 5b, I authorize my representative(s) to receive and inspect my confidential tax information and to perform acts that I can perform with respect to the tax matters described below. For example, my representative(s) shall have the authority to sign any agreements, consents, or similar documents (see instructions for line 5a for authorizing a representative to sign a return).

Description of Matter (Income, Employment, Payroll, Excise, Estate, Gift, Whistleblower, Practitioner Discipline, PLR, FOIA, Civil Penalty, Sec. 5000A Shared Responsibility

Payment, Sec. 4980H Shared Responsibility Payment, etc.) (see instructions)

Tax Form Number (1040, 941, 720, etc.) (if applicable)

Year(s) or Period(s) (if applicable) (see instructions)

4 Specific use not recorded on Centralized Authorization File (CAF). If the power of attorney is for a specific use not recorded on CAF, check this box. See the instructions for Line 4. Specific Use Not Recorded on CAF . . . . . . . . . . . . . . .

5a Additional acts authorized. In addition to the acts listed on line 3 above, I authorize my representative(s) to perform the following acts (see instructions for line 5a for more information):

Authorize disclosure to third parties; Substitute or add representative(s); Sign a return;

Other acts authorized:

For Privacy Act and Paperwork Reduction Act Notice, see the instructions. Form 2848 (Rev.12-2015)

ISA

John J. Doe123 Main StreetAnywhere, NJ 08666

123-45-6789

732-274-1600 (ATTY)

E. Martin Davidoff, CPA, Esq.P.O. Box 835Dayton, New Jersey 08810-0835

X

0000-00-000RP00000001

732-274-1600732-274-1666

Robbin R. Weiner, CPAP.O. Box 835Dayton, New Jersey 08810-0835

0000-00-000RP00000002

732-274-1600732-274-1666

Melanie Cobb, CPAP.O. Box 835Dayton, New Jersey 08810-0835

0000-00-000RP00000003

732-274-1600732-274-1666

Sarah A. Fields, EAP.O. Box 835Dayton, New Jersey 08810-0835

0000-00-000RP00000004

732-274-1600732-274-1666

Income 10402005 through 2019All Years Included

Civil Penalty N/A01/01/2006 through 12/31/2019All Quarters Included

See attached for additional representatives (total 6 representatives)

**Each Spouse Executes Separate Powers **

NEW FORM Dec 2015! of 169

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Form 2848 (Rev. 12-2015) Page 2

b Specific acts not authorized. My representative(s) is (are) not authorized to endorse or otherwise negotiate any check (including directing or accepting payment by any means, electronic or otherwise, into an account owned or controlled by the representative(s) or any firm or other entity with whom the representative(s) is (are) associated) issued by the government in respect of a federal tax liability.

List any other specific deletions to the acts otherwise authorized in this power of attorney (see instructions for line 5b):

6 Retention/revocation of prior power(s) of attorney. The filing of this power of attorney automatically revokes all earlier power(s) of attorney on file with the Internal Revenue Service for the same matters and years or periods covered by this document. If you do not want to revoke a prior power of attorney, check here . . . . . . . . . . . . . . . . . . . . . . . . . . YOU MUST ATTACH A COPY OF ANY POWER OF ATTORNEY YOU WANT TO REMAIN IN EFFECT.

7 Signature of taxpayer. If a tax matter concerns a year in which a joint return was filed, each spouse must file a separate power of attorney even if they are appointing the same representative(s). If signed by a corporate officer, partner, guardian, tax matters partner, executor, receiver, administrator, or trustee on behalf of the taxpayer, I certify that I have the legal authority to execute this form on behalf of the taxpayer.

IF NOT COMPLETED, SIGNED, AND DATED, THE IRS WILL RETURN THIS POWER OF ATTORNEY TO THE TAXPAYER.

Signature

Print Name

Date Title (if applicable)

Print name of taxpayer from line 1 if other than individual

Part II Declaration of Representative Under penalties of perjury, by my signature below I declare that:

• I am not currently suspended or disbarred from practice, or ineligible for practice, before the Internal Revenue Service;

• I am subject to regulations contained in Circular 230 (31 CFR, Subtitle A, Part 10), as amended, governing practice before the Internal Revenue Service;

• I am authorized to represent the taxpayer identified in Part I for the matter(s) specified there; and

• I am one of the following:

a Attorney—a member in good standing of the bar of the highest court of the jurisdiction shown below.

b Certified Public Accountant—licensed to practice as a certified public accountant is active in the jurisdiction shown below.

c Enrolled Agent—enrolled as an agent by the Internal Revenue Service per the requirements of Circular 230.

d Officer—a bona fide officer of the taxpayer organization.

e Full-Time Employee—a full-time employee of the taxpayer.

f Family Member—a member of the taxpayer’s immediate family (spouse, parent, child, grandparent, grandchild, step-parent, step-child, brother, or sister).

g Enrolled Actuary—enrolled as an actuary by the Joint Board for the Enrollment of Actuaries under 29 U.S.C. 1242 (the authority to practice beforethe Internal Revenue Service is limited by section 10.3(d) of Circular 230).

h Unenrolled Return Preparer—Authority to practice before the IRS is limited. An unenrolled return preparer may represent, provided the preparer (1) prepared and signed the return or claim for refund (or prepared if there is no signature space on the form); (2) was eligible to sign the return or claim for refund; (3) has a valid PTIN; and (4) possesses the required Annual Filing Season Program Record of Completion(s). See Special Rules and Requirements for Unenrolled Return Preparers in the instructions for additional information.

k Student Attorney or CPA—receives permission to represent taxpayers before the IRS by virtue of his/her status as a law, business, or accounting student working in an LITC or STCP. See instructions for Part II for additional information and requirements.

r Enrolled Retirement Plan Agent—enrolled as a retirement plan agent under the requirements of Circular 230 (the authority to practice before the Internal Revenue Service is limited by section 10.3(e)).

IF THIS DECLARATION OF REPRESENTATIVE IS NOT COMPLETED, SIGNED, AND DATED, THE IRS WILL RETURN THE POWER OF ATTORNEY. REPRESENTATIVES MUST SIGN IN THE ORDER LISTED IN PART I, LINE 2.

Note: For designations d-f, enter your title, position, or relationship to the taxpayer in the "Licensing jurisdiction" column.

Designation—Insert above letter (a–r).

Licensing jurisdiction (State) or other

licensing authority (if applicable).

Bar, license, certification, registration, or enrollment

number (if applicable). Signature Date

Form 2848 (Rev. 12-2015)

John J. Doe

a New Jersey 0101010101

b New Jersey 20CC00000000

b New Jersey 20CC00000001

c IRS 00100000-EA

T T Sign Here7**Note no PIN **

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Form 8821(Rev. March 2015)

Department of the Treasury Internal Revenue Service

Tax Information AuthorizationInformation about Form 8821 and its instructions is at www.irs.gov/form8821.

Do not sign this form unless all applicable lines have been completed. Do not use Form 8821 to request copies of your tax returns

or to authorize someone to represent you.

OMB No. 1545-1165

For IRS Use Only

Received by:

Name

Telephone

Function

Date

1 Taxpayer information. Taxpayer must sign and date this form on line 7. Taxpayer name and address Taxpayer identification number(s)

Daytime telephone number Plan number (if applicable)

2 Appointee. If you wish to name more than one appointee, attach a list to this form. Check here if a list of additional appointees is attached

Name and address CAF No. PTIN Telephone No. Fax No.

Check if new: Address Telephone No. Fax No. 3 Tax Information. Appointee is authorized to inspect and/or receive confidential tax information for the type of tax, forms,

periods, and specific matters you list below. See the line 3 instructions. (a)

Type of Tax Information (Income, Employment, Payroll, Excise, Estate, Gift, Civil Penalty, Sec. 4980H Payments, etc.)

(b) Tax Form Number

(1040, 941, 720, etc.)

(c) Year(s) or Period(s)

(d) Specific Tax Matters

4 Specific use not recorded on Centralized Authorization File (CAF). If the tax information authorization is for a specific use not recorded on CAF, check this box. See the instructions. If you check this box, skip lines 5 and 6 . . . . . .

5 Disclosure of tax information (you must check a box on line 5a or 5b unless the box on line 4 is checked):

a If you want copies of tax information, notices, and other written communications sent to the appointee on an ongoing basis, check this box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Note. Appointees will no longer receive forms, publications, and other related materials with the notices.b If you do not want any copies of notices or communications sent to your appointee, check this box . . . . . . .

6 Retention/revocation of prior tax information authorizations. If the line 4 box is checked, skip this line. If the line 4 box is not checked, the IRS will automatically revoke all prior Tax Information Authorizations on file unless you check the line 6 box and attach a copy of the Tax Information Authorization(s) that you want to retain. . . . . . . . . . . . .

To revoke a prior tax information authorization(s) without submitting a new authorization, see the line 6 instructions.

7 Signature of taxpayer. If signed by a corporate officer, partner, guardian, executor, receiver, administrator, trustee, or party other than the taxpayer, I certify that I have the authority to execute this form with respect to the tax matters and tax periods shown on line 3 above.

IF NOT COMPLETE, SIGNED, AND DATED, THIS TAX INFORMATION AUTHORIZATION WILL BE RETURNED.

DO NOT SIGN THIS FORM IF IT IS BLANK OR INCOMPLETE.

Signature Date

Print Name Title (if applicable)

For Privacy Act and Paperwork Reduction Act Notice, see instructions. Form 8821 (Rev. 3-2015)

ISA

John J. Doe123 Main StreetAnywhere, NJ 08666

123-45-6789

732-274-1600 (atty)

The Firm of E. Martin Davidoff, Attorney at LawP.O. Box 835Dayton, New Jersey 08810-0835

0300-00000R

732-274-1600732-274-1666

Income 1040 All Years Included N/A

Civil Penalty N/A All Quarters Included

X

John J. Doe

REFER TO IRM SECTION 21.3.7.5.1 (09-11-2015): "If a business entity is named as an appointee, this will include all employees of the named business entity and a list is not required.

Sign Here7T T

2005 through 2019

01/01/2006 hrough 12/31/2019

New Fom March 2015

**Each Spouse ExecutesSeparate Powers**

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Page 22 of 169

Sarah

Line

Sarah

Line

Excerpts from the Internal Revenue Manual at www.irs.gov

21.3.7.1 (09-11-2015) Third Party Authorization3. Different types of authorization authority are:

Representative - An individual that the taxpayer has authorized to represent them before theIRS. [EMD note: pertains to a valid Form 2848, Power of Attorney and Declaration ofRepresentative or Form 706, U.S. Estate Tax Return.]

Appointee - An individual person or business entity the taxpayer appoints to receive andinspect confidential tax return information. [EMD note: pertains to a valid Form 8821,Tax Information Authorization.]

Designee - An individual person that has been designated to receive and inspect confidentialtax return information via telephone or Check-box election on a tax return.

21.3.7.5 (09-11-2015)Form 2848, Power of Attorney and Declaration of Representative andForm 8821, Taxpayer Information Authorization Overview

1. Form 2848, Power of Attorney and Declaration of Representative can only be granted to anindividual eligible to practice before the Internal Revenue Service. For information onPowers of Attorney see IRS Publication 947, Practice Before the IRS and Power ofAttorney.

2. Form 8821, Tax Information Authorization, or equivalent, can appoint any third party toreceive and inspect account information for the tax matter(s) specified.

21.3.7.5.1 (09-11-2015) Essential Elements for Form 2848 and Form 8821 1. There are five essential elements needed to process the Form 2848 and/or Form 8821...4. Essential elements are:A. Essential element 1 The taxpayer's dated signature is required. An electronically signed,

printed or stamped signature is not acceptable..

EMD COMMENT: Form 8821,Tax Information Authorization, or equivalent, can designateany third party to receive and inspect account information for the tax matter(s) specified.

• Can be granted to an individual.• Can be granted to a business entity or firm (legal, accounting, tax preparation,

etc). When a business is the appointee, authority extends to the employees ofthe business.

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Excerpts from the Internal Revenue Manual at www.irs.gov

(Continued)

When the taxpayer signs and dates the Form 2848 before the representative, the signaturedates of the taxpayer(s) and representative(s) must be within 45 days for domesticauthorizations...

B. Essential element 2 - Only applies to Form 2848. The representative's designationunder which he or she is authorized to practice before the IRS must be present. Inaddition, the representative must list the Licensing jurisdiction (state) or other licensingauthority and Bar, license, certification, registration or enrollment number, if applicable. The representative’s signature and date are also required. For multiple representativeslisted on the same form, only one signature date is required; however, all representativesmust sign the Form 2848.

C. Essential element 3 - Specific tax matter(s), i.e., type of tax or tax form number, isrequired.

D. Essential element 4 - Clear identification of the taxpayer, i.e., name, address, taxpayeridentification number is required. The presence of two of the three identifiers is sufficient.Research can be done to locate the third identifier.

E. Essential element 5 - Clear identification of the third party, i.e., name and address isrequired. A CAF number is not required.

Instructions for Form 2848 (Rev. December 2015)

& 8821 (Rev. March 2015)

Power of Attorney and Declaration of Representative (Form 2848)

Joint returns. Joint filers must now complete and submit separate individual to receiveand inspect your confidential tax information.

Tax Information Authorization (Form 8821)

Each individual and/or entity must now file and sign a separate Form 8821.

EMD COMMENT: Forms 8821, Tax Information Authorization, for the purpose of addressingtax matters, do not have to be received within 60 days of the taxpayer's dated signature. See IRM11.3.3.1.1(4), General Requirements for Disclosure to Designee . The taxpayer must sign anddate a TIA. The third party is not required to sign a TIA.

EMD COMMENT: Our firm’s practice for multiple years (on Forms 8821 or 2848) is to put,for example: “2003 through 2009

All Years Included”

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Page 31 of 169

E. MARTIN DAVIDOFF

ATTORNEY AT LAW353 Georges Road - Suite K

P.O. Box 835Dayton, NJ 08810-0835

[email protected]_____________TEL: 732-274-1600FAX: 732-274-1666

February 3, 2016

VIA CERTIFIED MAIL #7008281000011969999Internal Revenue ServiceACS SupportP.O. Box 57Bensalem, Pennsylvania 19020-0057

RE: Bob Turley SS#: 123-45-6789Forms 1040; 2012, 2013 and 2014 Forms 941: 3/31/13 through 9/30/14

To Whom It May Concern:

We represent the above-named Taxpayer and are in receipt of your Final Notice of Intent to Levy (Letter 1058) dated January 29, 2016 for the above-referenced Taxpayer for the above-referenced tax periods. To that end, please find enclosed Form 12153, Request for a Collection Due Process Hearing along with Form 2848 empowering me to act on behalf of the Taxpayer.

We respectfully request that our Collection Due Process Hearing be held in person with an Appeals Officerat the Newark, New Jersey, Philadelphia, Pennsylvania or New York City, New York Appeals Office of theInternal Revenue Service.

Thank you very much for your attention to this matter.

Very truly yours,

E. Martin Davidoff

EMD:rb

encls.

cc: Mr. Bob Turley (via first class mail and e-mail w/encls.)

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Form 12153(Rev. 12-2013)

Request for a Collection Due Process or Equivalent Hearing

Form 12153 (Rev. 12-2013) www.irs.gov Department of the Treasury - Internal Revenue Service

Use this form to request a Collection Due Process (CDP) or equivalent hearing with the IRS Office of Appeals if you have been issued one of the following lien or levy notices:

• Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320,• Notice of Intent to Levy and Notice of Your Right to a Hearing,• Notice of Jeopardy Levy and Right of Appeal,• Notice of Levy on Your State Tax Refund,• Notice of Levy and Notice of Your Right to a Hearing.

Complete this form and send it to the address shown on your lien or levy notice. Include a copyof your lien or levy notice to ensure proper handling of your request.

Call the phone number on the notice or 1-800-829-1040 if you are not sure about the correct address or if you want to fax your request.

You can find a section explaining the deadline for requesting a Collection Due Process hearing in this form's instructions. If you've missed the deadline for requesting a CDP hearing, you must check line 7 (Equivalent Hearing) to request an equivalent hearing.

1. Taxpayer Name: (Taxpayer 1)

Taxpayer Identification Number

Current Address

City State Zip Code

2. Telephone Number and Best Timeto Call During Normal BusinessHours

Home am. pm.

Work am. pm.

Cell am. pm.

3. Taxpayer Name: (Taxpayer 2)

Taxpayer Identification Number

Current Address(If Different from Address Above) City State Zip Code

4. Telephone Number and Best Timeto Call During Normal BusinessHours

Home am. pm.

Work am. pm.

Cell am. pm.

5. Tax Information as Shown on the Lien or Levy Notice (If possible, attach a copy of the notice)

Type of Tax (Income,Employment, Excise,etc. or Civil Penalty)

Tax Form Number(1040, 941, 720, etc)

Tax Period or Periods

ISA

Bob Turley

123-45-6789

123 Main Street

Anywhere NJ 08666

732-274-1600 6:00 X

Jane Turley

987-65-4321

732-274-1600 6:00 X

Income 1040 2012, 2013 & 2014

Employment 9413/31/13 through 9/30/14 ALL QUARTERS INCLUDED

(Attorney phone)

(Attorney phone)

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Form 12153(Rev. 12-2013)

Request for a Collection Due Process or Equivalent Hearing

Form 12153 (Rev. 12-2013) www.irs.gov Department of the Treasury - Internal Revenue Service

6. Basis for Hearing Request (Both boxes can be checked if you have received both a lienand levy notice)

Filed Notice of Federal Tax Lien Proposed Levy or Actual Levy

7. Equivalent Hearing (See the instructions for more information on Equivalent Hearings)

I would like an Equivalent Hearing - I would like a hearing equivalent to a CDP Hearing if my request for a CDP hearing does not meet the requirements for a timely CDP Hearing.

8. Check the most appropriate box for the reason you disagree with the filing of the lien or the levy. See page 4 of this form for examples. You can add more pages if you don't have enough space.

If, during your CDP Hearing, you think you would like to discuss a Collection Alternative to the action proposed by the Collection function it is recommended you submit a completed Form 433A (Individual) and/or Form 433B (Business), as appropriate, with this form. See www.irs.govfor copies of the forms. Generally, the Office of Appeals will ask the Collection Function to review, verify and provide their opinion on any new information you submit. We will share their comments with you and give you the opportunity to respond.

Collection Alternative Installment Agreement Offer in Compromise I Cannot Pay Balance

Lien Subordination WithdrawalDischargePlease explain:

My Spouse Is Responsible Innocent Spouse Relief (Please attach Form 8857,Request for Innocent Spouse Relief, to your request.)

Other (For examples, see page 4)Reason (You must provide a reason for the dispute or your request for a CDP hearing will not be honored. Use asmuch space as you need to explain the reason for your request. Attach extra pages if necessary.):

9. Signatures I understand the CDP hearing and any subsequent judicial review will suspend the statutory period of limitations for collection action. I also understand my representative or I must sign and date this request before the IRS Office of Appeals can accept it. If you are signing as an officer of a company add your title (president, secretary, etc.) behind your signature.

SIGN HERE Taxpayer 1's Signature Date

Taxpayer 2's Signature (if a joint request, both must sign) Date

I request my CDP hearing be held with my authorized representative (attach a copy of Form2848)

Authorized Representative's Signature Authorized Representative's Name Telephone Number

IRS Use Only

IRS Employee (Print) Employee Telephone Number IRS Received Date

X

X

X

X

See Detailed Explanation Attached.

X

E. Martin Davidoff, CPA, Esq. 732-274-1600

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sarah

Highlight

Form 12153Request for a Collection Due Process Hearing

Bob & Janet Turley

Mr. & Mrs. Bob Turley (hereinafter the "Taxpayers") ha�� made several attempts to discussthis case with Mr. Pepitone. Mr. Pepitone has never provided the Taxpayers with a convenient timefor either of them to call Mr. Pepitone.

We believe this case can be easily handled through an installment agreement. Please note that we are aware that there are unfiled Form 941s for the first three quarters of 2014. All of these forms will be filed with Mr. Pepitone on or before March 1, 2016. At that time, we will make appropriate arrangements to enter into an installment agreement on behalf of the Taxpayer�. Please also be advised that it is the intent of the Taxpayer� to engage the services of a payroll tax service. Such a tax service would then impound the funds for payroll taxes upon the issuance of each paycheck.

Please note that the Taxpayers have been using the services of Mr. Tony Kubek for over 20 years. In the middle of 2013, Mr. Kubek retired. Although the Taxpayers have engaged the services of the successor company to Mr. Kubek, things have not quite been the same. The Taxpayers have now figured out how to handle all of these problems, with some assistance from our firm.

We respectfully request that our Collection Due Process Hearing be held in person with anAppeals Officer at the Newark, New Jersey��Philadelphia, Pennsylvania��or New York City, NewYork Appeals Office of the Internal Revenue Service.

Additional Notes Regarding forms 12153

1. Equivalent Hearings are no longer automatically provided if you do not qualify for astatutory CDP hearing. This is as a result of regulatory changes in the fall of 2006. If aCDP request is made more then one year beyond the original due date, then there will beno CDP hearing or equivalent thereto.

2. On May 25, 2007, President Bush signed The Small Business and Work Opportunity TaxAct (P.L. 110-28). Under new Section 6330(h) added by that legislation, a CDP hearingis no longer an entitlement if the particular taxpayer had previously requested a CDPhearing with respect to unpaid employment taxes arising in the two-year period beforethe beginning of the taxable period to which the employment tax levy is served.

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Information You Need To Know When Requesting A Collection Due Process Hearing

Form 12153 (Rev. 12-2013) Catalog Number 26685D www.irs.gov Department of the Treasury - Internal Revenue Service

What Is the Deadline for Requesting a Timely Collection Due Process (CDP) Hearing?

• Your request for a CDP hearing about a Federal Tax Lien filing must be postmarked by the date indicated in the Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320 (lien notice).

• Your request for a CDP hearing about a levy must be postmarked within 30 days after the date of the Notice of Intent to Levy and Notice of Your Right to a Hearing (levy notice) or Notice of Your Right to a Hearing After an Actual Levy.

Your timely request for a CDP hearing will prohibit levy action in most cases. A timely request for CDP hearing will also suspend the 10-year period we have, by law, to collect your taxes. Both the prohibition on levy and the suspension of the 10-year period will last until the determination the IRS Office of Appeals makes about your disagreement is final. The amount of time the suspension is in effect will be added to the time remaining in the 10-year period. For example, if the 10-year period is suspended for six months, the time left in the period we have to collect taxes will be extended by six months.

You can go to court to appeal the CDP determination the IRS Office of Appeals makes about your disagreement.

What Is an Equivalent Hearing?

If you still want a hearing with the IRS Office of Appeals after the deadline for requesting a timely CDP hearing has passed, you can use this form to request an equivalent hearing. You must check the Equivalent Hearing box on line 7 of the form to request an equivalent hearing. An equivalent hearing request does not prohibit levy or suspend the 10-year period for collecting your taxes; also, you cannot go to court to appeal the IRS Office of Appeals' decision about your disagreement. You must request an equivalent hearing within the following timeframe:

• Lien Notice—one year plus five business days from the filing date of the Notice of Federal Tax Lien.

• Levy Notice—one year from the date of the levy notice.

• Your request for a CDP levy hearing, whether timely or Equivalent, does not prohibit the Service from filing a Notice of Federal Tax Lien.

Where Should You File Your CDP or Equivalent Hearing Request?

File your request by mail at the address on your lien notice or levy notice. You may also fax your request. Call the telephone number on the lien or levy notice to ask for the fax number. Do not send your CDP or equivalent hearing request directly to the IRS Office of Appeals, it must be sent to the address on the lien or levy notice. If you send your request directly to Appeals it may result in your request not being considered a timely request. Depending upon your issue the originating function may contact you in an attempt to resolve the issue(s) raised in your request prior to forwarding your request to Appeals.

Where Can You Get Help?

You can call the telephone number on the lien or levy notice with your questions about requesting a hearing. The contact person listed on the notice or other representative can access your tax information and answer your questions.

In addition, you may qualify for representation by a low-income taxpayer clinic for free or nominal charge. Our Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area.

If you are experiencing economic harm, the Taxpayer Advocate Service (TAS) may be able to help you resolve your problems with the IRS. TAS cannot extend the time you have to request a CDP or equivalent hearing. See Publication 594, The IRS Collection Process, or visit www.irs.gov/advocate/index-html. You also can call 1-877-777-4778 for TAS assistance.

Note–The IRS Office of Appeals will not consider frivolous requests. You can find examples of frivolous reasons for requesting a hearing or disagreeing with a tax assessment in Publication 2105, Why do I have to Pay Taxes?, or at www.irs.gov by typing “frivolous” into the search engine.

You can get copies of tax forms, schedules, instructions, publications, and notices at www.irs.gov, at your local IRS office, or by calling toll-free 1-800-TAX-FORM (829-3676).

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sarah

Line

Information You Need To Know When Requesting A Collection Due Process Hearing

Form 12153 (Rev. 12-2013) Catalog Number 26685D www.irs.gov Department of the Treasury - Internal Revenue Service

What Are Examples of Reasons for Requesting a Hearing?

You will have to explain your reason for requesting a hearing when you make your request. Below are examples of reasons for requesting a hearing.

You want a collection alternative— “I would like to propose a different way to pay the money I owe.” Common collection alternatives include:

• Full payment—you pay your taxes by personal check, cashier's check, money order, or credit card.

• Installment Agreement—you pay your taxes fully or partially by making monthly payments.

• Offer in Compromise—you offer to make a payment or payments to settle your tax liability for less than the full amount you owe.

“I cannot pay my taxes.” Some possible reasons why you cannot pay your taxes are: (1) you have a terminal illness or excessive medical bills; (2) your only source of income is Social Security payments, welfare payments, or unemployment benefit payments; (3) you are unemployed with little or no income; (4) you have reasonable expenses exceeding your income; or (5) you have some other hardship condition. The IRS Office of Appeals may consider freezing collection action until your circumstances improve. Penalty and interest will continue to accrue on the unpaid balance.

You want action taken about the filing of the tax lien against your property—You can get a Federal Tax Lien released if you pay your taxes in full. You also may request a lien subordination, discharge, or withdrawal. See www.irs.gov for more information.

When you request lien subordination, you are asking the IRS to make a Federal Tax Lien secondary to a non-IRS lien. For example, you may ask for a subordination of the Federal Tax Lien to get a refinancing mortgage on your house or other real property you own. You would ask to make the Federal Tax Lien secondary to the mortgage, even though the mortgage came after the tax lien filing. The IRS Office of Appeals would consider lien subordination, in this example, if you used the mortgage proceeds to pay your taxes.

When you request a lien discharge, you are asking the IRS to remove a Federal Tax Lien from a specific property. For example, you may ask for a discharge of the Federal Tax Lien in order to sell your house if you use all of the sale proceeds to pay your taxes even though the sale proceeds will not fully pay all of the tax you owe.

When you request a lien withdrawal, you are asking the IRS to remove the Notice of Federal Tax Lien (NFTL) information from public records because you believe the NFTL should not have been filed. For example, you may ask for a withdrawal of the filing of the NFTL if you believe the IRS filed the NFTL prematurely or did not follow procedures, or you have entered into an installment agreement and the installment agreement does not provide for the filing of the NFTL. A withdrawal does not remove the lien from your IRS records.

Your spouse is responsible—“My spouse (or former spouse) is responsible for all or part of the tax liability.” You may believe that your spouse or former spouse is the only one responsible for all or a part of the tax liability. If this is the case, you are requesting a hearing so you can receive relief as an innocent spouse. You should complete and attach Form 8857, Request for Innocent Spouse Relief, to your hearing request.

Other Reasons—“I am not liable for (I don't owe) all or part of the taxes.” You can raise a disagreement about the amount you owe only if you did not receive a deficiency notice for the liability (a notice explaining why you owe taxes—it gives you the right to challenge in court, within a specific timeframe, the additional tax the IRS says you owe), or if you have not had another prior opportunity to disagree with the amount you owe.

“I do not believe I should be responsible for penalties.” The IRS Office of Appeals may remove all or part of the penalties if you have a reasonable cause for not paying or not filing on time. See Notice 746, Information About Your Notice, Penalty and Interest for what is reasonable cause for removing penalties.

“I have already paid all or part of my taxes.” You disagree with the amount the IRS says you haven't paid if you think you have not received credit for payments you have already made.

See Publication 594, The IRS Collection Process, for more information on the following topics: Installment Agreements and Offers in Compromise; Lien Subordination, Discharge, and Withdrawal; Innocent Spouse Relief; Temporarily Delay Collection; and belief that tax bill is wrong.

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Additional Notes Regarding CDP Request

1. Need Draft of form 433- A to Transfer Cases from Service Center Appeals Offices BEFORE transfer will take place to allow in-person appeals

2. Knee-Jerk reaction to issuing form 1058 in the field…this is what the IRS managers want.

3. Reversing premature 1058 issuances from the Service Center…for cause (i.e. We Sent in the 433 package!)

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`

E. Martin Davidoff, CPA, Esq. Chapter 4

IRS Appeals in Collection Matters

I R S

R E PRESENTATIoN

AdvISoR

T he most underutilized arm of the Internal Revenue Service with respect to Taxpayer collection

issues is the IRS Office of Appeals (“Appeals”). This office can be used to appeal threatened levies and liens, denials of installment agreements, and denied offers to compromise one’s tax. Understanding the processes and tools available is critical to a practitioner’s success in this specialty.

Generally, Appeals functions are divided into two categories: i) assessment issues and ii) collection issues. Appeals’ officers have become specialized and most officers deal with either assessment issues or collection issues, but not both. Appeals of examination findings, trust fund assessments, and denials of claims for refund all fall within the area of assessment issues. Appeals’ officers working on collection issues are often referred to as Settlement Officers.

Other than appeals of Offers in Compromise (“OICs”), there are two primary procedures to appeal a Tax Collection matter:

■■ Collection Due Process (“CDP”) Appeals (form 12153)■■ The Collection Appeals Program

(“CAP”; form 9423)

CAP is the only methodology that can be used to head off the filing of a Notice of Federal Tax Lien (“NFTL”). The CDP Appeal can only be filed in response to the filing of the NFTL or when a Levy is threatened by the IRS. That threat of levy often comes in the form of the Letter 1058 which states prominently, “NOTICE OF INTENT TO LEVY AND NOTICE OF YOUR RIGHT TO A HEARING.” Providing advance notice of levy is required by Internal Revenue Code (“IRC”) §6330. Such notices are

always sent via Certified Mail. OICs are appealed through a process clearly delineated on OIC rejection letters and will not be discussed in this article.

CDP Hearings The biggest mistake made by taxpay-ers and practitioners alike is not respond-ing to the IRC §6330 notice within the 30 days required to fully protect the tax-payer’s rights. In such hearings, Appeals is empowered to consider ALL collection alternatives. Responding to the §6330 notice is relatively simple. One need only complete the form 12153. The most re-cent revision (March of 2011) provides comprehensive guidance. Considerations when dealing with a §6330 notice and submitting form 12153 are set forth be-low, some of which will be more fully dis-cussed in the next edition of this column.

1 . Determine whether or not to respond within 30 days. The IRS has developed a process to consider untimely-filed requests for CDP hearings. Such hearings are administrative, not stat-utory. Therefore:

a.) The statute of limitations for the IRS to collect the tax con-tinues to run; and

b.) The Taxpayer does not have the right to pursue the matter in the U.S. Tax Court.

IRS policies are that such adminis-trative hearings should be equiva-lent to the CDP hearing and, as do CDP hearings, should consider all collection alternatives. Accordingly, such administrative hearings have been named “Equivalent Hearings,” which can be requested at item #7 of

form 12153 up to 1 year after the tax-payer is provided the §6330 Notice.

So, if a client is not willing to take the matter to Tax Court, would there be any reason to file within 30 days and suspend the running of the statute of limita-tions? One could argue (correctly, I believe), that the possibility of a U.S. Tax Court appeal from the CDP hearing puts added pressure on Appeals to resolve the matter.

Often, the 30-day period is gone before the practitioner gets in-volved. So, it is important for a prac-titioner to obtain IRS account tran-scripts to see when the §6330 notice was issued so that the time to file an Equivalent Hearing does not pass by without consideration of action.

When one is deep into the 10-year IRS limitations period to col-lect the tax, filing for a CDP hearing may be considered risky as the stat-ute may expire without the hearing request. This has become rare, as the IRS has become more consistent about issuing notices of intent to levy early in the collection process.

Be careful about missing dead-lines. Sometimes practitioners will call the Revenue Officer and/or their manager upon the receipt of a Let-ter 1058 or other notice of intent to levy. While negotiating or playing telephone tag, the deadline to appeal could go by and weaken your nego-tiating position significantly.

2. Consider requesting a face-to-face/in-person conference at a local Appeals of-fice. Generally, our office requests a face-to-face hearing on all form 12153 filings (also referred to as “CDP requests”). Why not? Our

E. Martin Davidoff, CPA, Esq. is a sole proprietor in Dayton, NJ, with more than 30 years experience practicing as a CPA and tax attorney. He founded the IRS Tax Liaison Committee of the American Association of Attorney-CPAs, and is a past president of the AAA-CPA.

10 I N O V E M B E R / D E C E M B E R 2 0 11 www.taxcpecourse.com

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experience is that we secure bet-ter results when meeting in person. Our office is located in central New Jersey. Accordingly, we find any of three offices (Newark, New York City, or Philadelphia) relatively convenient. I believe our flexibil-ity regarding location makes it easier for the IRS to grant our requests.

More information on face-to-face conferences for CDP hearing requests, and the IRS reluctance to grant re-quests for such hearings, will be found in the next edition of this column.

3. Seek Penalty Abatements. Whenever there is money due to the IRS, the abatement of penalties should be a consideration. Even if you cannot elaborate on the detail of reasonable cause within the form 12153 attach-ment, you should request abatement and provide an overview of the rea-sonable causes and state clearly that you are willing to provide additional substantiation.

4. Clearly State the Desired ResultsYou want to make clear what you want the Appeals Officer to do. Accord-ingly, your attachment should state the desired results. That attachment should also indicate why you were not able to resolve the problem (i.e. The Revenue Officer sent the threat to levy without ever calling the taxpayer or his/her representative), provide all pertinent facts, and identify the po-tential issues for consideration.

5. Consider requesting that the hearing be recorded. To preserve a record for the Tax Court, you may wish to consid-er requesting that the hearing be re corded. You have the right to do so. By making this request, you will be as-sured that the Appeals manager will be in attendance. I have not used this tool personally, but I do know it is being used regularly by practitioners, partic-ularly in larger, more complex cases.

6. Other technicalities. Include state-ments in your attachment that make it clear that:■■ You reserve the right to amend

the request;

■■ You reserve the right to supplement the CDP request■■ There shall be no ex-parte

communications (communication to influence a decision-making official off the record) between Appeals and other IRS employees working on the case, without your express written permission■■ Don’t forget to include your

power of attorney for the client, form 2848

7. Who attends? As with nearly all of my representation before the IRS, I will attend alone or with a member of my staff. In the rare instances that my cli-ent attends an IRS conference/hear-ing, I make the decision. I have had situations wherein my clients insisted on attending. In such instances, con-sideration should be given to whether or not to retain the client. My pur-pose in bringing staff is to either pro-vide training, have someone along with me who is more knowledgeable of the factual nuances and intricacies of the case, and/or someone whose personality will assist in the resolu-tion of the matter.

CAP AppealsCAP Appeals enable a taxpayer/

practitioner to Appeal a specific action or proposed action of the IRS. Some considerations with respect to CAP Appeals:

1. Only the specific action or proposed action is evaluated by the Settlement Officer. The Settlement Officer will not consider all collection alternatives. However, some Settlement Officers will tell you that they are only doing an “administrative review” to determine whether the IRS followed the requisite procedures in deciding to take or threaten the action being appealed. Under the Internal Revenue Manual (“IRM”), this is simply not true in my opinion. The Settlement Officer is to put himself/herself in the position of the IRS employee and determine whether the action is the appropriate action to be taken considering all facts and circumstances.

2. CAP is an expedited procedure in which the Settlement Officer is required to have the hearing within five days of his/her receipt. However, one never knows when the officer will actually “receive” the case. The five-day rule brings on unfair and extraordinary results, often under the pretense of doing the Taxpayer a ‘favor’ by expediting the case. For example, you could receive a call from a Settlement Officer, have what you believe is a preliminary conversation to the hearing, and then be told that the Settlement Officer is finding in favor of the IRS action. Effectively, you may not have realized that you had the hearing during that conversation! Accordingly, you need to clarify from the beginning in all conversations whether you are having the hearing or just trying to set up a mutually convenient time for one. Also, if you are planning to be away from the office for an extended period, you may want to contact Appeals to make sure that the hearing is not sched-uled while you are unavailable. The IRS will consider your unavail-ability for more than five days, effectively, a forfeiture of your hearing rights.

3. Normally, face-to-face hearings will be permitted in local IRS offices. However, it is very rare that a Service Center CAP will be transferred for a face-to-face hearing.

4. The CAP Program is used to appeal rejections of installment agreements (IRC §7122(e)) and proposed terminations of installment agreements (IRC 6159(e)).

The details of IRS procedures and practices relating to Appeals change frequently. For that reason, you should regularly refer to Section 8 of the IRM, which covers the Appeals function of the IRS and can be found online at: http://www.irs.gov/irm/part8/index.html. See also IRS Publications 594 and 1660.

Contact E. Martin Davidoff, CPA, Esq. at [email protected] and his firm’s Web site can be found at www.taxattorneycpa.com.

By Tax Practitioners ... For Tax Practitioners N O V E M B E R / D E C E M B E R 2 0 11 I 11

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IRS Liens 1. CDP’s available only AFTER Lien Filings

2. Only CAP Appeals can avoid Liens *

3. IR Release 2011-20 (2/24/2011)• See Letter to Commissioner/EMD Article

• Encourages DDIAs

• Allows withdrawal of liens <$25,000 individuals

4. Current Policy is not to file Liens for those entering into DDIAs of $50,000 or less assessed

5. Recent Rules on Withdrawals of Liens

*See IRM 5.12.6.2 ¶2 “CAP is the only appeal available before the NFTL filing. Taxpayers who dispute the proposed filing of the NFTL should be advised of appeal rights under CAP.”

Tools in Dealing with the IRS (see materials, page 4)

Office of Appeals2. Form 12153, Collection Due Process Hearing (Pgs 25 through 32 in materials.)

3. Form 9423, Collection Appeal Request (See pages 36 through 40. New Form as of August 2014)

4. Appealing denials of Penalty Abatement requests & Examination Findings

In-Person Conferences – Developing Relationships

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Form 9423 (Rev. 8-2014) Department of the Treasury - Internal Revenue Servicewww.irs.gov

1. Taxpayer’s name 2. Representative (Attach a copy of Form 2848, Power of Attorney)

3. SSN/EIN 4. Taxpayer’s business phone 5. Taxpayer’s home phone 6. Representative’s phone

7. Taxpayer’s street address

8. City 9. State 10. ZIP code

11. Type of tax (Tax form) 12. Tax periods being appealed 13. Tax due

Collection Action(s) Appealed

14. Check the Collection action(s) you are appealing

Federal Tax Lien Levy or Proposed Levy Seizure

Rejection of Installment Agreement Termination of Installment Agreement Modification of Installment Agreement

Explanation

15. Explain why you disagree with the collection action(s) you checked above and explain how you would resolve your tax problem.Attach additional pages if needed. Attach copies of any documents that you think will support your position. Generally, the Office ofAppeals will ask the Collection Function to review, verify and provide their opinion on any new information you submit. We willshare their comments with you and give you the opportunity to respond.

Under penalties of perjury, I declare that I have examined this request and any accompanying documents, and to the best of my knowledge and belief, they are true, correct and complete. A submission by a representative, other than the taxpayer, is based on all information of which the representative has any knowledge.

16. Taxpayer’s or Authorized Representative’s signature (Only check one box) 17. Date signed

IRS USE ONLY18. Revenue Officer's name 19. Revenue Officer's signature 20. Date signed

21. Revenue Officer's phone 22. Revenue Officer's email address 23. Date received

24. Collection Manager’s name 25. Collection Manager’s signature 26. Date signed

27. Collection Manager’s phone 28. Collection Manager’s email address 29. Date received

Form 9423(August 2014)

Department of the Treasury - Internal Revenue Service

Collection Appeal Request(Instructions are on the reverse side of this form)

ISA

John J. Doe and Jane J. Doe E. Martin Davidoff, CPA, Esq.

123-45-6789 & 987-65-4321 732-274-1600 732-274-1600

123 Main Street

Anywhere NJ 08666

Income 2012, 2013, 2014

X

See attached.

X

xxxxxxxxAttorney's

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Form 9423 (Rev. 8-2014) Catalog Number 14169I Department of the Treasury - Internal Revenue Servicewww.irs.gov

Instructions for Form 9423, Collection Appeal Request

For Liens, Levies, Seizures, and Rejection, Modification or Termination of Installment Agreements

A taxpayer, or third party whose property is subject to a collection action, may appeal the following actions under the Collection Appeals Program (CAP): a. Levy or seizure action that has been or will be taken. b. A Notice of Federal Tax Lien (NFTL) that has been or will be filed. c. The filing of a notice of lien against an alter-ego or nominee's property.d. Denials of requests to issue lien certificates, such as subordination, withdrawal, discharge or non-attachment. e. Rejected, proposed for modification or modified, or proposed for termination or terminated installment agreements. f. Disallowance of taxpayer's request to return levied property under IRC 6343(d). g. Disallowance of property owner's claim for return of property under IRC 6343(b).

How to Appeal If You Disagree With a Lien, Levy, or Seizure Action 1. If you disagree with the decision of the IRS employee, and wish to appeal, you must first request a conference with the employee's

manager. If you do not resolve your disagreement with the Collection manager, submit Form 9423 to request consideration by Appeals. Let the Collection office know within two (2) business days after the conference with the Collection manager that you plan to submit Form 9423. The Form 9423 must be received or postmarked within three (3) business days of the conference with the Collection manager or collection action may resume.

NOTE: If you request an appeal after IRS makes a seizure, you must appeal to the Collection manager within 10 business days after the Notice of Seizure is provided to you or left at your home or business.

2. If you request a conference and are not contacted by a manager or his/her designee within two (2) business days of making the request, you can contact Collection again or submit Form 9423. If you submit Form 9423, note the date of your request for a conference in Block 15 and indicate that you were not contacted by a manager. The Form 9423 should be received or postmarked within four (4) business days of your request for a conference as collection action may resume.

3. On the Form 9423, check the collection action(s) you disagree with and explain why you disagree. You must also explain your solution to resolve your tax problem. Submit Form 9423 to the Collection office involved in the lien, levy or seizure action.

4. In situations where the IRS action(s) are creating an economic harm or you want help because your tax problem has not been resolved through normal channels, you can reach the Taxpayer Advocate Service at 877-777-4778.

How to Appeal An Installment Agreement Which Has Been Rejected, Proposed for Modification or Modified, or Proposed for Termination or Terminated 1. If you disagree with the decision regarding your installment agreement, you should appeal by completing a Form 9423, Collection

Appeal Request. 2. You should provide it to the office or revenue officer who took the action regarding your installment agreement, within 30 calendar

days.

NOTE: A managerial conference is not required. However, it is strongly recommended a conference be held with the manager whenever possible.

IMPORTANT: Never forward your request for an Appeals conference directly to Appeals. It must be submitted to the office which took the action on your installment agreement.

What Will Happen When You Appeal Your Case Normally, we will stop the collection action(s) you disagree with until your appeal is settled, unless we have reason to believe that collection or the amount owed is at risk.

You May Have a Representative You may represent yourself at your Appeals conference or you may be represented by an attorney, certified public accountant or a person enrolled to practice before the IRS. If you want your representative to appear without you, you must provide a properly completed Form 2848, Power of Attorney and Declaration of Representative. You can obtain Form 2848 from your local IRS office, by calling 1-800-829-3676, or by going to www.irs.gov.

Decision on the Appeal Once Appeals makes a decision regarding your case, that decision is binding on both you and the IRS. You cannot obtain a judicial review of Appeals' decision following a CAP. However, there may be other opportunities to obtain administrative or judicial review of the issue raised in the CAP hearing. For example, a third party may contest a wrongful levy by filing an action in district court. See Publication 4528, Making an Administrative Wrongful Levy Claim Under Internal Revenue Code (IRC) Section 6343(b).

Note: Providing false information, failing to provide all pertinent information or fraud will void Appeals' decision.

Refer to Publication 594, The IRS Collection Process, and Publication 1660, Collection Appeal Rights, for more information regarding the Collection Appeals Program. Copies of these publications can be obtained online at www.irs.gov.

The information requested on this Form is covered under Privacy Acts and Paperwork Reduction Notices which have already been provided to the taxpayer.

Privacy Act

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John J. and Jane Doe

Form 9423 Collection Appeal Request

Soc.Sec.#s: 123-45-6789 & 987-65-4321

Question 15 - Explanation:

Taxpayers have paid all of his taxes and interest for each of the periods above. The only amounts dueare penalties, and interest on penalties. All of the late filing and late payment penalties are subjectto appeal and we believe that the penalties will be abated in full on appeal. The only penalties notsubject to appeal, estimated tax penalties, total $6,945. The Taxpayer can forward a check toRevenue Officer Smith for that amount plus the interest thereon. Please provide us with thecomputations.

Accordingly, the Internal Revenue Service is contemplating placing a lien on a Taxpayers who owe(or shortly will owe) no money to the Internal Revenue Service. Placing such a lien on the Taxpayersprior to their opportunity to have a full hearing on the matter with an Appeals Officer appears to bepremature and inappropriate.

Please note that Mr. Doe works in the real estate field. If a lien is placed against Mr. Doe, it willaffect his business and reduce the amount of tax that he will pay to the Internal Revenue Service infuture years. Accordingly, this is not in the best interest of either the Taxpayers or the InternalRevenue Service.

We understand that the Federal tax lien has not yet taken place and that we will have our CollectionAppeal Request hearing prior to the filing of that lien.

NOTE FORM 9423 INSTRUCTIONS:

THE COLLECTION OFFICE MUST RECEIVE YOUR REQUEST FOR AN APPEALWITHIN 2 DAYS OF YOUR CONFERENCE WITH THE COLLECTION MANAGER

OR WE WILL RESUME COLLECTION ACTION.

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Additonal Notes Regarding Form 9423Form 9423- Collection Appeal Request

1. IRS Appeals office often works on a five-day turnaround.However, 5 days runs from when Appeals Officer receives thecase.

2. IRS hesitant to allow case transfer for in-person hearing,especially on Service Center cases.

3. This should be more than an administrative appeal. TheAppeals Officers should put himself in the place of the IRSemployee….but the reality is that this rarely happens. Tammy

WHERE TO SEND THE CAP APPEAL?

1. If you are working with a Revenue Officer, send to them directly.

2. If you are responding to a general notice, call 555-233-1267 Fresno, California and the Appeals group there will let you know what number to fax it to for your area.

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Additonal Notes Regarding Form 9423Standard of Review

• Administrative Review?

• Was IRS action Legal?

• Fresh Look at the Case?

• “Stand in the Shoes” of IRS employee?

Guidance?

• 5.12.6: Appeals Processes involving liens

• 8.24: Collection Appeals Program

Additonal Notes Regarding Form 9423Guidance? (continued)

• 8.24.1.2.7:

#8: “Appeals should review the case for appropriateness of the action…considering all of the relevant facts and circumstances.

#10: “Judgment is likely to be an issue…. Appeals may reverse the Collection function’s action if evaluation of the taxpayer’s history and current facts and circumstances indicate that the proposed or taken action is inappropriate.”

• 8.24.1.1 #9: Under CAP:

“Appeals’ review is for appropriateness of the action … considering all of the relevant facts and circumstances.”

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AIRS Representation AdvisorE. Martin Davidoff, CPA, Esq.

Tax Research Using IRS.GOV Securing Discharges of Property from Federal Tax Liens

As I began my research for this article, I searched www.irs.gov and discovered newly-revised Publication 4235. It is amazing how helpful irs.gov can be. I urge readers not to overlook the irs.gov website when researching basic IRS procedures.

Publication 4235 provides the addresses and phone num-bers of the “Collection Advisory Group” offices throughout the country. In the past, the title “Special Procedures” or “Technical Services” has been used to identify this group which determines when an IRS lien can be discharged or subordinated prior to an IRS debt being paid in full. Pub-lication 4235 also refers to seven other publications relating to the Notice of Federal Tax Lien, including Publication 783 entitled “Instructions on how to apply for a Certificate of Discharge of Property From a Federal Tax Lien”.

The relevant law for tax liens can be found in Internal Revenue Code (“IRC”) Sections 6321 through 6327. The IRS procedures can be found in the regulations thereunder as well as Section 5.17.2 of the Internal Revenue Manual (“IRM”). When one wishes to transfer property free of the federal tax lien, one requests of the IRS a “Certificate of Dis-charge” pursuant to IRC §6325(b) and IRM 5.17.2.8.1. The process that the IRS would like taxpayers to follow to request such a discharge is set forth in Publication 783.

The discharge process is used by taxpayers to transfer property to others. Here are some examples:

Debtor taxpayers wish to sell their home, using the proceeds to reduce their IRS debt.

Debtor taxpayers wish to sell their business to a third party to maximize proceeds, yet amounts are not sufficient to pay off all of the entire IRS debt.

Debtor taxpayer corporation wishes to sell its inventory to an LLC owned by a minority of its shareholders, thus allowing the underlying business to be continued by the next generation.

In each of the above cases, the buyer will acquire the assets free and clear from the IRS lien because the IRS has agreed to discharge its lien against the assets being sold. It should be noted that the IRS lien against the taxpayer and any of his/her/its other assets will continue. In most cases, the IRS will receive the sales price, less payments to senior secured creditors, less agreed transactional expenses of the assets being sold. There are cases in which the IRS will discharge property even when the IRS receives no money from the transaction. This will occur, for example, in the case of a residence which has a fair market value less than the mortgage balance. Such action is specifically envisioned

“Do not overlook the irs.gov website when researching basic IRS

procedures.”

by IRC §6325(b)(2)(B) which provides that the Secretary (of the Treasury) may issue a certificate of discharge of property subject to the federal tax lien if the Secretary determines that the interest of the United States has no value.

Often, the IRS will negotiate to reduce professional fees related to the transaction. In New Jersey, they do not even allow the 1 percent reality transfer tax in spite of the fact that no real estate transfer can take place without paying the tax, citing that it is technically a fee rather than a tax.

If the collection matter is currently being handled by a Revenue Officer in the field, it is important to get support for the discharge from the Revenue Officer and his/her manager. Although this is not required, nor is it a final determination, such consensus-building provides a solid foundation for the ultimate decision being made by the Collection Advisory Group. Once one has secured support from the Revenue Offi-cer, then one should move quickly to put together the request (made by a letter, not a form) and the accompanying materi-als. Publication 783 provides a listing of the materials which, ideally, the IRS would like to have. As you gather those materials, it is important to anticipate questions and provide as much documentation and backup as possible.

Here are some additional pointers for putting together your letter: Be sure to include a comprehensive list of property to be discharged from the lien. If you are discharging inventory, attach the actual inventory listing. If you are, in essence, sell-ing a company through an asset sale, you must list all of the assets, including intangible assets. Keep in mind that the goal is to discharge all property being transferred from the lien to complete the planned transaction. If you do not accurately or thoroughly describe the property, the IRS cannot provide you the discharge or the discharge provided may be ineffective.

Include a “Summary of Transaction” section to lay out the entire transaction to the IRS and disclose all of the transaction’s intricacies. It is important that they fully understand what is

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significant diminution in value.The Collection Advisory Group will

insist on at least 30 days to consider the request. The 30 days run from the time they receive a complete pack-age. If there is a Revenue Officer on the case, the package must be provided to the Revenue Officer who will then turn the package around. If you have not received a decision within 30 days, I have found the Taxpayer Advocate Service helpful in bringing a matter to

fruition.The practicality of making deals hap-

pens, without any advance assurance by the IRS, makes the entire process risky. Insofar as possible, your client should include contingencies in their sales con-tracts for securing IRS approval of the lien discharge. For businesses, securing contingent language is usually not a problem. However, for residential real estate, such contingencies can make the property unmarketable. The IRS will not approve hypothetical transactions. They prefer to have actual contracts and a pro-forma closing/HUD-1 statement in order to provide a decision.

IRS.GOV Research: If There Are Secured Creditors Ahead of the IRS, Be Sure To Provide Promissory Notes, Security Instruments, and Statements of Balance Due taking place as quickly as possible. Such advance disclosures facilitate frank dis-cussion with the IRS on the issues.

Include a “Summary of Transaction” section to lay out the entire transac-tion to the IRS and disclose all of the transaction’s intricacies. It is important that they fully understand what is tak-ing place as quickly as possible. Such advance disclosures facilitate frank dis-cussion with the IRS on the issues.

If there are secured creditors ahead of the IRS, be sure to provide promis-sory notes, security instruments, and statements of balance due. You want to paint a clear picture of the transaction and how the funds will be distributed. For more complex transactions, provide a supplemental spreadsheet which clear-ly shows how and when the proceeds are being distributed among creditors.

The IRS will not allow a junior credi-tor (that is one that has an unsecured position or a secured position estab-lished after the IRS gave notice of its lien) to receive funds if the IRS debt is not fully paid.

When dealing with real estate, pro-vide a listing of anticipated costs of closing (i.e. mortgage payoff, real estate commissions, attorney fees) with the initial letter. As soon as possible there-after, provide a draft of the HUD-1 closing statement.

Do not hold up the submission of the Request for Discharge while waiting for the HUD-1 or any other document. It is more important to provide a substan-tially complete document as early as pos-sible and then supplement it as additional documentation is secured.

In a normal economic environment, I find the IRS request for appraisals with respect to arms-length transactions to be unnecessary. Consider substituting an online valuation and negotiate the sufficiency of such a document. The IRS uses such valuation services in its Offer in Compromise units. However, in turbulent economic times, one may need appraisals to convince the IRS of a

Securing a Certificate of Discharge on property can be the ideal solution to an IRS problem. However, being successful requires the practitioner to put together a complete package and to be tenacious in moving the case along. The Collection Advisory Group appears to reject most requests at first blush. Accordingly, I push hard to secure a “wet reading” on the case as quickly as possible and move to address their concerns. With documentation and persuasion, one can succeed in securing discharges.

If your request for discharge is reject-ed, you may appeal such rejection by filing a form 9423, Collection Appeal Request. The matter is then considered by the Office of Appeals. In some cases, the Office of appeals merely reviews the procedural aspects of the underly-ing decision and does not get into the substance. In others, they will exercise independent judgment and/or attempt to negotiate a resolution among the par-ties. Even if an appeal could be viable, by the time we get to an Appeals hear-ing, the buyer has often moved on.

E. Martin Davidoff, CPA, Esq. is a sole proprietor with more than 25 years experience practicing as a CPA and tax attorney in Dayton, N.J. Davidoff is the President of the American Association of Attorney-CPAs. For information about Davidoff ’s upcoming speaking engagements, please email [email protected].

Reader Service Card No. 39

“If your request for discharge is rejected, you may appeal such

rejection by filing a form 9423, Collection Appeal

Request.”

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LiensSECRET TAX LIEN

PUBLIC TAX LIEN – NOTICE OF FEDERAL TAX LIEN (NFTL)

RELEASE OF LIEN• Satisfaction of Debt• Release against only a specific property

SUBORDINATION OF LIEN

WITHDRAWAL OF LIEN• …shh….we pretend it never happened!

MT

Liens on Streamlined Agreements

IF NO CURRENT LIEN:

Lien will generally not be placed on taxpayer if balance due is <$50,000 and enters into DDIA.

IF CURRENT LIEN:

Lien will generally be removed, upon request, once balance falls below $25,000 if in DDIA.

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IRS Announces New Effort to Help Struggling Taxpayers Get a Fresh Start; Major Changes Made to Lien Process

IR-2011-20, Feb. 24, 2011

WASHINGTON — In its latest effort to help struggling taxpayers, the Internal Revenue Service today announced a series of new steps to help people get a fresh start with their tax liabilities.

The goal is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. Specifically, the IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid tax liens.

“We are making fundamental changes to our lien system and other collection tools that will help taxpayers and give them a fresh start,” IRS Commissioner Doug Shulman said. “These steps are good for people facing tough times, and they reflect a responsible approach for the tax system.”

Today’s announcement centers on the IRS making important changes to its lien filing practices that will lessen the negative impact on taxpayers. The changes include:

Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.

Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill. Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment

Agreement. Creating easier access to Installment Agreements for more struggling small businesses. Expanding a streamlined Offer in Compromise program to cover more taxpayers.

“These steps are in the best interest of both taxpayers and the tax system,” Shulman said. “People will have a better chance to stay current on their taxes and keep their financial house in order. We all benefit if that happens.”

This is another in a series of steps to help struggling taxpayers. In 2008, the IRS announced lien relief for people trying to refinance or sell a home. In 2009, the IRS added new flexibility for taxpayers facing payment or collection problems. And last year, the IRS held about 1,000 special open houses to help small businesses and individuals resolve tax issues with the Agency.

……..FOR FURTHER INFORMATION SEE IRS WEBSITE:

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6 I A P R I L / M AY 2 0 11 www.cpamagazine.com

Over the past several weeks, the IRS has made some significant changes in collection policies and procedures, which I am covering in this issue. The series “Rules of Engagement in Dealing with the IRS” will continue in a future issue.

IR News Release 2011-20 (02/24/2011)IR News Release 2011-20 (“IR-2011-20”) appears long on claiming to provide taxpayers a “fresh start” and short on specifics. But, there are several important concepts and details that were provided.

A. Incentives for Direct Debit Installment Agreements (“DDIA”)The IRS is using the avoidance of a lien as the carrot to provide incentives for people to enter into installment agreements with the IRS that allow the IRS to directly debit a taxpayer’s bank account for monthly payments. If the unpaid assessments of a taxpayer amount to $25,000 or less, then the IRS will consider withdrawing a lien:

n For taxpayers entering into a DDIA;n For taxpayers converting their existing “regular” installment

agreement into a DDIA; andn For taxpayers with an existing DDIA who request a lien with-

drawal from the IRS.However, the lien will be withdrawn only after a probation-

ary period (the length of which was not covered in the IRS Release) “demonstrating that direct debit payments will be honored.” My guess is that the probationary period will run from 45-90 days from the time that the taxpayer moves into or creates a DDIA with respect to their debt.

Although not mentioned in the IRS release, it appears that taxpayers for whom no IRS liens have yet to be filed, and owing less than $25,000, will be able to avoid a lien upon entering into a DDIA. It should be noted, however, that current policy is to not file a lien for all installment agreements under $25,000.

B. Small Business Installment AgreementsSmall businesses owing payroll taxes to the IRS will now have an ex-panded opportunity to avail themselves of a streamlined installment agreement process only if they enter into a DDIA. Prior to IR-2011-20, such streamlined agreements were only available on payroll tax liabilities if the liability did not exceed $10,000. Under the new rules, small businesses may enter into a streamlined installment agreement (SIA) with balances of up to $25,000 in payroll taxes as long as they agree to a DDIA. However, even though the dollar threshold is higher, the 24-month period remains for small businesses to pay off their SIAs. Accordingly, few are likely to take advantage of this new opportunity as it is currently offered.

Prior to IR-2011-20, small businesses were already allowed to enter into SIAs for income taxes and were allowed up to 60 months to repay such liabilities. One of the many unanswered questions pre-sented by IR-2011-20 is whether the small businesses who only owe income taxes will now be required to enter into a DDIA in order to secure an SIA? If so, the new rules would actually create an added restriction upon taxpayers when compared to the previous rules of IRM §5.14.5.2 (08/05/2010).

C. Fewer LiensThe principal message of IR-2011-20 was that the IRS is taking steps to “help people get a fresh start with their tax liabilities” and an-nounces that it is “making important changes to its lien filing prac-tices.” Let’s look at these five changes.

1. “Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.”

The obvious question is what is the change in the threshold? In spite of the question being presented to the IRS at several levels, it remains unanswered. The pre-IR-2011-20 rules set forth in Internal Revenue Manual (“IRM”) §5.12.2.4.1 provide that a lien may be considered when the unpaid balance of an assessment against the taxpayer is more than $5,000. And, a lien can be considered even if the balance due is less than $5,000 if “the lien will promote payment compliance.” Is the $5,000 threshold being increased? If so, to what level?

The larger focus of IR-2011-20 was that one may avoid liens if entering into an SIA which is also a DDIA. IRM §5.14.5.2(4) has provided that “A lien determination is not required for a streamlined installment agreement but may be made at the discretion of the rev-enue officer and liens may be filed.” SIAs have generally been made available to those owing less than $25,000 to the IRS.

New IRS Procedures Claim to Provide ‘Fresh Start’ for Taxpayers

OIRSRepresentation AdvisorE. Martin Davidoff, CPA, Esq.

“It should be noted that the IRS will not allow the transfer of a case from a Service Center

Appeals office unless such financial disclosure forms are

provided in advance.”

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By Practicing CPAs ... For Practicing CPAs A P R I L / M AY 2 0 11 I 7

So, has the IRS truly taken action to reduce lien filings in IR-2011-20? Probably not, because existing policy generally would not have the IRS placing liens on taxpayers entering into streamlined installment agree-ments. Actually, for this group of taxpayers (those owing less than $25,000 and enter-ing into a streamlined agreement), the re-quirements to avoid a lien may have been increased by the requirement for a DDIA. Will the IRS now routinely assert liens for those owing less than $25,000 who enter into an SIA if a DDIA is not elected? The answer is currently unknown to the public.

Who gets the biggest benefit from the new rules? In my mind, it is those who were not getting into a streamlined installment agreement and being unresponsive to the IRS. Such unresponsiveness would have led to the IRS placement of the lien upon the taxpayer. Under the new rules, the IRS will now remove the lien when the taxpayer en-ters into an SIA/DIA and gets through the probationary period. Previously, the removal of the lien prior to full payment was virtually impossible.

2. “Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.”

No specifics were mentioned here. Currently, it is not particularly difficult to secure a lien withdrawal after payment. Such can be done at walk-in centers if timing is pressing or through a centralized lien hot-line. Will the IRS really make it easier? That remains to be seen.

3. “Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.”

See the discussion in sections A and B above. And, even if this is true, the IRS is getting a bigger benefit through the increase in the rate of compliance of those entering into DDIAs as compared to those who enter into an agreement to, hopefully, mail in the check each month.

4. “Creating easier access to Install-ment Agreement for more struggling small businesses.”

See discussion in section B above.5. “Expanding a streamlined Offer in

Compromise program to cover more taxpay-ers.”

IR-2011-20 goes further, stating

that the IRS is expanding the availabil-ity of streamlined offer in compromises (OIC) to taxpayers with annual income of up to $100,000 and those owing up to $50,000 (doubled from the previous limit of $25,000). There is just one catch here. I haven’t found anyone who understands how a “streamlined” OIC program is differ-ent from the normal Offer in Compromise system. When one searches “streamlined Offer in Compromise” on the IRS Web site, the only entry that comes up is IR-2011-20! Also, the concept of a streamlined OIC is not mentioned in the OIC regulations un-der §7122.

Revised: Form 12153, Request for a Collection Due Process or Equivalent HearingFor the first time since 2006, the IRS has revised form 12153, Request for a Collec-tion Due Process or Equivalent Hearing. The form, now available on www.irs.gov, re-quests more information from the Taxpayer and provides much better guidance on the use of the form. Kudos to the IRS on pro-viding very helpful information as to when and where to file the form. Also, very spe-cific information is provided to assist taxpay-ers on what takes place in a Collection Due Process (CDP) hearing and what issues can be addressed in such hearings. The following changes have been made to the form itself:

n Separate contact information is re-quested for the taxpayer and spouse.

n The form now has language encour-aging the submission of financial disclosure information (forms 433A and 433B) if a taxpayer wants to discuss collection alterna-tives. It should be noted that the IRS will not allow the transfer of a case from a Service Center Appeals office unless such financial disclosure forms are provided in advance.

n The form makes it clear that you must provide a reason for your dispute and that failure to do so will result in your re-quest for a CDP hearing not being honored. The instructions provide an entire page of examples of reasons.

n A new box has been added to desig-nate that the CDP hearing will be held with one’s representative.

n The instructions make it very clear that liens may be filed during the pendency of a CDP regarding a proposed levy action.

Under New Rules, the IRS Will Now Remove the LienAs a side note, at press-time, the IRS

had nine sections on the form, numbered 1 through 8 (two items marked #5).

E. Martin Davidoff, CPA, Esq., is a sole proprietor in Dayton, N.J., with more than 30 years experience practicing as a CPA and tax attorney. He founded the IRS Tax Liaison Committee of the American Association of Attorney-CPAs and is a past president of the AAA-CPA. Contact him at [email protected]. REVIEW QUESTION

True or False? Form 12153 has been revised to include language that encourages including forms

433A and 433B if a taxpayer wants to discuss collection alternatives.Answer: True The form now has language encouraging the submission of financial disclosure information (forms 433A and 433B) if a taxpayer wants to discuss collection alternatives. It should be noted that the IRS will not allow the transfer of a case from a Service Center Appeals office unless such financial disclosure forms are provided in advance.

CPA TAX UNIVERSITY

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1/8/13

1

IRS Advisory

43

• New Jersey’s Advisory Group Manager

• Guy Esposito

• Group: 973-921-4283 (Leave Message)

• See Publication 4235 for Advisory Group phone numbers and addresses

IRS Advisory

44

• Function of Collection

• Advisory Group is part of the Specialty Collection, Offers, Liens & Advisory Function.

• Experienced Revenue Officers with a talent for technical work.

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IRS AdvisoryInternal Customers

45

• Revenue Officers Reduce Suits to Judgment Foreclosures

• Department of Justice Civil Tax Division/US Attorney Serves as DOJ’s contact at the IRS

for legal actions against the IRS, other than US Tax Court;

Maintains control during DOJ collection actions on judgments

IRS AdvisoryInternal Customers

46

• Department of Justice Civil Tax Division/US Attorney (continued) Last word on Settlement Agreements

on post-judgment cases Reviews requests for writ of

entry/seizures Executes Deeds on Seized Real

Property IRS Contact when US is named as a

creditor on foreclosure actions

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3

IRS AdvisoryExternal Customers

47

• Requests for Discharges under 6325(b):

Interest of government – No Value;

Interest of government – Smaller Value than the lien amount;

Remaining attached property of lien valued at least twice the value of the total tax liability, less senior encumbrances


48

• Requests for Discharges under 6325(b):

See Publication 783;

Use Form 14135;

Include letter explaining the transaction.

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49

• Certificate of Subordination under 6325(d)(1) and (d)(2):

Allows junior creditor to take position ahead of IRS NFTL;

See Publication 783;

Use Form 12277.


50

• Certificate of Subordination under 6325(d)(1) and (d)(2);

• When will such requests be Approved?

Interest in the property will be paid to Government; or

Subordination will improve collection potential.

Use Form 12277.

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51

• Claim for refund of Trust Fund Recovery Penalty (TRFP) under section 6672 via form 843: Best was to have TRFP reconsidered; Requires Payment (one employee for

per quarter: $100 per quarter?) Define TRFP Standards Applied

IRS AdvisoryExternal Customers – Other Services

52

• Decedent Proof of Claims

• Collateral Agreements

• Encumbrances on Other Properties

• Estate Tax Liens

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6

Withdrawals of Notice of Federal Tax Lien (NFTL)

Controlled by IRC 6325(j)

Liens may be withdrawn:

A. NFTL was premature or not in accordance with administrative procedures;

B. Taxpayer had entered into an agreement under section 6159 (installment agreement) to satisfy the tax liability.** 54

Withdrawals of Notice of Federal Tax Lien (NFTL)

Controlled by IRC 6325(j)

Liens may be withdrawn:

C. If such withdrawal will facilitate the collection of the liability; and

D. Would be in the best interests of the United States and the taxpayer.

Guy Esposito Direct Contact.55

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Fresh Start Notice of Federal Tax LiensIncrease in the Notice of Federal Tax Lien filing thresholdThe Fresh Start changes increase the IRS Notice of Federal Tax Lien filing threshold from $5,000 to$10,000. Notices of Federal Tax Liens may still be filed on amounts less than $10,000 whencircumstances warrant. The IRS will not retroactively apply the new $10,000 lien notice filingthreshold and automatically withdraw a previously filed lien.

Requesting a lien withdrawal after the lien has been releasedThe IRS may now issue a withdrawal of a filed Notice of Federal Tax Lien after the lien has beenreleased. If you wish to have the Notice of Federal Tax Lien withdrawn, you must request thewithdrawal in writing. Please use Form 12277, Application for Withdrawal (PDF). In item 11, Reasonfor requesting withdrawal, check the last box, “The taxpayer, or the Taxpayer Advocate acting onbehalf of the taxpayer, believes withdrawal is in the best interest of the taxpayer and thegovernment.”

Generally, eligibility requirements are:

Your tax liability has been satisfied and your lien has been releasedYou are in compliance for the past three years in filing:

All individual and business returnsAll information returns

You are current on your estimated tax payments and federal tax deposits, as applicable.

Notice of Federal Tax Lien withdrawal after entering into a Direct Debitinstallment agreementIf you are a qualifying taxpayer and meet the eligibility requirements, you may have your filed Noticeof Federal tax Lien withdrawn after entering into a Direct Debit installment agreement. Your requestfor lien withdrawal must be in writing. Please use Form 12277, Application for Withdrawal (PDF). Initem 11, “Reason for requesting withdrawal,” check the third box , “The taxpayer is under a DirectDebit Installment Agreement.“

Qualifying taxpayers are:

IndividualsBusinesses with income tax liability onlyOut of business entities with any type of tax debt

Eligibility Requirements are:

The current amount you owe must be $25,000 or lessIf you owe more than $25,000, you may pay down the balance to $25,000 prior to requesting thelien withdrawal to be eligibleYour Direct Debit Installment Agreement must full pay the amount you owe within 60 months orbefore the Collection Statute expires, whichever is earlierYou must be in full compliance with other filing and payment requirementsYou must have made three consecutive direct debit paymentsYou cannot have previously received a lien withdrawal for the same taxes unless the withdrawalwas for an improper filing of the lienYou cannot have defaulted on your current, or any previous, direct debit installment agreement

If you are currently on a regular installment agreement, you may convert to a Direct Debit InstallmentAgreement. To convert a regular installment agreement to a Direct Debit Installment Agreement::

Individuals may use the Online Payment Agreement application, call the toll free line listed below,or visit your local IRS officeBusinesses may call the toll free line listed below or visit your local IRS office

If you have questions or need assistance with the direct debit process, please call the applicabletelephone number below.

Individuals (Wage & Salary Earners) 1-800-829-0922

Individuals (Self-Employed) 1-800-829-8374

Businesses 1-800-829-0115

If you default on your Direct Debit Installment Agreement after the lien is withdrawn, a new notice oflien may be filed and collection efforts may resume.

References/Related TopicsStruggling with Paying Your Taxes? Let IRS Help You Get a Fresh StartUnderstanding a Federal Tax Lien

Fresh Start Notice of Federal Tax Liens http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Fres...

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http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Fresh-Start-Notice-of-Federal-Tax-Liens

LIEN HAS BEEN RELEASED

Eligibility Requirements:

1. Tax liability has been fully paid.

2. Taxpayer is in compliance for the past three years in filing:a. All individual and business returnsb. All information returns

3. Taxpayer is current on estimated tax payments and federal tax deposits (as applicable)

4. Has to be a determination that it is in the best interest of Taxpayer and the government.

Completion of Form 12277 “Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien”:

A. Check the last box in Section 11 “the best interest provision”

B. In Section 12 write: "My liability is fully paid and the lien has been released, and I am seeking awithdrawal under the Fresh Start program."

Submit Package:(See Publication 4235 "Advisory Group Addresses" to determine which is office should receive your Form 12277)

1. Transmittal Letter

2. Copy of Form 668(Z) "Certificate of Release of Federal Tax Lien"

3. Copy of Form 2848 "Power of Attorney and Declaration of Representative"

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E. MARTIN DAVIDOFF


P.O. Box 835 Dayton, NJ 08810-0835 [email protected] _____________

TEL: 732-274-1600 FAX: 732-274-1666

December 2, 2011

VIA CERTIFIED MAILAttn: Advisory Group ManagerIRS Advisory Group4 Paragon Way, Suite 2Freehold, NJ 07728

RE: Withdrawal of Notice of Federal Tax LienBobby SwisherSS#: 123-45-6789

Dear Sir or Madam:

On behalf of the above-referenced Taxpayer, we are requesting a Withdrawal of Notice of Federal TaxLien. As such please find enclosed:

1. Form 12277, "Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien";

2. Copy of the "Certificate of Release of Federal Tax Lien;" and;

3. Copy of Form 2848, "Power of Attorney and Declaration of Representative."

Once the paperwork has been com pleted, please forward a copy of Form 10916(c) "Withdrawal ofFederal Tax Lien" to the Middlesex County Clerk's office for recording. In addition, please provide a copyof Form 10916(c) to my office for the Taxpayer's records.

Should you have any questions, please do not hesitate to contact me. Thank you in advance for yourassistance with this matter.

Very truly yours,

E. Martin Davidoff

EMD:rbencls.

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Addresses for Requests for Tax Lien Withdrawal

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See Publication 4235 for addresses of all Advisory Group Offices

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X

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General Instructions 1. Complete the application. If the information you supply is

not complete, it may be necessary for the IRS to obtainadditional information before making a determination on theapplication.

Sections 1 and 2: Enter the taxpayer's name and Social Security Number (SSN) or Employer Identification Number (EIN) as shown on the Notice of Federal Tax Lien (NFTL).

Section 3: Enter the name of the person completing the application if it differs from the taxpayer's name in section 1 (for example, taxpayer representative). For business taxpayers, enter the name and title of person making the application. Otherwise, leave blank.

Sections 4 through 8: Enter current contact information of taxpayer or representative.

Section 9: Attach a copy of the NFTL to be withdrawn, if available. If you don't have a copy of the NFTL but have other information about the NFTL, enter that information to assist the IRS in processing your request.

Section 10: Check the box that indicates the current status of the lien. "Open" means there is still a balance owed with respect to the tax liabilities listed on the NFTL. "Released" means the lien has been satisfied or is no longer enforceable. "Unknown" means you do not know the current status of the lien.

Section 11: Check the box(es) that best describe the reason(s) for the withdrawal request. NOTE: If you are requesting a withdrawal of a released NFTL, you generally should check the last box regarding the best interest provision.

Section 12: Provide a detailed explanation of the events or the situation to support your reason(s) for the withdrawal request. Attach additional sheets and supporting documentation, as needed.

Affirmation: Sign and date the application. If you are completing the application for a business taxpayer, enter your title in the business.

2. Mail your application to the IRS office assigned youraccount. If the account is not assigned or you areuncertain where it is assigned, mail your application to IRS,ATTN: Advisory Group Manager, in the area where you liveor is the taxpayer's principal place of business. UsePublication 4235, Advisory Group Addresses, to determinethe appropriate office.

3. Your application will be reviewed and, if needed, you maybe asked to provide additional information. You will becontacted regarding a determination on your application.

a. If a determination is made to withdraw the NFTL, wewill file a Form 10916(c), Withdrawal of Filed Notice ofFederal Tax Lien, in the recording office where theoriginal NFTL was filed and provide you a copy of thedocument for your records.

b. If the determination is made to not withdraw theNFTL, we will notify you and provide informationregarding your rights to appeal the decision.

4. At your request, we will notify other interested partiesof the withdrawal notice. Your request must be inwriting and provide the names and addresses of thecredit reporting agencies, financial institutions, and/orcreditors that you want notified.

NOTE: Your request serves as our authority to release the notice of withdrawal information to the agencies, financial institutions, or creditors you have identified.

5. If, at a later date, additional copies of the withdrawal noticeare needed, you must provide a written request to theAdvisory Group Manager. The request must provide:

a. The taxpayer's name, current address, and taxpayeridentification number with a brief statementauthorizing the additional notifications;.

b. A copy of the notice of withdrawal, if available; andc. A supplemental list of the names and addresses of

any credit reporting agencies, financial institutions, orcreditors to notify of the withdrawal of the filed Form668(Y).

. Privacy Act Notice

We ask for the information on this form to carry out the Internal Revenue laws of the United States. The primary purpose of this form is to apply for withdrawal of a notice of federal tax lien. The information requested on this form is needed to process your application and to determine whether the notice of federal tax lien can be withdrawn. You are not required to apply for a withdrawal; however, if you want the notice of federal tax lien to be withdrawn, you are required to provide the information requested on this form. Sections 6001, 6011, and 6323 of the Internal Revenue Code authorize us to collect this information. Section 6109 requires you to provide the requested identification numbers. Failure to provide this information may delay or prevent processing your application; providing false or fraudulent information may subject you to penalties.

Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism.

Catalog Number 27939C www.irs.gov Form 12277 (Rev. 10-2011)

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Typewritten Text

Bobby Swisher

Collection Advisory Group

Numbers and Addresses

This publication should be used when you need to contact a local Collection Advisory ofÄce.

You can also use this publication to determine the ofÄce to contact with questions regarding Notices of Federal Tax Lien and where to submit requests or applications for lien-related certiÄcates, such as those listed below.

Topic Instructions, Forms, or Additional Information OfÄce to contact

General lien questionsIRS website (see links below)

Centralized Lien Operation

Request for payoff balance of Federal Tax Lien

IRS website (see links below)Centralized Lien Operation

Release of Federal Tax Lien Publication 1450, Instructions on How to Request a Certificate of Release of Federal Tax Lien


Discharge of Property from Federal Tax Lien

Publication 783, Instructions on how to apply for a Certificate of Discharge of Property From Federal Tax Lien

Advisory of�ce where the notice of lien is �led

Nonattachment of Federal Tax Lien

Publication 1024, How to Prepare an Application for a Certificate of Nonattachment of Federal Tax Lien


Subordination of Federal Tax Lien

Publication 784, How to Prepare an Application for a Certificate of Subordination of Federal Tax Lien


Withdrawal of Notice of Federal Tax Lien

Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien

Advisory of�ce where the taxpayer resides

Withdrawal of Notice of Federal Tax Lien - after lien released

Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien


Foreclosure of property-Redemption Issues

Publication 487, How to Prepare an Application Requesting the United States to Release Its Right to Redeem Property

Secured by a Federal Tax Lien

Advisory office where the notice of lien is filed

Foreclosure of property- Non-judicial sales

Publication 786, Instructions for Preparing a Notice of Non-Judicial Sale and Application for Consent to Sale

Advisory office where the notice of lien is filed

See page two for the complete listing and contact information for each Advisory OfÄce.

Contact information for the Centralized Lien Operation is as follows:

Centralized Lien OperationP.O. Box 145595, Stop 8420GCincinnati, OH 45250-5595

Phone: 1-800-913-6050Phone (outside the U.S.): 859-669-4811FAX Number: 855-390-3528

You can Änd more information about federal tax liens on our website www.IRS.gov by typing “lien” in the search box or going directly to: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Understanding-a-Federal-Tax-Lien

Publications and Forms referenced above may be obtained through the IRS.gov website or requested through the contact ofÄce. Certain topics also have supplemental instructional videos which may be viewed at: http://www.irsvideos.gov/Individual/IRSLiens

Publication 4235 (Rev. 4-2014) Catalog Number 37262G Department of the Treasury Internal Revenue Service www.irs.gov

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Field Collection Area

Area Location Address Phone# Fax #

Nor th Atlantic Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont

380 Westminster St., 4th ÀoorProvidence, RI 02903

617-316-2608 877-477-8740

Eastern and Southern New York(Hudson Valley)

1 Clinton Ave. & No. Pearl, Albany, NY 12207

518-427-4178 518-427-4214

New York City (5 boroughs), Nassau, Rockland, Suffolk, and Westchester Counties

290 Broadway, 5th FloorNew York, NY 10007

212-436-1046 877- 477-8744

Western and Central New York Room 109, 130 S. Elmwood Ave Buffalo, NY 14202-2464

716-961-5279 716-961-5067

New Jersey 4 Paragon Way Suite 2, Freehold, NJ 07728 973-921-4283 732-761-3342

Central Western Pennsylvania 1000 Liberty Ave., Room 704, Pittsburgh, PA 15222 412-395-5200 877-477-8750

Eastern Pennsylvania, Delaware 600 Arch St., Room 3259, Philadelphia, PA 19106 212-436-1299 212-436-1931

Virginia 400 N. 8th St., Room 898, Mail Box 75 Richmond, VA 23219

804-916-8039 804-916-8060

West Virginia, Kentucky, Ohio 550 Main St., Room 3417, Cincinnati, OH 45202 513-263-3197 513-263-4426

Maryland, Washington, D.C. 31 Hopkins Plaza, MS 1150, Baltimore, MD 21201 443-853-5417 443-853-5331

Tennessee 801 Broadway, MDP 53, Nashville, TN 37203 615-250-5797 877-477-9209

Indiana Stop SB 461, 575 N. Pennsylvania St, Indianapolis, IN 46204

414-231-2121 877-477-9261

South Atlantic Georgia 401 W. Peachtree St., NW, Stop 333-D, Atlanta, GA 30308

404-338-8262 404-338-8247

North Carolina, South Carolina 4905 Koger Blvd. Ste 102, Mail Stop #8Greensboro, NC 27407

336-574-6095 855-847-7742

Northern Florida 400 West Bay St. Stop 5710,Jacksonville, FL 32202

904-665-0832 904-665-1848

Southern Florida 7850 SW 6th Court, MS 5780, Plantation, FL 33324

954-423-7043 855-851-8235

Midwest Illinois Stop 5012 CHI, 230 S. Dearborn Room 2630, Chicago, IL 60604

312-292-2892 312-292-2999

Wisconsin Stop 5303MIL, 211 W. Wisconsin Ave., Milwaukee, WI 53203

414-231-2121 877-477-9261

Missouri, Kansas Stop 5333STL, Rm 9.203, 1222 Spruce St, St. Louis, MO 63103

314-612-4081 314-612-4079

Iowa, Minnesota, Nebraska, North Dakota, South Dakota

M/S 5900, 30 E. 7th St. Suite 1222St. Paul, MN 55101-4940

314-612-4081 651-312-8050

Michigan 985 Michigan Ave., 10th Floor, Detroit, MI 48226 313-234-2398 313-234-2261

Gulf States Louisiana, Mississippi, Alabama 1555 Poydras St, Ste 220-Stop 65New Orleans, LA 70112-3747

504-558-3465 504-558-3490

Arkansas 801 Broadway, MDP 53, Nashville, TN 37203 615-250-5797 615-250-6008

Oklahoma 55 N. Robinson, MS 5021 OKCOklahoma City, OK 73102

405-297-4462 405-297-4370

Northern Texas 1100 Commerce St., Mail Code 5028 DAL, Dallas, TX 75242

214-413-5349 214-413-5704

Southern Texas 300 E. Eighth St., MS 5021 AUSAustin, TX 78701

512-499-5241 512-499-5993

Brazoria, Chambers, Fort Bend, Galveston, Hardin, Harris, Jasper, Jefferson, Liberty, Montgomery, Newton, Orange, Polk, San Jacinto, Trinity, Tyler, Walker Counties

1919 Smith St., 5021 HOUHouston, TX 77002

713-209-4515 713-209-3802

Western Colorado, Idaho, Montana, Utah, and Wyoming

1999 Broadway, MS 5021DEN,Denver, CO 80202-2490

303-603-4570 303-382-6327

Alaska, Hawaii, Oregon, Washington 915 2nd Ave, MS W245, Seattle, WA 98174 206-220-4868 206-220-5531

Arizona, New Mexico, and Nevada 4041 N. Central Ave., Ste. 112, MS 5021PHXPhoenix, AZ 85012

602-636-9358 877-477-9225

California Imperial, Inyo, Orange, Riverside, San Bernardino, San Diego Counties

24000 Avila Rd., M/S 5905Laguna Niguel, CA 92677

949-389-4122 949-389-5004

Fresno, Kern, Kings, Los Angeles, Santa Barbara, San Luis Obispo, Tulare, and Ventura Counties

300 N. Los Angeles St., Stop 5021Los Angeles, CA 90012

213-576-4450 213-576-4401

All California Counties not listed above 1301 Clay St., Ste. 1410S, Oakland, CA 94612 510-637-2404 510-637-2500

All International, Puerto Rico, and U.S. Possessions 7850 SW 6th Court, MS 5780, Plantation, FL 33324 954-423-7043 855-851-8235

Address Correspondence toIRS Advisory Group at:

Contact Numbers

Publication 4235 (Rev. 4-2014) Catalog Number 37262G Department of the Treasury Internal Revenue Services www.irs.gov

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DIRECT DEBIT INSTALLMENT AGREEMENTEligibility Requirements to request Lien Withdrawal:

1. The current amount owed must be $25,000 or less

2. Balance may be paid down to $25,000 or less prior to requesting the lien withdrawal to become eligible.

3. DDIA must pay the full amount owed within 60 months OR before the Collection Statute expires,whichever is earlier.

4. Taxpayer must be in full compliance with other filing and payment requirements

5. Taxpayer must have made three consecutive direct debit payments

6. Taxpayer cannot have previously received a lien withdrawal for the same taxes (unless the withdrawalwas for an improper filing of the lien).

7. You cannot have defaulted on your CURRENT, or any PREVIOUS, direct debit installment agreement.

Who is NOT Eligible

1. Taxpayers who owe more than $25,000

2. Small Business who owe Payroll Trust Fund Taxes

3. Taxpayer has defaulted on their CURRENT, or any PREVIOUS, direct debit installment agreement.

Completion of Form 12277 “Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien”:

A. Check the third box in Section 11 “The taxpayer is under a Direct Debit Installment Agreement”

B. In Section 12 write: "I have a Direct Debit Installment Agreement, the balance is less than $25,000and I have made three payments. I am seeking a withdrawal under the FreshStart program."

Submit Package:(See Publication 4235 "Advisory Group Addresses" to determine which is office should receive your Form 12277)

1. Transmittal Letter

2. Copy of the IRS Direct Debit Installment Agreement Acceptance Letter.

3. Copy of Form 2848 "Power of Attorney and Declaration of Representative"

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DIRECT DEBIT INSTALLMENT AGREEMENT of 169

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Related Forms

Form 9465, InstallmentAgreement RequestFormulario 9465(SP),Solicitud para un Plan dePagos a PlazosForm 433-D, InstallmentAgreementForm 4868, Extension ofTime to File

Payments Topics

Understand Your IRSNoticeForeign ElectronicPaymentsPayment of User Fees(IVES, Historic Easement,U.S. Residency)Video: Your PaymentOptions

Apply for an Online Payment Agreement forIndividuals and Businesses

Español | 中文 | 한국어 | TiếngViệt | Pусский

This application allows a qualified taxpayer or authorized representative (Power of Attorney) theopportunity to avoid long telephone wait times or the need to visit or write to an IRS office to applyfor an installment agreement. Once you complete the online process, you will receive immediatenotification of whether your agreement has been approved.

You can also use the links below to revise an existing Online Payment Agreement (unless you havea Direct Debit Installment Agreement) or to modify your e-authentication security profile.

Do You Qualify?You owe $50,000 or less in combined tax, penalties and interest, and filed all required returns.You may also qualify for a short term agreement if your balance is under $100,000.

What Do You Need to Apply?NameValid e-mail addressAddress from most recently processed tax returnDate of birthFiling statusYour Social Security Number (or spouse's if filed jointly) or Individual Tax ID Number (ITIN)

If your filing status is married filing joint, the Online Payment Agreement application willaccept only the Social Security Number that appears first on your tax return. If your SSNappears second, you must call the number on your bill or notice, or follow the instructionson our installments information page.

If you previously registered for an Online Payment Agreement, Get Transcript, or an IdentityProtection PIN (IP PIN), you should log in with the same user ID and password.

Power of Attorney

Applying as Power of Attorney (POA) for an individual? You need:

Taxpayer's Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)Your Centralized Authorization File (CAF) numberCaller ID from notice or POA's signature date on Form 2848Taxpayer's last year's Adjusted Gross Income (if 2014 was recently filed, then use 2013'sAGI)

Apply as POA for Individual

Do You Qualify?You owe $25,000 or less in combined tax, penalties and interest for the current year or lastyear's liabilities, and filed all required returns.

What Do You Need to Apply?Your Employer Identification Number (EIN)Date your EIN was assigned (MM/YYYY)Address from most recently processed tax returnYour Caller ID from notice

Power of Attorney

Applying as Power of Attorney (POA) for a business? You need:

Individuals

Apply as Individual

Businesses

Apply as Business

Apply for an Online Payment Agreement for Individuals and Businesses https://www.irs.gov/Individuals/Online-Payment-Agreement-Application

1 of 2 2/4/2016 1:19 PM

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Page Last Reviewed or Updated: 04-Feb-2016

Taxpayer's Employer Identification Number (EIN)Your Centralized Authorization File (CAF) numberCaller ID from notice or POA's signature date on Form 2848

Based on the type of agreement requested, you may also need:

Business address of most recently filed tax returnTax form filed or examinedTax period filed or examined

Apply as POA for Business

Apply for an Online Payment Agreement for Individuals and Businesses https://www.irs.gov/Individuals/Online-Payment-Agreement-Application

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WHAT DO YOU DO ONCE YOU RECEIVE A COPY OF THE LIEN WITHDRAWAL?

1. Make sure the lien withdrawal has been filed with the County Clerk where the original lien was filed.2. Keep a copy in a secure place for your records.3. Submit a copy of the Lien Withdrawal to each of the three credit bureaus.

Upon a determination by the IRS to withdraw the filed Form 668(Y) for the Taxpayer, a copy of the Form10916(c), Withdrawal of Filed Notice of Federal Tax Lien can be submitted to the following credit reportingagencies with a request to remove the Tax Lien information from their credit profile. Requests can be submittedvia mail or electronically. Please see each individual credit bureau for their instructions on how to submit a requestto update the Taxpayer's credit information.

CREDIT BUREAUS

MAIL: ExperianP.O. Box 2002Allen, TX 75013-2002888-397-3742Credit Report #_______________

On-Line http://www.experian.com/disputes/main.html

________________________________________________________________________________

MAIL: Equifax Information ServicesP.O. Box 740256Atlanta, GA 30374Credit Report #_______________

On-Line https://www.ai.equifax.com/CreditInvestigation/

________________________________________________________________________________

MAIL: TransUnionP.O Box 2000Chester, PA 19022Credit Report #_______________

On-Line http://www.transunion.com/corporate/personal/creditDisputes.page

NOTE:By obtaining a copy of a credit report from each of the three credit bureaus and providing a "credit report number"the process could be expedited. Some credit report agencies require that you provide a Credit Report number inorder to update your credit profile. Taxpayers can go to www.annualcreditreport.com to request a free annualcredit report.

June 4 , 2004 "The Federal Trade Commission has issued its final rule regarding free annual credit reports under the Fair and AccurateCredit Transactions Act (FACTA) and the Fair Credit Reporting Act (FCRA). FACTA, which was enacted on December 4,2003, amends the FCRA and requires, among other things, that the three nationwide consumer reporting agencies (CRAs) –Equifax, Experian, and Trans Union – provide to consumers, upon request, a free copy of their credit report once every 12months." http://www.ftc.gov/news-events/press-releases/2004/06/ftc-issues-final-rule-free-annual-credit-reports

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You have the right to get a free copy of your credit file disclosure, commonly called a credit report, once every 12 months, from each of

the nationwide consumer credit reporting companies - Equifax, Experian and TransUnion.

For instant access to your free credit report, visit www.annualcreditreport.com.For more information on obtaining your free credit report, visit www.annualcreditreport.com or call 1-877-322-8228.

Use this form if you prefer to write to request your credit report from any, or all, of the nationwide consumer credit reporting companies. The

following information is required to process your request. Omission of any information may delay your request.

If additional information is needed to process your request, the consumer creditreporting company will contact you by mail.

Your request will be processed within 15 days of receipt and then mailed to you.

Annual Credit Report Request Form

Once complete, fold (do not staple or tape), place into a #10 envelope, affix required postage and mail to:

Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30348-5281.

Copyright 2004, Central Source LLC

Equifax

Experian

TransUnion

I want a credit report from (shadeeach that you would like toreceive):

Shade here if, for securityreasons, you want your creditreport to include no more thanthe last four digits of yourSocial Security Number.

Shade Circle Like This >

Not Like This >

Social Security Number:

- -Date of Birth:

/ /Month Day Year

First Name M.I.

Last Name JR, SR, III, etc.

Current Mailing Address:

House Number Street Name

City State ZipCode

ZipCodeStateCity

Apartment Number / Private Mailbox For Puerto Rico Only: Print Urbanization Name

Street NameHouse Number

Previous Mailing Address (complete only if at current mailing address for less than two years):

Fold HereFold Here

Fold HereFold Here

Please use a Black or Blue Pen and write your responses in PRINTED CAPITAL LETTERS without touching the sides of the boxes like the examples listed below:

For Puerto Rico Only: Print Urbanization NameApartment Number / Private Mailbox

31238

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 0 1 2 3 4 5 6 7 8 9

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Alternatives in a Collection Matter

FRESH START/STREAMLINED AGREEMENTS

• In-Business Trust Fund Express

$25,000 or less Full Pay within 24 Months Must be Direct Debit if >$10,000 Must be otherwise compliant May “Pay Down” to qualify

Use Form 9465 to Request or Call 1-800-829-4933

Fresh Start Theory: Use Lien Withdrawals to Encourage DDIAs See EMD Article



$50,000 or less ASSESSED! Full Pay within 72 Months Must be Equal Monthly Installments Must be Direct Debit if over $25,000 Must be otherwise compliant May “Pay Down” to qualify Any type of tax due by Individuals (1040; Trust)

This can often be done online!

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Notices – Caller ID # for Online IA

Taxpayer Copy

POA Copy

Notices – Caller ID # for Online IA

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WHO QUALIFIES?

• Individuals who owe any type of tax;

• Operating Businesses owing income tax liabilities (Form 1120) up to $25,000;

• Defunct Businesses for Any Type of Tax



REQUIRED FINANCIAL DISCLOSURES:

• Up to $25,000: None

• Over $25,000: None • 2nd Page of Form 9465 :

- Financial disclosure as of Jan 2014; required if one has defaulted on an installment agreement within the past 12 months.

-Provides essential financial information to assure to the IRS that the Taxpayer CAN make the monthly payments promised.

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Form 9465(Rev. December 2013) Department of the Treasury Internal Revenue Service

Installment Agreement Request Information about Form 9465 and its separate instructions is at www.irs.gov/form9465.

If you are filing this form with your tax return, attach it to the front of the return. See separate instructions.

OMB No. 1545-0074

Tip: If you owe $50,000 or less, you may be able to establish an installment agreement online, even if you have not yet received a bill for your taxes. Go to IRS.gov to apply to pay online. Caution: Do not file this form if you are currently making payments on an installment agreement or can pay your balance in full within 120 days. Instead, call 1-800-829-1040. Do not file if your business is still operating and owes employment or unemployment taxes. Instead, call the telephone number on your most recent notice. If you are in bankruptcy or we have accepted your offer-in-compromise, see Bankruptcy or offer-in-compromise, in the instructions.

Part IThis request is for Form(s) (for example, Form 1040 or Form 941) and for tax year(s) (for example, 2012 and 2013)

1 a Your first name and initial Last name Your social security number

If a joint return, spouse’s first name and initial Last name Spouse’s social security number

Current address (number and street). If you have a P.O. box and no home delivery, enter your box number. Apt. number

City, town or post office, state, and ZIP code. If a foreign address, also complete the spaces below (see instructions)

Foreign country name Foreign province/state/county Foreign postal code

1 b If this address is new since you filed your last tax return, check here . . . . . . . . . . . . . . . . .2 Name of your business (must be no longer operating) Employer identification number (EIN)

3 Your home phone number Best time for us to call

4 Your work phone number Ext. Best time for us to call

5 Name of your bank or other financial institution:

Address

City, state, and ZIP code

6 Your employer’s name:

Address

City, state, and ZIP code

7 Enter the total amount you owe as shown on your tax return(s) (or notice(s)) . . . . . . . . 7 8 Enter the amount of any payment you are making with your tax return(s) (or notice(s)). See instructions 8 9 Subtract line 8 from line 7 and enter the result . . . . . . . . . . . . . . . . . . 9

10 Enter the amount you can pay each month. Make your payments as large as possible to limit interest and penalty charges. The charges will continue until you pay in full. If no payment amount is listed on line 10, a payment will be determined for you by dividing the balance due by 72 months . . 10

12 Enter the date you want to make your payment each month. Do not enter a date later than the 28th 13 If you want to make your payments by direct debit from your checking account, see the instructions and fill in lines 13a and

13b. This is the most convenient way to make your payments and it will ensure that they are made on time.

a Routing number

b Account number

I authorize the U.S. Treasury and its designated Financial Agent to initiate a monthly ACH debit (electronic withdrawal) entry to the financial institution account indicated for payments of my Federal taxes owed, and the financial institution to debit the entry to this account. This authorization is to remain in full force and effect until I notify the U.S. Treasury Financial Agent to terminate the authorization. To revoke payment, I must contact the U.S. Treasury Financial Agent at 1-800-829-1040 no later than 14 business days prior to the payment (settlement) date. I also authorize the financial institutions involved in the processing of the electronic payments of taxes to receive confidential information necessary to answer inquiries and resolve issues related to the payments.

Your signature Date Spouse’s signature. If a joint return, both must sign. Date

For Privacy Act and Paperwork Reduction Act Notice, see instructions. Form 9465 (Rev. 12-2013)

11 Divide the amount on line 9 by 72 and enter the result . . . . . . . . . . . . . . . 11• If the amount on line 10 is less than the amount on line 11 and you are unable to increase your payment to the amount on line11, complete and attach Form 433-F, Collection Information Statement.• If the amount on line 10 is equal to or greater than the amount on line 11 but the amount you owe is greater than $25,000 butnot more than $50,000, you must complete either line 13 or 14, if you do not wish to complete Form 433-F.

• If the amount on line 9 is greater than $50,000, complete and attach Form 433-F, Collection Information Statement.

14 If you want to make your payments by payroll deduction, check this box and attach a completed Form 2159, Payroll Deduction Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ISA

1040 2004 through 2009

John J. Doe 123-45-6789

Jane J. Doe 987-65-4321

123 Main Street

Anywhere, NJ 08666

732-274-1600 (atty) 11am-7pm

Wells Fargo Bank, NA

200 Main Street

Anytown, NJ 08866

ABC Company

123 Main Street

Anytown, NJ 0886640,000

040,000

560556

28th

01234567

987654321

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Form 9465 (Rev. 12-2013) Page 2Part II Additional information. Complete this part only if you have defaulted on an installment agreement within the

past 12 months and the amount you owe is greater than $25,000 but not more $50,000 and the amount on line 10 is equal to or greater than the amount on line 11. If you owe more than $50,000, complete and attach Form 433-F, Collection Information Statement.

15

16a Marital status:Single. Skip question 16b and go to question 17. Married. Go to question 16b.

b Do you share household expenses with your spouse?Yes.No.

17 How many dependents will you be able to claim on this year's tax return?. . . . . . . . . 17

18 How many people in your household are 65 or older? . . . . . . . . . . . . . . . 18

19 How often are you paid?Once a week.Once every two weeks.Once a month.Twice a month.

20 What is your net income per pay period (take home pay)? . . . . . . . . . . . . . . 20 $

21 How often is your spouse paid?Once a week.Once every two weeks.Once a month.Twice a month.

22 What is your spouse's net income per pay period (take home pay)? . . . . . . . . . . . 22 $

23 How many vehicles do you own? . . . . . . . . . . . . . . . . . . . . . . 23

24 How many car payments do you have each month? . . . . . . . . . . . . . . . . . . . 24

25a Do you have health insurance?Yes. Go to question 25b.No. Skip question 25b and go to question 26a.

b Are your premiums deducted from your paycheck?Yes. Skip question 25c and go to question 26a.No. Go to question 25c.

c How much are your monthly premiums? . . . . . . . . . . . . . . . . . . . 25c $

26a Do you make court-ordered payments?Yes. Go to question 26b.No. Go to question 27.

b Are your court-ordered payments deducted from your paycheck?Yes. Go to question 27.No. Go to question 26c.

c How much are your court-ordered payments each month? . . . . . . . . . . . . . 26c $

27 Not including any court-ordered payments for child and dependent support, how much do you pay for child or dependent care each month? . . . . . . . . . . . . . . . . . . . 27 $

Form 9465 (Rev. 12-2013)

In which county is your primary residence?

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Instructions for Form 9465(Rev. December 2013)Installment Agreement Request

Department of the TreasuryInternal Revenue Service

Section references are to the Internal Revenue Code unless otherwise noted.

What's NewBusiness name and employer identification number. Line 2 is now used for businesses that are no longer operating to provide their name and employer identification number (EIN). See Line 2.

Direct debit. References to electronic funds transfer (EFT) have been replaced with direct debit.

Increased fee amounts. The fee for setting up an installment agreement to make payments by check, money order, credit card, or payroll deduction installment agreement has increased to $120 (from $105). See Payment methods.

Payroll deductions. Line 14 has been added for taxpayers who want to make payments by payroll deduction. See Line 14.

Future DevelopmentsFor the latest developments related to Form 9465 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/form9465.

General Instructions

Purpose of FormUse Form 9465 to request a monthly installment plan if you cannot pay the full amount you owe shown on your tax return (or on a notice we sent you). Most installment agreements meet our streamlined installment agreement criteria. The maximum term for a streamlined agreement is 72 months. In certain circumstances, you can have longer to pay or your agreement can be approved for an amount that is less than the amount of tax you owe. However, before requesting an installment agreement, you should consider other less costly alternatives, such as getting a bank loan or using available credit on a credit card. If you have any questions about this request, call 1-800-829-1040.

Use Form 9465 if you are an individual:Who owes income tax on Form 1040,Who is or may be responsible for a Trust Fund

Recovery Penalty, orWho owes employment taxes (for example, as reported

on Forms 941, 943, or 940) related to a sole proprietor business that is no longer in operation.

Do not use Form 9465 if:You can pay the full amount you owe within 120 days

(see Can you pay in full within 120 days?),You want to request an online payment agreement (see

Applying online for a payment agreement), or

Your business is still operating and owes employment or unemployment taxes. Instead, call the telephone number on your most recent notice to request an installment agreement.

Guaranteed installment agreement. You are eligible for a guaranteed installment agreement if the tax you owe is not more than $10,000 and:

During the past 5 tax years, you (and your spouse if filing a joint return) have timely filed all income tax returns and paid any income tax due, and have not entered into an installment agreement for payment of income tax;

You agree to pay the full amount you owe within 3 years and to comply with the tax laws while the agreement is in effect; and,

You are financially unable to pay the liability in full when due.

Note: It is the practice of the Internal Revenue Service (IRS) to grant these installment agreements even if you can pay your liability in full if the tax you owe is not more than $10,000 and you meet the other criteria.

Can you pay in full within 120 days? If you can pay the full amount you owe within 120 days, call 1-800-829-1040 to establish your request to pay in full. If you can do this, you can avoid paying the fee to set up an installment agreement. Instead of calling, you can apply online.

Applying online for a payment agreement. If your balance due is not more than $50,000, you can apply online for a payment agreement instead of filing Form 9465. To do that, go to IRS.gov and enter “Online Payment Agreement” in the “Search” box.

Bankruptcy or offer-in-compromise. If you are in bankruptcy or we have accepted your offer-in-compromise, do not file this form. Instead, call 1-800-829-1040 to get the number of your local IRS Insolvency function for bankruptcy or Technical Support function for offer-in-compromise.

How the Installment Agreement WorksWe will usually let you know within 30 days after we receive your request whether it is approved or denied. However, if this request is for tax due on a return you filed after March 31, it may take us longer than 30 days to reply. If we approve your request, we will send you a notice detailing the terms of your agreement and requesting a fee of $120 ($52 if you make your payments by direct debit). However, you may qualify to pay a reduced fee of $43 if your income is below a certain level. The IRS will let you know whether you qualify for the reduced fee. If the IRS does not say you qualify for the reduced fee, you can request the reduced fee using Form 13844, Application For Reduced User Fee For Installment Agreements.

Jan 02, 2014 Cat. No. 58607N

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You will also be charged interest and may be charged a late payment penalty on any tax not paid by its due date, even if your request to pay in installments is granted. Interest and any applicable penalties will be charged until the balance is paid in full. To limit interest and penalty charges, file your return on time and pay as much of the tax as possible with your return (or notice). All payments received will be applied to your account in the best interests of the United States.

By approving your request, we agree to let you pay the tax you owe in monthly installments instead of immediately paying the amount in full. In return, you agree to make your monthly payments on time. You also agree to meet all your future tax obligations. This means that you must have enough withholding or estimated tax payments so that your tax obligation for future years is paid in full when you timely file your return. Your request for an installment agreement will be denied if all required tax returns have not been filed. Any refund you are due in a future year will be applied against the amount you owe. If your refund is applied to your balance, you are still required to make your regular monthly installment payment.

Payment methods. You can make your payments by check, money order, credit card, or one of the other payment methods shown next. The fee for setting up an installment agreement for each payment method is also shown.

Payment method Applicable fee

Check, money order, or credit card

$120

Direct debit $52

Payroll deduction installment agreement

$120

For details on how to pay, see your tax return instructions, visit IRS.gov, or call 1-800-829-1040.

After we receive each payment, we will send you a notice showing the remaining amount you owe, and the due date and amount of your next payment. But if you choose to have your payments automatically withdrawn from your checking account, you will not receive a notice. Your bank statement is your record of payment. We will also send you an annual statement showing the amount you owed at the beginning of the year, all payments made during the year, and the amount you owe at the end of the year.

If you do not make your payments on time or do not pay any balance due on a return you file later, you will be in default on your agreement and we may take enforcement actions, such as the filing of a Notice of Federal Tax Lien or an IRS levy action, to collect the entire amount you owe. To ensure that your payments are made timely, you should consider making them by direct debit. See the instructions for lines 13a and 13b.

Requests to modify or terminate an installment agreement. After an installment agreement is approved, you may submit a request to modify or terminate an installment agreement. You may modify your payment amount or due date by going to IRS.gov and entering

“Online Payment Agreement” in the “Search” box. You may also call 1-800-829-1040 to modify or terminate your agreement.

An installment agreement may be terminated if you provide materially incomplete or inaccurate information in response to an IRS request for a

financial update.

For additional information on the IRS collection process, see Pub. 594, The IRS Collection Process.

A Notice of Federal Tax Lien (NFTL) may be filed to protect the government’s interests until you pay in full. However, an NFTL is generally not

filed with a Guaranteed Installment Agreement.

Where To FileAttach Form 9465 to the front of your return and send it to the address shown in your tax return booklet. If you have already filed your return or you are filing this form in response to a notice, file Form 9465 by itself with the Internal Revenue Service Center using the address in the table below that applies to you.

For all taxpayers except those filing Form 1040 with Schedule(s) C, E, or F for any tax year for which this installment agreement is being requested.

IF you live in . . . THEN use this address . . .

Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Texas, Virginia


P.O. Box 47421Stop 74

Doraville, GA 30362

Alaska, Arizona, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Illinois, Maine, Maryland, Massachusetts, Montana, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota, Oregon, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, Wisconsin, Wyoming


310 Lowell St.Stop 830

Andover, MA 01810

Arkansas, California, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, New York, Ohio, Oklahoma, Pennsylvania, West Virginia


Stop P-4 5000Kansas City, MO 64999–0250

A foreign country, American Samoa, or Puerto Rico (or are excluding income under Internal Revenue Code section 933), or use an APO or FPO address, or file Form 2555, 2555-EZ, or 4563, or are a dual-status alien or nonpermanent resident of Guam or the U.S. Virgin Islands*


3651 South I-H 35, 5501AUSCAustin, TX 78741

* Permanent residents of Guam or the U.S. Virgin Islands cannot use Form 9465.

-2-

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For taxpayers filing Form 1040 with Schedule(s) C, E, or F for any tax year for which this installment agreement is being requested.

IF you live in . . . THEN use this address . . .

Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, West Virginia, Wisconsin


P.O. Box 69Stop 811

Memphis, TN 38101–0069

Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming



Ogden, UT 84409

Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont



Holtsville, NY 11742–0480

Delaware, District of Columbia, Florida, Maryland, North Carolina, South Carolina, Virginia

Department of the TreasuryInternal Revenue Service

Stop 4–N31.142Philadelphia, PA 19255–0030

A foreign country, American Samoa, or Puerto Rico (or are excluding income under Internal Revenue Code section 933), or use an APO or FPO address, or file Form 2555, 2555-EZ, or 4563, or are a dual-status alien or nonpermanent resident of Guam or the U.S. Virgin Islands*


3651 South I-H 35, 5501AUSCAustin, TX 78741

* Permanent residents of Guam or the U.S. Virgin Islands cannot use Form 9465.

Specific Instructions

Line 1aIf you are making this request for a joint tax return, show the names and social security numbers (SSNs) in the same order as they appear on your tax return.

Line 1bIf the address you provided on line 1a is new since you filed your last tax return, check the box on line 1b.

Line 2Show the name and employer identification number (EIN) of your business (must be no longer operating).

Line 7Enter the total amount you owe as shown on your tax return(s) (or notice(s)).

If the total amount you owe is greater than $25,000 but not more than $50,000, you must either: (1) Complete lines 13a and 13b and agree

to make your payments by direct debit, or (2) Check box 14 to agree to make your payments by payroll

deduction, and attach a completed, signed Form 2159, Payroll Deduction Agreement. A payroll deduction agreement is not available if you file Form 9465 electronically.

Note: Electronic filing of Form 9465 is not available if the amount you owe is greater than $50,000.

If you do not agree to make your payments by direct debit or payroll deduction, complete Form 433-F, Collection Information Statement, and file it with this form.

If the amount you owe is greater than $50,000, you must complete Form 433-F, and file it with this form. You can download Form 433-F at IRS.gov or order it by calling 1-800-TAX-FORM (1-800-829-3676).

If the total amount you owe is not more than $50,000 (including any amounts you owe from prior years), you do not need to file Form 9465;

you can request an installment agreement online. For more information see Applying online for a payment agreement, earlier.

Line 8Even if you cannot pay the full amount you owe now, you should pay as much as possible to limit penalty and interest charges. If you are filing this form with your tax return, make the payment with your return. For details on how to pay, see your tax return instructions.

If you are filing this form by itself, such as in response to a notice, attach a check or money order payable to “United States Treasury.” Do not send cash. Be sure to include:

Your name, address, SSN/EIN, and daytime phone number.

The tax year and tax return (for example, “2012 Form 1040”) for which you are making this request.

Line 9Subtract line 8 from line 7 and enter the result.

Line 10Enter on line 10 the amount you can pay each month. Make your payments as large as possible to limit interest and penalty charges. The charges will continue until you pay in full. If no payment amount is listed on line 10, a payment will be determined for you by dividing the balance due by 72 months.

Line 11Divide the amount on line 9 by 72 and enter the result.

If the amount on line 10 is less than the amount on line 11 and you are unable to increase your payment to the amount on line 11, complete and attach Form 433-F, Collection Information Statement.

If the amount on line 10 is equal to or greater than the amount on line 11 but the amount you owe is greater than $25,000 but not more than $50,000, you must complete either line 13 or 14, if you do not want to complete Form 433-F. If you have defaulted on an installment agreement within the last 12 months, and the amount you owe is greater than $25,000 but not more than $50,000, you must complete Part II on page 2 of Form 9465.

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If the amount on line 9 is greater than $50,000, complete and attach Form 433-F.

Line 12You can choose the day of each month your payment is due. This can be on or after the 1st of the month, but no later than the 28th of the month. For example, if your rent or mortgage payment is due on the 1st of the month, you may want to make your installment payments on the 15th. When we approve your request, we will tell you the month and day that your first payment is due.

If we have not replied by the date you chose for your first payment, you can send the first payment to the Internal Revenue Service Center at the address shown earlier that applies to you. See the instructions for line 8 above for details on what to write on your payment.

Lines 13a and 13b

Making your payments by direct debit will help ensure that your payments are made timely and that you are not in default of this agreement.

To pay by direct debit from your checking account at a bank or other financial institution (such as a mutual fund, brokerage firm, or credit union), fill in lines 13a and 13b. Check with your financial institution to make sure that a direct debit is allowed and to get the correct routing and account numbers.

Line 13a. The routing number must be nine digits. The first two digits of the routing number must be 01 through 12 or 21 through 32. Use a check to verify the routing number. On the sample check on this page, the routing number is 250250025. But if your check is payable through a financial institution different from the one at which you have your checking account, do not use the routing number on that check. Instead, contact your financial institution for the correct routing number.

Line 13b. The account number can be up to 17 characters (both numbers and letters). Include hyphens but omit spaces and special symbols. Enter the number from left to right and leave any unused boxes blank. On the sample check below, the account number is 20202086. Do not include the check number.

Note. We may have filed a Notice of Federal Tax Lien against your property. If so, you may be able to get the notice of lien withdrawn. To learn more about lien withdrawals and to see if you qualify, visit IRS.gov and enter "lien withdrawal" in the “Search” box.

The direct debit from your checking account will not be approved unless you (and your spouse if filing a joint return) sign Form 9465.

Sample Check—Lines 13a and 13b

Paul Maple Roberta Maple 123 Pear Lane Anyplace, VA 20000

SAMPLE 123415-0000/0000

PAY TO THE ORDER OF $

Routing number (line 13a)

Account number (line 13b)

DOLLARS

ANYPLACE BANK Anyplace, VA 20000

For

Do not includethe check number.

| | :250250025 :202020"'86". 1234

The routing and account numbers may be in different places on your check.

Line 14If you want to make your payments by payroll deduction, check the box on line 14 and attach a completed and signed Form 2159. Ask your employer to complete and sign their portion of Form 2159.

If you choose to make your payments by payroll deduction, you will not be able to file Form 9465 electronically.

Part IIIf you have defaulted on an installment agreement within the last 12 months, and the amount you owe is greater than $25,000 but not more than $50,000, complete Part II on page 2 of Form 9465.

Privacy Act and Paperwork Reduction Act Notice. Our legal right to ask for the information on this form is sections 6001, 6011, 6012(a), 6109, and 6159 and their regulations. We will use the information to process your request for an installment agreement. The reason we need your name and social security number is to secure proper identification. We require this information to gain access to the tax information in our files and properly respond to your request. You are not required to request an installment agreement. If you do request an installment agreement, you are required to provide the information requested on this form. Failure to provide this information may prevent processing your request; providing false information may subject you to fines or penalties.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. However, we may give this information to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia, and U.S. commonwealths and possessions to carry out their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism.

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The average time and expenses required to complete and file this form will vary depending on individual circumstances. For the estimated averages, see the instructions for your income tax return.

If you have suggestions for making this form simpler, we would be happy to hear from you. See the instructions for your income tax return.

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www.irs.gov Form 433-D (Rev. 1-2015)Part 1 — IRS Copy

Form 433-D (Rev. January 2015)


Installment Agreement (See Instructions on the back of this page)

Name and address of taxpayer(s)

Submit a new Form W-4 to your employer to increase your withholding.

Social Security or Employer Identification Number (SSN/EIN)(Taxpayer) (Spouse)

Your telephone numbers (including area code)(Home) (Work, cell or business)

For assistance, call: 1-800-829-0115 (Business), or 1-800-829-8374 (Individual – Self-Employed/Business Owners), or 1-800-829-0922 (Individuals – Wage Earners)

Or write

(City, State, and ZIP Code)

Employer (Name, address, and telephone number)

Financial Institution (Name and address)

Kinds of taxes (Form numbers) Tax periods Amount owed as of

$

I / We agree to pay the federal taxes shown above, PLUS PENALTIES AND INTEREST PROVIDED BY LAW, as follows

$ on and $ on the of each month thereafter

I / We also agree to increase or decrease the above installment payments as follows:

Date of increase (or decrease) Amount of increase (or decrease) New installment payment amount

The terms of this agreement are provided on the back of this page. Please review them thoroughly.

Please initial this box after you’ve reviewed all terms and any additional conditions.

Additional Conditions / Terms (To be completed by IRS) Note: Internal Revenue Service employees may contact third parties in order to process and maintain this agreement.

DIRECT DEBIT — Attach a voided check or complete this part only if you choose to make payments by direct debit. Read the instructions on the back of this page.

a. Routing number

b. Account number

I authorize the U.S. Treasury and its designated Financial Agent to initiate a monthly ACH debit (electronic withdrawal) entry to the financial institution account indicated for payments of my federal taxes owed, and the financial institution to debit the entry to this account. This authorization is to remain in full force and effect until I notify the Internal Revenue Service to terminate the authorization. To revoke payment, I must contact the Internal Revenue Service at the applicable toll free number listed above no later than 14 business days prior to the payment (settlement) date. I also authorize the financial institutions involved in the processing of the electronic payments of taxes to receive confidential information necessary to answer inquiries and resolve issues related to the payments.

Your signature Title (if Corporate Officer or Partner) Date

Spouse’s signature (if a joint liability) Date

FOR IRS USE ONLY AGREEMENT LOCATOR NUMBER:

Check the appropriate boxes:

RSI “1” no further review AI “0” Not a PPIA

RSI “5” PPIA IMF 2 year review AI “1” Field Asset PPIA

RSI “6” PPIA BMF 2 year review AI “2” All other PPIAs

Agreement Review Cycle Earliest CSED

Check box if pre-assessed modules included

Originator’s ID number Originator Code

Name Title

A NOTICE OF FEDERAL TAX LIEN (Check one box below) HAS ALREADY BEEN FILED

WILL BE FILED IMMEDIATELY

WILL BE FILED WHEN TAX IS ASSESSED

MAY BE FILED IF THIS AGREEMENT DEFAULTS

NOTE: A NOTICE OF FEDERAL TAX LIEN WILL NOT BE FILED ON ANY PORTION OF YOUR LIABILITY WHICH REPRESENTS AN INDIVIDUAL SHARED RESPONSIBILITY PAYMENT UNDER THE AFFORDABLE CARE ACT.

Agreement examined or approved by (Signature, title, function) Date

ISA

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Catalog Number 16644M www.irs.gov Form 433-D (Rev. 1-2015)

Part 2 — Taxpayer’s Copy

INSTRUCTIONS TO TAXPAYER

If not already completed by an IRS employee, please fill in the information in the spaces provided on the front of this form for:

• Your name (include spouse’s name if a joint return) and current address; • Your social security number and/or employer identification number (whichever applies to your tax liability); • Your home and work, cell or business telephone numbers; • The complete name, address and phone number of your employer and your financial institution; • The amount you can pay now as a partial payment; • The amount you can pay each month (or the amount determined by IRS personnel); and • The date you prefer to make this payment (This must be the same day for each month, from the 1st to the 28th). We must receive your payment by

this date. If you elect the direct debit option, this is the day you want your payment electronically withdrawn from your financial institution account.

Review the terms of this agreement. When you’ve completed this agreement form, please sign and date it. Then, return Part 1 to IRS at the address on the letter that came with it or the address shown in the “For assistance” box on the front of the form.

Terms of this agreement

By completing and submitting this agreement, you (the taxpayer) agree to the following terms:

• This agreement will remain in effect until your liabilities (including penalties and interest) are paid in full, the statutory period for collection has expired, or the agreement is terminated. You will receive a notice from us prior to termination of your agreement.

• You will make each payment so that we (IRS) receive it by the monthly due date stated on the front of this form. If you cannot make a scheduled payment, contact us immediately.

• This agreement is based on your current financial condition. We may modify or terminate the agreement if our information shows that your ability to pay has significantly changed. You must provide updated financial information when requested.

• While this agreement is in effect, you must file all federal tax returns and pay any (federal) taxes you owe on time. • We will apply your federal tax refunds or overpayments (if any) to the entire amount you owe, including the shared responsibility payment under the

Affordable Care Act, until it is fully paid or the statutory period for collection has expired. • You must pay a $120 user fee, which we have authority to deduct from your first payment(s) ($52 for Direct Debit). You may be eligible for a

reduced user fee of $43. See Form 13844 for qualifications and instructions. • If you default on your installment agreement, you must pay a $50 reinstatement fee if we reinstate the agreement. We have the authority to deduct

this fee from your first payment(s) after the agreement is reinstated. • We will apply all payments on this agreement in the best interests of the United States. Generally we will apply the payment to the oldest collection

statute, which is normally the oldest tax year or period. • We can terminate your installment agreement if:

• You do not make monthly installment payments as agreed. You do not pay any other federal tax debt when due. You do not provide financial information when requested.

• If we terminate your agreement, we may collect the entire amount you owe, EXCEPT the Individual Shared Responsibility Payment under the Affordable Care Act, by levy on your income, bank accounts or other assets, or by seizing your property.

• We may terminate this agreement at any time if we find that collection of the tax is in jeopardy. • This agreement may require managerial approval. We’ll notify you when we approve or don’t approve the agreement. • We may file a Notice of Federal Tax Lien if one has not been filed previously which, may negatively impact your credit rating, but we will not file a

Notice of Federal Tax Lien with respect to the individual shared responsibility payment under the Affordable Care Act.

HOW TO PAY BY DIRECT DEBIT

Instead of sending us a check, you can pay by direct debit (electronic withdrawal) from your checking account at a financial institution (such as a bank, mutual fund, brokerage firm, or credit union). To do so, fill in Lines a and b. Contact your financial institution to make sure that a direct debit is allowed and to get the correct routing and account numbers.

Line a. The first two digits of the routing number must be 01 through 12 or 21 through 32. Don’t use a deposit slip to verify the number because it may contain internal routing numbers that are not part of the actual routing number.

Line b. The account number can be up to 17 characters. Include hyphens but omit spaces and special symbols. Enter the number from left to right and leave any unused boxes blank.

CHECKLIST FOR MAKING INSTALLMENT PAYMENTS:

1. Write your social security or employer identification number on each payment. 2. Make your check or money order payable to “United States Treasury.” 3. Make each payment in an amount at least equal to the amount specified in this agreement. 4. Don’t double one payment and skip the next without contacting us first. 5. Enclose a copy of the reminder notice, if you received one, with each payment using the envelope provided. Make a payment even if you do not

receive a reminder notice. Mail the payment to the IRS address indicated on the front of this form. 6. If you didn’t receive an envelope, call the number below.

This agreement will not affect your liability (if any) for backup withholding under Public Law 98-67, the Interest and Dividend Compliance Act of 1983

QUESTIONS? — If you have any questions about the direct debit process or completing this form, please call the applicable telephone number below for assistance.

1-800-829-0115 (Business) 1-800-829-8374 (Individuals – Self-Employed / Business Owners) 1-800-829-0922 (Individuals – Wage Earners)

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www.irs.gov

“If you want to set up a payment plan, you do not have to wait on hold. If you are current with your tax filings and owe $50,000 or less, hang up and visit us at www.irs.gov to set up an Online Payment Agreement. You must know the filing status and address on your last filed return and have an email address. Save time and money by setting up a Direct Debit payment agreement for a reduced setup fee. Simply type “Online Payment Agreement” into the keyword search to get started. At www.irs.gov, you can also access information to help meet your tax responsibilities, check the status of your individual refund, download forms, and obtain information regarding individual tax topics.” Second, as part of the pilot both the Brookhaven and Seattle ACS call sites will direct taxpayers meeting Streamlined Installment Agreement (SIA) criteria to use the Online Payment Agreement application on www.irs.gov to establish their agreements.

Installment Plans - Online Payment Agreementfor totals under $50,000

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F/Y/E OffersSept. 30 Received

2001 113,209 $314 Million2002 143,102 $300 Million2003 136,822 $244 Million2004 123,970 $275 Million2005 91,343 $326 Million2006 64,169 $284 Million2007 47,719 $229 Million2008 45,163 $200 Million2009 43,211 $157 Million2010 52,104 $130 Million2011 57,836 $154 Million2012 62,597 $196 Million2013 68,797 $195 Million2014 62,504 $179 Million2015 62,473 $205 Million

20% Deposit Effective July 16, 2006.

Dollars Collected

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Page 97 of 169

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Page 99 of 169

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Page 100 of 169

Page Last Reviewed or Updated: 27-Oct-2015


You can get a transcript by mail to view your tax account transactions or line-by-line tax returninformation for a specific tax year. The method you used to file your return and whether you have arefund or balance due, affects your current year transcript availability. Note: If you need a copy ofyour return, you must use Form 4506, Request for Copy of Return.

To use Get Transcript by Mail, you need your Social Security number (SSN) or your Individual TaxIdentification Number (ITIN), date of birth, and address from your latest tax return.

Transcripts arrive in 5 to 10 calendar days at the addresswe have on file for youTranscript Types available by mailFrequently asked questions (FAQs)Get Transcript by Mail en Español

The IRS never sends email requesting that you obtain or access your transcripts. If you receive suchan email, please forward it to our fraud group at [email protected].

Get Transcript https://www.irs.gov/Individuals/Get-Transcript

1 of 1 11/1/2015 2:37 PM

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Page 101 of 169

sarah

Line

Comment by Appeals Officer: Taxpayer has not been compliant since 2001.

In reality, with only a handful of exceptions, the taxpayer has been fully compliant. The taxpayer has

actually overpaid approximately $8,000.

Quarter Ended Filing Payments

03/31/02 Timely Filed Payments were made all on time. However, two payments are

missing from transcript. Client double-paid ...see original cancelled

checks. Client overpaid $8,369.41.

06/30/02 Timely Filed Checks for last three payments of quarter were written timely, but

deposited five to six weeks late. The payments were all made on or

before the due date of the return. Client paid penalty of $1,278.82.

09/30/02 Timely Filed Timely Paid

12/31/02 Timely Filed There was an oversight as to one week’s payment (October 11,

2002). The check was written (#5079) on time but not turned in for

deposit. Client believed that the payment had been made and filed

his form 941 accordingly. Upon receipt of notice from IRS, client

paid promptly. See form 941.


06/30/03 Timely Filed 13 Weekly payments of payroll taxes were paid. A penalty of

$1,761.06 was assessed and paid. We have no idea why.

09/30/03 Timely Filed Taxpayer did fall behind slightly during the first 2 months of the

quarter. All was caught up by October 1. A penalty of $2,905.79

was imposed by the IRS and paid.


03/31/04 Timely Filed Timely Paid. Note, a federal tax deposit penalty was assessed and

abated. A review of the payroll tax return and transcript shows that

all payments were timely made.

06/30/04 Timely Filed 13 Weekly payments of payroll taxes were paid. A penalty of

$606.14 was assessed and paid. We have no idea why.





09/30/05 Timely Filed One of the 13 weekly payments was paid 2 months late (7/29

payroll paid on 9/29/05). All others were paid timely. Client was

assessed a penalty of $948.62 which was paid in full by the client.

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Page 103 of 169

E. MARTIN DAVIDOFF

ATTORNEY AT LAW

353 Georges Road - Suite K P.O. Box 835 Dayton, NJ 08810-0835 [email protected] _____________

TEL: 732-274-1600 FAX: 732-274-1666

December 20, 2014

VIA CERTIFIED MAIL #70050390000151327296

Mrs. S. LopezInternal Revenue Service100 Dey PlaceEdison, NJ 08817

Re: Whitey & Joan FordSS#s: 123-45-6789 & 987-65-4321Forms 1040: 2010 through 2013

Dear Mrs. Lopez:

I am in receipt of your letter dated December 6, 2014 rejecting our request for penalty abatement for theyears 2010 through 2013 for the above-named Taxpayers. Please note that we wish to receive furtherconsideration by an Appeals Officer. In regard to that, I am providing you the following information:

1. I would like to appeal your findings.

2. The name and address of the Taxpayer(s) is:

Whitey and Joan Ford123 Main StreetAnywhere, New Jersey 08666

3. The outstanding facts supporting our position are included in our letter to you of October 31, 2005,a copy of which is attached to this letter.

Under the penalty of perjury, I declare that the facts presented in the accompanying statement are, to thebest of my knowledge and belief, true, correct, and complete.


Very truly yours,

E. Martin Davidoff

Encl.cc: Mr. and Mrs. Whitey Ford (w/out encl.)

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E. MARTIN DAVIDOFF


P.O. Box 835 Dayton, NJ 08810-0835 [email protected] _____________

TEL: 732-274-1600 FAX: 732-274-1666

January 28, 2013VIA CERTIFIED MAIL #Internal Revenue Service-ACS SupportP.O. Box 8208Philadelphia, PA 19101-8208

RE: Joe PepitoneSS#: 123-89-4567Penalty Abatement Request: 2010 Form 1040


We represent the above-named Taxpayer. We are respectfully requesting a full penalty abatement, and interestthereon.

FIRST TIME PENALTY ABATEMENT (IRM Section 20.1.1.3.6.1)

All tax periods immediately preceding 2010 were paid and filed timely by the Taxpayer. We believe he shouldqualify, under (see IRM Section 20.1.1.3.6.1, First Time Abate “FTA”) for the full abatement of penaltiesassessed and/or accrued as follows:

C Accrued Penalty for late payment of tax $ 8,859.72 through 01/14/2013C Late Filing Penalty (5/07/2012) 32,122.12 C Assessed Penalties for late payment of tax 7,852.07

Total Penalties $ 48,833.91

Attached please find Form 2848, Power of Attorney and Declaration of Representative, authorizi ng myrepresentation of the above-referenced Taxpayer.

Thank you for your attention in this matter. Should you have any questions, please do not hesitate to contactme.

EMD:rbencl.cc: Mr. Joe Pepitone (via portal w/o encl.)

OFTEN, THE IRS WILL ONLY ABATE ASSESSEDPENALTIES. A 2nd REQUEST REGARDING ACCRUEDPENALTIES MAY NEED TO BE MADE AFTER THOSE

PENALTIES ARE ASSESSED.

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Where to Send Penalty Abatement Letters

“Here in Brookhaven Campus Compliance, we direct taxpayers calling the Automated Collection System (ACS) to send in their penalty abatement requests to the following addresses if the issue cannot be resolved on the phone. These addresses are for the ACS Support sites servicing New Jersey taxpayers.” For Small Business/Self Employed individuals: Internal Revenue Service PO Box 8208 Philadelphia, PA 19101-8208 For Wage Earning individuals: Internal Revenue Service ACSS Stop P-4 5050 PO Box 219236 Kansas City, MO 64121-9236

(Last update January 29, 2013)

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Sarah

Typewritten Text

Catalog Number 16965S www.irs.gov Form 911 (Rev. 2-2015)

Form 911(February 2015)


Request for Taxpayer Advocate Service Assistance(And Application for Taxpayer Assistance Order)

OMB Number 1545-1504

Section I – Taxpayer Information (See Pages 3 and 4 for Form 911 Filing Requirements and Instructions for Completing this Form.)

1a. Your name as shown on tax return 1b. Taxpayer Identifying Number (SSN, ITIN, EIN)

2a. Spouse's name as shown on tax return (if applicable) 2b. Spouse's Taxpayer Identifying Number (SSN, ITIN)

3a. Your current street address (Number, Street, & Apt. Number)

3b. City 3c. State (or Foreign Country) 3d. ZIP code

4. Fax number (if applicable) 5. Email address

6. Tax form number (1040, 941, 720, etc.) 7. Tax year(s) or period(s)

8. Person to contact if Section II is not being used 9a. Daytime phone number

Check if Cell Phone

9b.Check here if you consent to have confidential information about your tax issue left on your answering machine or voice message at this number.

10. Best time to call

11. Preferred language (if applicable)

TTY/TDD Line Interpreter needed - Specify language other than English (including sign language)Other (please specify)

12a. Please describe the tax issue you are experiencing and any difficulties it may be creating (If more space is needed, attach additional sheets.) (See instructions for completing Lines 12a and 12b)

12b. Please describe the relief/assistance you are requesting (If more space is needed, attach additional sheets.)

I understand that Taxpayer Advocate Service employees may contact third parties in order to respond to this request and I authorizesuch contacts to be made. Further, by authorizing the Taxpayer Advocate Service to contact third parties, I understand that I will notreceive notice, pursuant to section 7602(c) of the Internal Revenue Code, of third parties contacted in connection with this request.13a. Signature of Taxpayer or Corporate Officer, and title, if applicable 13b. Date signed

14a. Signature of spouse 14b. Date signed

Section II – Representative Information (Attach Form 2848 if not already on file with the IRS.)

1. Name of authorized representative 2. Centralized Authorization File (CAF) number

3. Current mailing address 4. Daytime phone numberCheck if Cell Phone

5. Fax number

6. Signature of representative 7. Date signed

John J. Doe 123-43-6789

Jane J. Doe 987-65-4321

123 Main Street

Anywhere NJ 08866

732-274-1666 of representative : [email protected]

1040 2006

E. Martin Davidoff, CPA, Esq. 732-274-1600 ✖

11:00 am to 7:00 pm

See Attached Addendum

1. We request that the IRS allow the release of $4,718 from levy on July 29, 2006 and continue to do so each month until the case in Appeals is heardand completed.2. We also request that the IRS be responsible for all legal fees incurred, as a result of this wrongdoing, by Mr. Maris on behalf of the InternalRevenue Service.

E. Martin Davidoff, CPA, Esq. 00-0000000

E. Martin Davidoff, Attorney at LawPO Box 835Dayton, NJ 08810-0835

732-274-1600

732-274-1666

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Section III – Initiating Employee Information (Section III is to be completed by the IRS only)Taxpayer name Taxpayer Identifying Number (TIN)

1. Name of employee 2. Phone number 3a. Function 3b. Operating division 4. Organization code no.

5. How identified and received (Check the appropriate box)IRS Function identified issue as meeting Taxpayer Advocate Service (TAS) criteria

(r) Functional referral (Function identified taxpayer issue as meeting TAS criteria).(x) Congressional correspondence/inquiry not addressed to TAS but referred for TAS handling.

Name of Senator/RepresentativeTaxpayer or Representative requested TAS assistance

(n) Taxpayer or representative called into a National Taxpayer Advocate (NTA) Toll-Free site.(s) Functional referral (taxpayer or representative specifically requested TAS assistance).

6. IRS received date

7. TAS criteria (Check the appropriate box. NOTE: Checkbox 9 is for TAS Use Only)(1) The taxpayer is experiencing economic harm or is about to suffer economic harm.(2) The taxpayer is facing an immediate threat of adverse action.(3) The taxpayer will incur significant costs if relief is not granted (including fees for professional representation).(4) The taxpayer will suffer irreparable injury or long-term adverse impact if relief is not granted.(if any items 1-4 are checked, complete Question 9 below)(5) The taxpayer has experienced a delay of more than 30 days to resolve a tax account problem.(6) The taxpayer did not receive a response or resolution to their problem or inquiry by the date promised.(7) A system or procedure has either failed to operate as intended, or failed to resolve the taxpayer's problem or dispute within

the IRS.(8) The manner in which the tax laws are being administered raise considerations of equity, or have impaired or will impair the

taxpayer's rights.(9) The NTA determines compelling public policy warrants assistance to an individual or group of taxpayers (TAS Use Only)

8. What action(s) did you take to help resolve the issue? (This block MUST be completed by the initiating employee) If you were unable to resolve the issue, state the reason why (if applicable)

9. Provide a description of the Taxpayer's situation, and where appropriate, explain the circumstances that are creating the economicburden and how the Taxpayer could be adversely affected if the requested assistance is not provided

(This block MUST be completed by the initiating employee)

10. How did the taxpayer learn about the Taxpayer Advocate ServiceIRS Forms or Publications Media IRS Employee Other (please specify)

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Instructions for completing Form 911 (Rev. 5-2011)Form 911 Filing RequirementsWhen to Use this Form: The Taxpayer Advocate Service (TAS) is your voice at the IRS. TAS may be able to help you if you're experiencing a problem with the IRS and:

• Your problem with the IRS is causing financial difficulties for you, your family or your business;• You face (or you business is facing) an immediate threat of adverse action; or• You have tried repeatedly to contact the IRS, but no one has responded, or the IRS has not responded by the date promised.

If an IRS office will not give you the help you've asked for or will not help you in time to avoid harm, you may submit this form. TheTaxpayer Advocate Service will generally ask the IRS to stop certain activities while your request for assistance is pending (forexample, lien filings, levies, and seizures).

Where to Send this Form: • The quickest method is Fax. TAS has at least one office in every state, the District of Columbia, and Puerto Rico.

Submit this request to the Taxpayer Advocate office in the state or city where you reside. You can find the fax number in the government listings in your local telephone directory, on our website at www.irs.gov/advocate, or in Publication 1546,Taxpayer Advocate Service - Your Voice at the IRS.

• You also can mail this form. You can find the mailing address and phone number (voice) of your local Taxpayer Advocate office in your phone book, on our website, and in Pub. 1546, or get this information by calling our toll-free number: 1-877-777-4778.

• Are you sending the form from overseas? Fax it to 1-855-818-5697 or mail it to: Taxpayer Advocate Service, Internal Revenue Service, PO Box 11996, San Juan, Puerto Rico 00922.

• Please be sure to fill out the form completely and submit it to the Taxpayer Advocate office nearest you so we can work your issue as soon as possible.

What Happens Next?

If you do not hear from us within one week of submitting Form 911, please call the TAS office where you sent your request. You canfind the number at www.irs.gov/advocate.

Important Notes: Please be aware that by submitting this form, you are authorizing the Taxpayer Advocate Service to contact third parties as necessary to respond to your request, and you may not receive further notice about these contacts. For more information see IRC 7602(c).

Caution: The Taxpayer Advocate Service will not consider frivolous arguments raised on this form. You can find examples of frivolous arguments in Publication 2105, Why do I have to Pay Taxes? If you use this form to raise frivolous arguments, you may be subject to a penalty of $5,000.

Paperwork Reduction Act Notice: We ask for the information on this form to carry out the Internal Revenue laws of the UnitedStates. Your response is voluntary. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by Code section 6103. Although the time needed to complete this form may vary depending on individual circumstances, the estimated average time is 30 minutes.

Should you have comments concerning the accuracy of this time estimate or suggestions for making this form simpler, please write to:Internal Revenue Service, Tax Products Coordinating Committee, Room 6406, 1111 Constitution Ave. NW, Washington, DC 20224.

Instructions for Section I1a. Enter your name as shown on the tax return that relates to this request for assistance.1b. Enter your Taxpayer Identifying Number. If you are an individual this will be either a Social Security Number (SSN) or Individual

Taxpayer Identification Number (ITIN). If you are a business entity this will be your Employer Identification Number (EIN) (e.g. a partnership, corporation, trust or self-employed individual with employees).

2a. Enter your spouse's name (if applicable) if this request relates to a jointly filed return.2b. Enter your spouse's Taxpayer Identifying Number (SSN or ITIN) if this request relates to a jointly filed return.3a-d. Enter your current mailing address, including street number and name, city, state, or foreign country, and zip code.4. Enter your fax number, including the area code.5. Enter your e-mail address. We will only use this to contact you if we are unable to reach you by telephone and your issue appears

to be time sensitive. We will not, however, use your e-mail address to discuss the specifics of your case.6. Enter the number of the Federal tax return or form that relates to this request. For example, an individual taxpayer with an income

tax issue would enter Form 1040.7. Enter the quarterly, annual, or other tax year or period that relates to this request. For example, if this request involves an income

tax issue, enter the calendar or fiscal year, if an employment tax issue, enter the calendar quarter.Instructions for Section I

continue on the next page �

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Instructions for Section I - (Continued from Page 3)8. Enter the name of the individual we should contact if Section II is not being used. For partnerships, corporations, trusts, etc., enter

the name of the individual authorized to act on the entity's behalf. If the contact person is not the taxpayer or other authorized individual, please see the Instructions for Section II.

9a. Enter your daytime telephone number, including the area code. If this is a cell phone number, please check the box.9b. If you have an answering machine or voice mail at this number and you consent to the Taxpayer Advocate Service leaving

confidential information about your tax issue at this number, please check the box. You are not obligated to have information about your tax issue left at this number. If other individuals have access to the answering machine or the voice mail and you do not wish for them to receive any confidential information about your tax issue, please do not check the box.

10. Indicate the best time to call you. Please specify A.M. or P.M. hours.11. Indicate any special communication needs you require (such as sign language). Specify any language other than English.12a. Please describe the tax issue you are experiencing and any difficulties it may be creating. Specify the actions that the IRS has

taken (or not taken) to resolve the issue. If the issue involves an IRS delay of more than 30 days in resolving your issue, indicate the date you first contacted the IRS for assistance in resolving your issue. See Section III for a specific list of TAS criteria.

12b. Please describe the relief/assistance you are requesting. Specify the action that you want taken and that you believe necessary to resolve the issue. Furnish any documentation that you believe would assist us in resolving the issue.

13-14. If this is a joint assistance request, both spouses must sign in the appropriate blocks and enter the date the request was signed. If only one spouse is requesting assistance, only the requesting spouse must sign the request. If this request is being submitted for another individual, only a person authorized and empowered to act on that individual's behalf should sign the request. Requests for corporations must be signed by an officer and include the officer's title.

Note: The signing of this request allows the IRS by law to suspend any applicable statutory periods of limitation relating to the assessment or collection of taxes. However, it does not suspend any applicable periods for you to perform acts related to assessment or collection, such as petitioning the Tax Court for redetermination of a deficiency or requesting a Collection Due Process hearing.

Instructions for Section II

Taxpayers: If you wish to have a representative act on your behalf, you must give him/her power of attorney or tax information authorization for the tax return(s) and period(s) involved. For additional information see Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, and the accompanying instructions. Information can also be found in Publication 1546, Taxpayer Advocate Service-Your Voice at the IRS.

Representatives: If you are an authorized representative submitting this request on behalf of the taxpayer identified in Section I, complete Blocks 1 through 7 of Section II. Attach a copy of Form 2848, Form 8821, or other power of attorney. Enter your Centralized Authorization File (CAF) number in Block 2 of Section II. The CAF number is the unique number that the IRS assigns to a representative after Form 2848 or Form 8821 is filed with an IRS office.

Note: Form 8821 does not authorize your appointee to advocate your position with respect to the Federal tax laws; to execute waivers, consents, or closing agreements; or to otherwise represent you before the IRS. Form 8821 does authorize anyone you designate to inspect and/or receive your confidential tax information in any office of the IRS, for the type of tax and tax periods you list onForm 8821.

Instructions for Section III (For IRS Use Only) Please complete this section in its entirety.Enter the taxpayer's name and taxpayer identification number from the first page of this form.

1. Enter your name.2. Enter your phone number.3a. Enter your Function (e.g., ACS, Collection, Examination, Customer Service, etc.).3b. Enter your Operating Division (W&I, SB/SE, LS&I, or TE/GE).4. Enter the Organization code number for your office (e.g., 18 for AUSC, 95 for Los Angeles).5. Check the appropriate box that best reflects how the need for TAS assistance was identified. For example, did taxpayer or

representative call or write to an IRS function or the Taxpayer Advocate Service (TAS).6. Enter the date the taxpayer or representative called or visited an IRS office to request TAS assistance. Or enter the date when the

IRS received the Congressional correspondence/inquiry or a written request for TAS assistance from the taxpayer or representative. If the IRS identified the taxpayer's issue as meeting TAS criteria, enter the date this determination was made.

7. Check the box that best describes the reason TAS assistance is requested. Box 9 is for TAS Use Only.8. State the action(s) you took to help resolve the taxpayer's issue. State the reason(s) that prevented you from resolving the

taxpayer's issue. For example, levy proceeds cannot be returned because they were already applied to a valid liability; an overpayment cannot be refunded because the statutory period for issuing a refund expired; or current law precludes a specific interest abatement.

9. Provide a description of the taxpayer's situation, and where appropriate, explain the circumstances that are creating the economic burden and how the taxpayer could be adversely affected if the requested assistance is not provided.

10. Ask the taxpayer how he or she learned about the Taxpayer Advocate Service and indicate the response here.

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Small Business/Self EmployedINTRODUCTION/EXECUTIVE SUMMARY

The IRSAC Small Business/Self-Employed Subgroup (hereafter “Subgroup”) consists of eighttax professionals from wide-ranging backgrounds. Its members include attorneys, certified publicaccountants, and enrolled agents serving the tax system in public practice, education and in privateindustry. The Subgroup’s membership reflects the broad range of taxpayers served by the SB/SEDivision of the Internal Revenue Service (hereafter “SBSE”).

The Subgroup enjoys a close working relationship with the professionals within SBSE. Therelationship has granted this subgroup the opportunity to consult with SBSE leadership on manyissues over the past year. The Subgroup and SBSE consulted both formally and informally on all ofthe issues contained in this report. The Subgroup respectfully recommends the following nine actions relating to the nine issuesraised in this report:

1. Empower Exam Managers as an Alternative to SBSE Fast Track Settlement Program

The principles of the SBSE Fast Track Settlement pilot program should be implemented bygiving examination managers broader authority and mediation training so they can be empowered toresolve disputes at the appropriate level within the examination process.

Worker classification uncertainty can be resolved cooperatively by providing taxpayers withopportunities to remove the uncertainty of worker classification through:

2. Enhance Worker Classification Compliance with Increased Publicity for the VoluntaryClassification Settlement Program

Publicizing and embracing the recently announced Voluntary Worker Classification SettlementProgram (VCSP) that allows employers to resolve past worker classification issues at a reduced costby voluntarily reclassifying their workers, and

3. Provide Tentative Independent Contractor Status for Appropriate Compliant Taxpayers thatProvide Notice to the IRS

Providing compliant taxpayers who have a reasonable basis to treat workers as independentcontractors a forum for transparency within the IRS so they can manage their businesses withreduced uncertainty,

1. Empower Exam Managers as an Alternativep g to SBSE Fast Track Settlement Programg

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sarah

Typewritten Text

Check our links at www.taxattorneycpa.com!

sarah

Typewritten Text

SB/SE Fast Track Audit Program - new in fall 2013!

Agreement to Mediate Date

To: Appeals Team ManagerCompliance Officer Information (The person to contact in Compliance about this case)

Date signed

Other Participants (if applicable)

Form 13369 (4-2003) Catalog Number 35327G Department of the Treasury - Internal Revenue Servicewww.irs.gov

IRS and Treasury employees who participate in any way in the mediation process and any person under contract to the IRS invited to participate, will be subject to theconfidentiality and disclosure provisions of the Internal Revenue Code, including I.R.C. sections 6103, 7213, 7213A, and 7431. See also 5 U.S.C. section 574. The partiesalso acknowledge that IRS and all other Treasury employees involved in the mediation are bound by I.R.C. section 7214(a)(8) and must report information concerningviolations of any revenue law to the Secretary. The Mediator will have the right to ask either party for additional information if deemed necessary for a full understanding ofthe issues being mediated. A copy of any submission a party gives to the mediator will be provided simultaneously to the other party.

The Taxpayer consents to the disclosure by the IRS of the Taxpayer's returns and return information incident to the mediation to any participant or observer for the Taxpayer,including persons providing expert assistance for the IRS. If the mediation agreement is executed by a person pursuant to a power of attorney executed by the Taxpayer, thatpower of attorney must clearly express the Taxpayer's grant of authority to consent to disclose the Taxpayer's returns and return information by the IRS to third parties, and acopy of that power of attorney must be attached to this agreement.

Taxpayer's signature

Taxpayer's signature

Taxpayer's Representative signature

Compliance Officer's signature

Date signed

Date signed

Date signed

Name Position or Affiliation Phone (Include Area Code)



Name

Taxpayer's Identification Number (TIN)

Title

ID/Badge numberOffice telephone number

Year(s)

Source (FE/OE/CO, etc.) MFT

Type of Tax (1040, 1120 Emp., etc) or Collection Issue (CDP, OIC etc)

Taxpayer's name Phone (Include Area Code)

Home street address (P.O. Boxes are not allowed)

City State ZIP code

Representative's name Firm name

Office street address (P.O. Boxes are not allowed)

City State ZIP code

Office phone number (Include Area Code) FAX number (Include Area Code)

OMB No. 1545-1844

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Internal Revenue Bulletin: 2014-53

December 29, 2014

Rev. Proc. 2014–63

Table of Contents

SECTION 1. PURPOSESECTION 2. BACKGROUNDSECTION 3. SIGNIFICANT CHANGES TO REV. PROC. 2009–44 AND ANNOUNCEMENTS 2008–111 AND 2011–6SECTION 4. SCOPE OF MEDIATIONSECTION 5. OFFER-IN-COMPROMISE CASESSECTION 6. TRUST FUND RECOVERY PENALTY CASESSECTION 7. APPLICATION PROCESSSECTION 8. AGREEMENT TO MEDIATESECTION 9. MEDIATION PROCESSSECTION 10. MEDIATION SESSIONSECTION 11. POST-SESSION PROCEDURESSECTION 12. GENERAL PROVISIONSSECTION 13. EFFECTIVE DATESECTION 14. EFFECT ON OTHER DOCUMENTSDRAFTING INFORMATION

Exhibit 1: Addresses for Appeals Area DirectorsExhibit 2: Model Agreement to Mediate

INTERNAL REVENUE SERVICE, APPEALSExhibit 3: Model Mediation Participants ListExhibit 4: Consent to Disclose Tax InformationExhibit 5: Model Mediator’s Report

SECTION 1. PURPOSE

This revenue procedure updates Revenue Procedure 2009–44, 2009–2 C.B. 462, incorporating provisions of Announcements 2008–111 and 2011–6 relating to mediation, to expandand clarify the types of examination and collection cases and issues in the Appeals administrative process that are eligible for mediation pursuant to section 7123(b)(1) of the Internal

Revenue Code (Code).[1] Generally, mediation is available for examination cases and certain collection cases in which a limited number of legal and factual issues remain unresolvedfollowing settlement discussions in Appeals.

SECTION 2. BACKGROUND

Section 7123(b)(1) of the Code, as enacted by section 3465 of the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105–206, 112 Stat. 685, provides thestatutory authority for the Appeals mediation program. Section 7123(b)(1)(A) provides that mediation will be available on any issue unresolved at the conclusion of Appealsprocedures. Section 7123(b)(1)(B) provides that mediation will be available on any issue unresolved at the conclusion of unsuccessful attempts to enter into a closing agreementunder section 7121 or a compromise under section 7122.

In announcements issued in 1995 and 1997, the IRS established procedures for taxpayers to request mediation in Coordination Examination Program cases assigned to AppealsTeam Chiefs. See Announcement 95–86, 1995–44 I.R.B. 27, and Announcement 97–1, 1997–2 I.R.B. 62. In 1998, the IRS announced that it would begin a two-year pilot of anexpanded mediation program that would encompass factual issues arising from examination, involving adjustments of $1 million or more. See Announcement 98–99, 1998–2 C.B. 652.In 2001, that pilot program was extended for an additional year. See Announcement 2001–9, 2001–1 C.B. 357. On July 1, 2002, the IRS published Rev. Proc. 2002–44, 2002–2 C.B.10, which superseded Announcement 98–99 and Announcement 2001–9, formally established the Appeals mediation program, and further expanded the types of cases for whichmediation would be available, including cases where there was an unsuccessful attempt to enter into a closing agreement.

Under these programs, mediation was not available for any collection case or issue. In Announcement 2008–111, 2008–48 I.R.B. 1224, published December 1, 2008, Appealsestablished a two-year pilot program to extend mediation and arbitration to certain collection cases. Under the pilot program, certain offer-in-compromise (OIC) and Trust FundRecovery Penalty (TFRP) cases in Appeals offices in select cities were eligible for mediation.

Rev. Proc. 2009–44 updated and superseded Rev. Proc. 2002–44 to again expand and clarify the types of cases that may be mediated in Appeals. In addition, Rev. Proc. 2009–44provided that mediation may be available for OIC and TFRP cases described in Announcement 2008–111. Announcement 2011–6, 2011–4 I.R.B. 433, published January 24, 2011,extended, without change, the mediation pilot for collection cases, through December 31, 2012.

This revenue procedure consolidates the procedures for mediation of examination cases and issues and collection cases and issues into a single revenue procedure. This revenueprocedure also makes other changes to Rev. Proc. 2009–44, set forth in Section 3. Accordingly, this revenue procedure supersedes Rev. Proc. 2009–44 and Announcements2008–111 and 2011–6.

SECTION 3. SIGNIFICANT CHANGES TO REV. PROC. 2009–44 AND ANNOUNCEMENTS 2008–111 AND 2011–6

Significant changes to Rev. Proc. 2009–44 and Announcements 2008–111 and 2011–6 in this revenue procedure include:

.01 Section 4.04(7) clarifies that “whipsaw” issues include issues on a joint return where both spouses do not agree to participate in the same mediation proceeding or where aspouse is claiming innocent spouse treatment under section 6015.

.02 The mediation process for OIC and TFRP cases is no longer limited to taxpayers in selected cities.

.03 Section 5.01 incorporates from Announcement 2008–11 and Announcement 2011–6 the scope of OIC cases and issues for which mediation is available.

.04 Section 5.02 incorporates from Announcement 2008–11 and Announcement 2011–6 the scope of OIC cases and issues for which mediation is not available.

.05 Section 5.02(6) reflects that mediation is not available at this time for OIC cases that are worked solely at Appeals Campuses/Service Center sites.

.06 Section 6.01 incorporates from Announcement 2008–11 and Announcement 2011–6 the scope of TFRP cases and issues where mediation is available.

Internal Revenue Bulletin - December 29, 2014 - Rev. Proc. 2014–63 https://www.irs.gov/irb/2014-53_IRB/ar10.html

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.07 Section 6.02 clarifies a circumstance in which mediation is not available in TFRP cases. Under this provision, mediation is not available to resolve issues concerning whether aTFRP is collectible. Announcement 2008–11 and Announcement 2011–6 did not expressly exclude this issue from the list of TFRP issues where mediation would be available.

.08 Section 9.01 clarifies that a representative from the Appeals Office of Tax Policy and Procedure may participate in the negotiations to select an Appeals mediator.

SECTION 4. SCOPE OF MEDIATION

.01 In general. Mediation may be used to resolve issues in cases that qualify under this revenue procedure while they are under consideration by Appeals. This procedure may beused only after Appeals settlement discussions are unsuccessful and, generally, when all other issues are resolved but for the issue(s) for which mediation is being requested.

.02 Authority. The mediation procedure does not create any special authority for settlement by Appeals. During the mediation process, Appeals is still subject to the procedures thatwould be applicable if the issue were being considered via the standard Appeals process, including procedures in the Internal Revenue Manual and existing published guidance. Themediator does not have settlement authority and cannot render a decision regarding any issue in dispute.

.03 Applicability. Mediation is available for:

(1) Legal issues;

(2) Factual issues;

(3) A Compliance Coordinated Issue (CCI) or an Appeals Coordinated Issue (ACI). (CCI and ACI issues are listed online at www.irs.gov/appeals). However, a CCI or ACI issue will notbe eligible for mediation when the taxpayer has declined the opportunity to discuss the CCI or ACI issue with the Appeals CCI or ACI coordinator during the course of regular Appealssettlement discussions;

(4) An early referral issue when an agreement is not reached, provided the early referral issue meets the requirements for mediation. For more information on early referrals, seesection 2.16 of Rev. Proc. 99–28, 1999–2 C.B. 109, or the corresponding provision of any successor guidance;

(5) Issues for which a request for competent authority assistance has not yet been filed. Taxpayers are cautioned that if they enter into a settlement with Appeals (including an Appealssettlement through the mediation process) and then request competent authority assistance, the competent authority will endeavor only to obtain a correlative adjustment with thetreaty country and cannot take any actions that would otherwise change the settlement. See section 7.05 of Rev. Proc. 2006–54, 2006–2 C.B. 1035, or the corresponding provision ofany successor guidance. If a taxpayer enters into the Appeals mediation program, the taxpayer may not request competent authority assistance until the mediation process iscomplete, unless the taxpayer demonstrates that a request for competent authority assistance is necessary to keep open a period of limitations in the treaty country. If so, competentauthority assistance may be requested while mediation is pending. Where the requirements of this section have been satisfied and competent authority has been requested, and thetaxpayer must notify the U.S. competent authority that the case is in mediation in Appeals, the taxpayer must notify the mediator that competent authority assistance has beenrequested and that the provisions of this section have been satisfied. The U.S. competent authority will suspend action on the case until mediation is completed;

(6) Unsuccessful attempts to enter into a closing agreement under section 7121;

(7) OIC issues, as provided in Section 5 of this revenue procedure; and

(8) TFRP issues, as provided in Section 6 of this revenue procedure.

.04 Inapplicability. Mediation is not available for:

(1) Cases in which mediation is not appropriate under either 5 U.S.C. § 572 or 5 U.S.C. § 575, which provide the general authority and guidelines for use of alternative disputeresolution in the administrative process;

(2) Issues designated for litigation;

(3) Issues docketed in any court (for the Chief Counsel mediation program involving issues in docketed cases, see Chief Counsel Directives Manual (CCDM) 35.5.5.4);

(4) Collection cases, except for certain OIC and TFRP cases as detailed in this revenue procedure;

(5) Issues for which mediation would not be consistent with sound tax administration, such as, but not limited to, issues governed by closing agreements, res judicata, or controllingSupreme Court precedent;

(6) Frivolous issues, such as, but not limited to, those identified in Rev. Proc. 2012–2, 2012–1 I.R.B. 92, or any subsequent revenue procedure;

(7) “Whipsaw” issues, or issues for which resolution with respect to one party might result in inconsistent treatment in the absence of participation of another party, such as, but notlimited to, issues on a joint return where both spouses do not agree to participate in the same mediation proceeding or where one spouse is claiming innocent spouse treatment undersection 6015;

(8) Cases in which the taxpayer did not act in good faith during settlement negotiations, such as, but not limited to, cases in which the taxpayer failed to timely respond to documentrequests or offers to settle, or failed to address arguments and precedents raised by Appeals;

(9) Cases that were previously mediated through a different alternative dispute resolution program within Appeals, such as Fast Track Settlement or Fast Track Mediation; and

(10) Issues that have been otherwise identified in subsequent guidance issued by the IRS as excluded from the mediation program.

SECTION 5. OFFER-IN-COMPROMISE CASES

.01 In general. Provided all facts are known by both parties, mediation in OIC cases is available for the following issues:

(1) The value of assets, including those held by a third party;

(2) The value of dissipated assets and what amount should be included in the overall determination of reasonable collection potential;

(3) A taxpayer’s proportionate interest in jointly held assets;

(4) Projections of future income based on calculations that do not involve current income;

(5) The calculations of a taxpayer’s future ability to pay when living expenses are shared with a non-liable person;

(6) Whether the taxpayer meets the criteria for deviating from national and/or local expense standards described in Internal Revenue Manual 5.15.1 and as set forth athttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/National-Standards-Food-Clothing-and-Other-Items;

(7) Other factual determinations, such as whether a taxpayer’s contributions into a retirement savings account are discretionary or mandatory as a condition of employment.

.02 Exclusions. Mediation is not available for OIC cases in which:

(1) The taxpayer has the ability to pay in full based on the unadjusted financial information submitted by the taxpayer, except when economic hardship exists;

(2) The taxpayer declines to amend or increase the offer without stating any specific disagreement with the valuations, figures, or methodology used by Appeals in determiningreasonable collection potential;

(3) The disputed issue is explicitly addressed by IRS guidance or authority, including but not limited to regulations, published guidance, the Internal Revenue Manual, forms or


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instructions. For example, the instructions for Form 656 explicitly state that the IRS will not consider expenses for tuition for private schools, college expenses, charitable contributions,and other unsecured debt payments as part of the OIC expense calculation. Therefore, mediation is not available with respect to whether any of these expenses will be considered inevaluating the taxpayer’s offer;

(4) An OIC is submitted as an alternative to collection in a Collection Due Process or equivalent hearing case;

(5) The issue of liability was previously determined by Appeals;

(6) The case was worked solely at an Appeals Campus/Service Center site; or

(7) Delegation Order 5–1 requires a level of approval higher than that of the Appeals Team Manager, such as certain Effective Tax Administration offers or those in which adetermination is made by Appeals that acceptance is not in the best interest of the government (see Policy Statement P–5–100 and IRM 5.8.7, Return, Terminate, Withdraw, andReject Processing).

SECTION 6. TRUST FUND RECOVERY PENALTY CASES

.01 In general. Mediation is available in TFRP cases for the following issues:

(1) Whether the person was required to collect, truthfully account for, and pay over income, employment, or excise taxes;

(2) Whether a responsible person willfully failed to collect or truthfully account for and pay over income, employment, or excise taxes, or willfully attempted in any manner to evade ordefeat the payment of such tax;

(3) Whether a taxpayer sufficiently designated a payment to the trust fund portion of the unpaid tax; and

(4) Whether the taxpayer provided sufficient corporate payroll tax records to establish that a corporate tax deposit was in the amount required by Treas. Reg. § 31.6302–1(c) and,therefore, was considered a designated payment to be applied to both the trust fund and non-trust fund portions of the employment taxes associated with that specific payroll. SeeIRM 5.7.4.3, Investigation and Recommendation of the Trust Fund Recovery Penalty, Calculating the TFRP.

.02 Exclusions. Mediation is not available to resolve issues concerning whether the penalty is collectible (see IRM 5.7.5, Trust Fund Compliance, Collectibility Determination).

SECTION 7. APPLICATION PROCESS

.01 Mediation is optional. A taxpayer and Appeals may request mediation after consultation with each other. Mediation will not occur unless both parties agree to participate in theprocess.

.02 Filing requirements.

(1) Where to file. To request mediation, the taxpayer should send a written request to the appropriate Appeals Team Manager. The taxpayer should also send copies of the writtenrequest to the appropriate Appeals Area Director. (See Exhibit 1 of this revenue procedure for a listing of the addresses for each Appeals Area Director.)

(2) Required information. The mediation request should include:

(a) The taxpayer’s name, taxpayer identification number, and address (and the name, title, address, and telephone number of a different contact person, if applicable);

(b) The name of the Team Case Leader, Appeals Officer, or Settlement Officer;

(c) The taxable period(s) involved;

(d) A description of the issue for which mediation is being requested, including the dollar amount of the adjustment or, if applicable, the OIC in dispute; and

(e) A representation that the issue is not an excluded issue listed in Section 4, Section 5, or Section 6 above.

.03 Review of mediation request. The Appeals Team Manager will confer with the Appeals Office of Tax Policy and Procedure before deciding to approve or deny a mediationrequest. Generally, the Appeals Team Manager will respond to the taxpayer and the Team Case Leader or Appeals Officer within two weeks after the Appeals Team Manager receivesthe request for mediation.

(1) Request approved. If Appeals approves the mediation request, the Appeals Team Manager will inform the taxpayer and the Team Case Leader, Appeals Officer, or SettlementOfficer and will schedule a conference or conference call at a mutually agreeable time that may include a representative from the Appeals Office of Tax Policy and Procedure todiscuss the mediation process.

(2) Request denied. If Appeals denies the mediation request, the Appeals Team Manager will promptly inform the taxpayer and the Team Case Leader, Appeals Officer, or SettlementOfficer. Although no formal appeal procedure exists for the denial of a mediation request, a taxpayer may request a conference with the Appeals Team Manager to discuss the denial.The denial of a mediation request is not subject to judicial review.

SECTION 8. AGREEMENT TO MEDIATE

.01 Written agreement. Upon approval of the request to mediate, the taxpayer and Appeals will enter into a written agreement to mediate. See Exhibit 2 of this revenue procedure for amodel agreement to mediate. A representative from the Appeals Office of Tax Policy and Procedure may participate in the negotiation. The agreement to mediate should:

(a) Be as concise as possible;

(b) Specify the issue(s) that the parties have agreed to mediate;

(c) Contain an initial list of witnesses, attorneys, representatives, and observers for each party;

(d) Identify the location and the proposed date of the mediation session; and

(e) Prohibit ex parte contacts between the mediator and the parties.

The Appeals Team Manager, in consultation with the Team Case Leader or Appeals Officer, will sign the agreement to mediate on behalf of Appeals.

Generally, it is expected that the parties will complete and execute the agreement to mediate within three weeks after being notified that Appeals has approved the mediation request,and will proceed to mediation within 60 days after signing the written agreement to mediate. A taxpayer’s inability to adhere to these timeframes, without reasonable cause, may resultin Appeals’ withdrawal from the mediation process.

.02 Participants. The parties to the mediation process will be the taxpayer and Appeals. Each party must have at least one participant with decision-making authority attending themediation session. The written agreement to mediate will set forth the procedures by which the parties inform each other and the mediator of the participants in the mediation, and willset forth any limitation on the number, identity, or participation of such participants. The parties are encouraged to include, in addition to the required decision-makers, those personswith information and expertise that will be useful to the decision-makers and the mediator. To minimize the possibility of a last minute disqualification of the mediator, each party mustnotify the mediator and the other party of the participants on the party’s mediation team no later than two weeks before the mediation. See Exhibit 3 of this revenue procedure for amodel participants list.

.03 Disclosure. To participate in mediation under this revenue procedure, the taxpayer must consent under section 6103(c) to the disclosure by the IRS of the taxpayer’s returns andreturn information incident to the mediation to the mediator and any participant or observer identified in the initial list of participants and observers and to any subsequent participants


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and observers identified in writing by the parties. The taxpayer must execute a separate consent to disclose the taxpayer’s return and return information. See Exhibit 4 of this revenueprocedure for a model consent. If the agreement to mediate and consent are executed by a person pursuant to a power of attorney executed by the taxpayer, that power of attorneymust clearly express the taxpayer’s grant of authority to consent to disclose the taxpayer’s returns and return information by the IRS to third parties, and a copy of that power ofattorney must be attached to the agreement.

SECTION 9. MEDIATION PROCESS

.01 Selection of mediator and expenses. An Appeals employee trained as a mediator will serve as the mediator under this revenue procedure. Appeals will pay all expensesassociated with the use of an Appeals mediator. A representative from the Appeals Office of Tax Policy and Procedure may participate in the negotiations to select an Appealsmediator. Pursuant to IRM 8.26.5.4.4, the taxpayer and the Appeals Team Manager will select the Appeals mediator from a list of trained employees who, generally, will be located inthe same Appeals office or geographical area as the taxpayer, but will not be a member of the same team that was assigned to the case. Other criteria for selecting a mediator fromAppeals may include previous mediation experience or knowledge of industry practices.

Additionally, at the taxpayer’s expense, the taxpayer may elect to use a co-mediator who is not employed by the IRS. The taxpayer and the Appeals Team Manager will select thenon-IRS co-mediator from any local or national organization that provides a roster of neutrals. A representative from the Appeals Office of Tax Policy and Procedure may participate inthe negotiations to select a non-IRS co-mediator. Criteria for selecting a non-IRS co-mediator may include: completion of mediation training; previous mediation experience;substantive knowledge of tax law; or knowledge of industry practices. An individual is not eligible to be a non-IRS co-mediator if the individual has an official, financial, or personalconflict of interest with respect to the parties, unless such interest is fully disclosed in writing to the taxpayer and the Appeals Team Manager and they agree that the mediator mayserve. See 5 U.S.C. § 573.

All mediators must be neutral. Mediators serve as facilitators, assist in defining the issues, and promote settlement negotiations between the parties. Mediators will inform and discusswith the parties the rules and procedures pertaining to the mediation process. Mediators do not have settlement authority and cannot render a decision regarding any issue in dispute.The parties will continue to have settlement authority for all issues considered under the mediation process.

.02 Appeals personnel as mediators and conflict statement. To address the inherent conflict arising from the Appeals mediator’s status as an employee of the IRS, the Appealsmediator will provide to the taxpayer a statement confirming their proposed service as a mediator and stating that (i) they are a current employee of the IRS, (ii) a conflict results fromthe continued status as an IRS employee, and (iii) this conflict will not interfere in the mediator’s ability to facilitate the case impartially. This statement will also be included in thewritten agreement to mediate.

SECTION 10. MEDIATION SESSION

.01 Discussion summaries. Each party will prepare a discussion summary of the issues (including the party’s arguments in favor of the party’s position) for consideration by themediator. The discussion summaries should be submitted to the mediator and the other party no later than two weeks before the mediation session is scheduled to occur.

.02 Confidentiality. The mediation process is confidential. Therefore, all information concerning any dispute resolution communication is confidential and may not be disclosed by anyparty, participant, observer, or mediator except as provided by statute, such as in section 6103 of the Internal Revenue Code, relating to confidentiality of taxpayer information, and 5U.S.C. § 574, relating to confidentiality in federal administrative alternative dispute resolution proceedings. A dispute resolution communication includes all oral or writtencommunications prepared for the purposes of a dispute resolution proceeding. See 5 U.S.C. § 571(5).

.03 Ex Parte Contacts With Mediator Prohibited. To ensure that one party is not in a position to exert undue influence on the mediator, ex parte contacts with the mediator outside themediation session are prohibited.

The prohibition against ex parte communications with the mediator is intended to apply only to unsolicited contacts from one of the parties with the mediator that occur outside themediation session. The prohibition prevents the mediator from receiving information or evidence from one party that the other party is unaware of and is unable to respond to or rebut.This provision does not prevent the mediator from contacting a party outside the mediation session, or a party from answering a question or request posed by the mediator outside ofthe mediation session provided that the information furnished to the mediator is made available to both parties so that no party is unaware of or unable to respond to or rebut theinformation.

.04 Withdrawal. Either party may withdraw from the process at any time before reaching a settlement of the issue(s) being mediated by notifying the other party and the mediator inwriting.

SECTION 11. POST-SESSION PROCEDURES

.01 Mediator’s report. At the conclusion of the mediation process, the mediator will prepare a brief written report and submit a copy to each party. See Exhibit 5 of this revenueprocedure for a model mediator’s report.

.02 Closing procedures. If the parties reach an agreement on all or some of the issues through the mediation process, Appeals will use established procedures to close the case,including preparation of a Form 906, Closing Agreement on Final Determination Covering Specific Matters. See Statement of Procedural Rules, 26 C.F.R. § 601.106, DelegationOrder 236 (Rev. 3) (addressing settlement authority for issues in a Coordinated Examination Program), or § 7122(b) (regarding OIC cases).

If the parties do not reach an agreement on an issue being mediated, Appeals will not reconsider the mediated issue(s), and a statutory notice of deficiency will be issued with respectto all unagreed issues, or the case will be processed using established closing procedures if there is no deficiency.

.03 Special closing procedures for certain offer-in-compromise cases. For OIC cases with liabilities of $50,000 or more, any settlement or agreement reached through mediation mustbe reviewed by the Office of Chief Counsel pursuant to section 7122(b) before being finalized. When review is required, Appeals will forward the case to Area Counsel for an opinionas to the legal sufficiency of the offer. See IRM 5.8.8, Offer in Compromise, Acceptance Processing, and IRM 8.23.4, Appeals Function, Offer in Compromise, Acceptance, RejectionSustention, and Withdrawal Procedures for non-Collection Due Process (CDP) Offers.

SECTION 12. GENERAL PROVISIONS

01.Communication with IRS and Counsel Permitted. Except as described in Section 10.03 with respect to mediators, Appeals has the discretion to communicate with the IRS Office ofChief Counsel, the originating IRS function, or both, in preparation for or during the mediation session. See Rev. Proc. 2012–18, 2012–10 I.R.B. 455. Appeals also has the discretionto have Counsel, the originating IRS function, or both, participate in the mediation proceeding to present the position and views of the IRS, and to rebut representations andarguments made by the taxpayer. Counsel’s participation in this regard is separate from the review function outlined in Section 11.03 of this revenue procedure.

.02 Employees. IRS employees who participate in or observe the mediation process in any way, and any person under contract to the IRS pursuant to section 6103(n) that the IRSinvites to participate or observe, will be subject to the confidentiality and disclosure provisions of the Internal Revenue Code, including sections 6103, 7213, and 7431.

.03 Section 7214(a)(8) disclosure. Under section 7214(a)(8), IRS employees must report information concerning violations of any revenue law to the Secretary. The agreement tomediate will state this requirement and the parties will acknowledge this duty.

.04 Disqualification of the non-IRS co-mediator. The non-IRS co-mediator will be disqualified from representing the taxpayer in any pending or future action that involves thetransactions or issues that are the particular subject matter of the mediation. This disqualification extends to representing any other parties involved in the transactions or issues thatare the particular subject matter of the mediation.

(a) Disqualification of co-mediator’s firm. Moreover, except as provided in section 12.04(b), the co-mediator’s firm will be disqualified from representing the taxpayer or any otherparties involved in the transactions or issues that are the particular subject matter of the mediation in any action that involves the transactions or issues that are the particular subjectmatter of the mediation.

(b) Exception to disqualification of co-mediator’s firm. The co-mediator’s firm will not be disqualified from representing the taxpayer or any other parties in any future action thatinvolves the same transactions or issues that are the particular subject matter of the mediation, provided that (i) the co-mediator disclosed the potential of such representation to theparties to the mediation conducted by the co-mediator prior to the parties’ acceptance of the co-mediator, (ii) such action relates to a taxable year that is different from the taxable yearthat is the subject matter of the mediation, (iii) the firm’s internal controls preclude the co-mediator from any form of participation in the matter, and (iv) the firm does not apportion to


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the co-mediator any part of the fee therefrom. In the event the co-mediator has been selected prior to the co-mediator learning of the identity of one or more of the parties involved inthe mediation, requirement (i) will be deemed satisfied if the co-mediator promptly notifies the parties of the potential representation.

Although the co-mediator is prohibited from receiving a direct allocation of the fee from the taxpayer (or other party) in the matter for which the internal controls are in effect, theco-mediator will not be prohibited from receiving a salary, partnership share, or corporate distribution established by prior independent agreement. The co-mediator and his or her firmare not disqualified from representing the taxpayer or any other parties involved in the mediation in any matters unrelated to the transactions or issues that are the particular subjectmatter of the mediation.

This section 12.04 only applies to representations on matters before the IRS.

The provisions of this section 12.04 are in addition to any other applicable disqualification provisions, including, for example, the rules of the United States Tax Court and applicablecanons of ethics.

.05. Recording of mediation session. The parties to the mediation may not make a stenographic record, audio or video tape recording, or other transcript of the mediation session.

.06 Use as precedent. A settlement reached by the parties through mediation will not be binding on the parties (or be otherwise controlling) for taxable years not covered by theagreement. Except as provided in the agreement, no party may use such settlement as precedent.

SECTION 13. EFFECTIVE DATE

This procedure is effective December 29, 2014, the date this revenue procedure is published in the Internal Revenue Bulletin.

SECTION 14. EFFECT ON OTHER DOCUMENTS

Revenue Procedure 2009–44 and Announcements 2008–111 and 2011–6 are superseded.

DRAFTING INFORMATION

The principal authors of this revenue procedure are Debra Kohn, Office of Chief Counsel, Procedure and Administration, Charmaine Osbin, Office of Appeals, Tax Policy andProcedure for non-collection cases, and Dale Veer, Office of Appeals, Tax Policy and Procedure for OIC and TFRP cases. For further information regarding this revenue procedure,contact Ms. Kohn at (202) 317-3600, Ms. Osbin at (281) 721-7275, or Mr. Veer at (651) 726-7430 (not toll-free calls).

Exhibit 1: Addresses for Appeals Area Directors

Director, Area 1 IRS Appeals 701 Market Street, Suite 2200 Philadelphia, PA 19106-1538Director, Area 2 – Collection IRS Appeals 10715 David Taylor Drive Charlotte, NC 28262Director, Area 3 IRS Appeals 810 Broadway, Suite 300 Nashville, TN 37203-3810Director, Area 4 IRS Appeals 701 Market St., Suite 2200 Philadelphia, PA 19106-1538Director, Area 5 – Campus IRS Appeals 5000 Corporate Drive Holtsville, NY 11742-2002Director, Area 6 – Campus IRS Appeals 3333 Getwell Road, Stop 86E Memphis, TN 38118-7733Director, Area 7 IRS Appeals 55 North Robinson Oklahoma City, OK 73102Director, Area 8 IRS Appeals 100 First Street. Suite 2000 San Francisco, CA 94105Director, Area 9 IRS Appeals 6377 Riverside Avenue Riverside, CA 92506-3124Director, Area 10 – Campus IRS Appeals 7125 Industrial Road Florence, KY 41042-2907Director, Area 11 – Collection IRS Appeals 100 First Street. Suite 2000 San Francisco, CA 94105Director, Area 12 – Campus IRS Appeals 2525 Capitol Street Fresno, CA 93721-2227Director, Area 13 – Collection IRS Appeals 810 Broadway, Suite 300 Nashville, TN 37203-3810Director, Appeals Team Case Leaders IRS Appeals 300 North Los Angeles Street, Federal Building Los Angeles, CA 90012-3308Director, Specialty Operations – Domestic IRS Appeals 290 Broadway, 11th Floor New York, NY 10007Director, Specialty Operations – International IRS Appeals 300 Pearl Street Buffalo, NY 14202

Exhibit 2: Model Agreement to Mediate

1. The Mediation[2] Process.

The mediation will be an extension of the Appeals process to help [NAME OF TAXPAYER] and Internal Revenue Service (IRS)—Appeals (the PARTIES) reach a negotiatedsettlement of the issues to be mediated. See (2) below for the participants in the mediation process. To accomplish this goal, the mediator will act as a facilitator, assist in defining theissues, and promote settlement negotiations between the PARTIES. The mediator will inform and discuss with the PARTIES the rules and procedures pertaining to the mediationprocess. The mediator will not have settlement authority and will not render a decision regarding any issue in dispute. The PARTIES will continue to have settlement authority for allissues considered under the mediation process.

2. Nature of Process, Participants, Withdrawal.

(a) The mediation process is optional.

(b) Each PARTY must have at least one participant attending the mediation session with decision-making authority. No later than two weeks before the mediation, each PARTY willsubmit to the other PARTY and the mediator a list of the participants who will attend the mediation session on behalf of or at the request of the PARTY, including a designation of theperson with decision-making authority who will represent the PARTY at the mediation session. Each PARTY’s list of participants will contain the participant’s name, the participant’sposition with the PARTY or other affiliation (e.g., a member of XYZ law firm, counsel to the taxpayer), and the participant’s address, [optional: telephone number, and fax number]. Allparticipants attending the mediation on behalf of or at the request of a PARTY will be listed on the PARTY’s list of participants, including witnesses, consultants, and attorneys.

[Insert limitations on the number or types of participants, if any.]

(c) Either PARTY may withdraw from the process at any time prior to reaching a settlement of the issues to be mediated by notifying the other PARTY and the mediator in writing.

3. Selection of Mediator and Costs.

(a) IRS Appeals will pay the costs associated with the Appeals mediator. The taxpayer will pay the cost of a non-IRS co-mediator.

(b) The taxpayer, by signing this agreement, acknowledges that (i) the Appeals mediator is a current employee of the IRS, (ii) a conflict results from his or her continued status as anIRS employee, and (iii) this conflict will not interfere with the mediator’s ability to facilitate the case impartially.

4. Issues to be Mediated.

The mediation session will encompass the following issues in the IRS audit of the federal tax returns of [NAME OF TAXPAYER] for tax year(s)______________:

(a) Issue #1

(b) Issue #2


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5. Submission of Materials.

Each PARTY will present to the mediator a separate written summation not to exceed XX pages (exclusive of exhibits consisting of pre-existing documents and reports) regarding eachissue. The mediator will have the right to ask either PARTY for additional information before the mediation session if deemed necessary for a full understanding of the issues to bemediated. Each PARTY will simultaneously submit to the other PARTY a copy of any submission to the mediator.

6. Place of Mediation.

The PARTIES will attempt to select a site at or near the mediator’s office, [NAME OF TAXPAYER]’s office, or an Appeals office.

7. Proposed Schedule.

Subject to the approval of the mediator, the mediation session will be conducted according to the following schedule:

Submission of Materials to Mediator: A DATE NO LATER THAN TWO WEEKS BEFORE THE DATE OF MEDIATION SESSION

Mediation Session: By MONTH DAY, YEAR and TIME

8. Confidentiality.

IRS employees who participate in or observe the mediation process in any way, and any person under contract to the IRS pursuant to § 6103(n) of the Internal Revenue Code(including the mediator) that the IRS invites to participate or observe, will be subject to the confidentiality and disclosure provisions of the Internal Revenue Code, including §§ 6103,7213 and 7431. See also 5 U.S.C § 574.

9. Ex Parte Contacts Prohibited.

There will be no ex parte contacts from a PARTY to the mediator outside the mediation session. This provision is not intended to prevent the mediator from contacting a PARTY, or aPARTY from responding to the mediator’s request for information.

10. Section 7214(a)(8) Disclosure.

The PARTIES to this agreement acknowledge that IRS employees involved in this mediation are bound by the § 7214(a)(8) disclosure requirements concerning violations of anyrevenue law.

11. No Record.

There will be no stenographic record, audio or video tape recording, or other transcript of the mediation session(s).

12. Report by Mediator.

At the conclusion of the mediation session, the mediator will issue a brief report to the PARTIES identifying each issue described in section 4, above, and whether the PARTIES eitheragreed to resolve or did not resolve the issue.

13. Appeals Procedures Apply.

If the mediation process enables the PARTIES to reach agreement on the issues, Appeals will use established procedures to close the case. Delegation Order 4–24, IRM 1.2.43.22(addressing settlement authority for issues in a Coordinated Examination Program) or § 7122(b) (regarding offer-in-compromise cases) may apply to settlements resulting from themediation process. Appeals will not reconsider the mediated issue(s), and a statutory notice of deficiency will be issued with respect to all unagreed issues (or the case will beprocessed using established closing procedures if there is no deficiency).

14. Precedential Use.

A settlement reached by the PARTIES through mediation will not be binding on the PARTIES (or be otherwise controlling) for taxable years not covered by the agreement. Except asprovided in the agreement, no PARTY may use such settlement as precedent.

INTERNAL REVENUE SERVICE, APPEALS

By: __________________________

Name

Appeals Team Manager

Date: ________________________

NAME OF TAXPAYER

By: __________________________

Name

Title

Date: ________________________

Exhibit 3: Model Mediation Participants List

Case Name: ___________________________________

Submitted By: _________________________________

Date: _______________________

Please list below all participants attending the mediation, including witnesses, consultants, and attorneys. This form must be sent to the other PARTY and to the mediator(s) no laterthan two weeks before the mediation session. Insert an asterisk (*) before the name of the person who has decision-making authority at the mediation session:

NAME, POSITION AND ADDRESS

(TELEPHONE OR FAX NUMBER OPTIONAL)

Exhibit 4: Consent to Disclose Tax Information

Pursuant to section 6103(c) of the Internal Revenue Code of 1986 (as amended), I hereby consent to the disclosure of return information (as defined in section 6103(b)(2)) relating to


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the mediation session between __________________ (Taxpayer) and the Commissioner of Internal Revenue to be held on ______________ (date), as follows:

The Internal Revenue Service may disclose the taxpayer’s return and return information incident to the mediation to the mediator and any participants or observers identified in theinitial list of participants and to any subsequent participants and observers identified in writing by the parties.

This consent relates to the mediation session that is the subject of an agreement to mediate dated____________. I am aware that in the absence of this authorization, the return andreturn information of _______________ (Taxpayer) is confidential and may not be disclosed except as authorized by the Internal Revenue Code.

I certify that I have the authority to execute this consent on behalf of Taxpayer.

Taxpayer Name: ________________________________________________

Taxpayer Identification Number: ____________________________________

Taxpayer Address: ______________________________________________

By: [Name of Individual Executing Consent] ________________________

Title: [Title of Individual Executing Consent] _________________________

Signature: _____________________________________________________

Date: _________________________________________________________

Exhibit 5: Model Mediator’s Report

The parties below agreed to mediate their dispute and attended a mediation session on MONTH DAY, YEAR in an attempt to settle the following issue(s):

ISSUE:

SETTLEMENT: [ ] Yes [ ] No [ ] Partial

Proposed Adjustment Amount: Amount Sustained:

ISSUE:

SETTLEMENT: [ ] Yes [ ] No [ ] Partial

Proposed Adjustment Amount: Amount Sustained:

Settlement documents will be prepared under established Appeals procedures.

DATED this______ day of ____________

____________________________

/s/ Mediator

____________________________

/s/ Party

____________________________

/s/ Party

[1] For purposes of this revenue procedure, the term “mediation” refers only to “non-binding mediation” as set forth in section 7123(b)(1).

[2] For purposes of this agreement, the term “mediation” refers only to “non-binding mediation” as set forth in section 7123(b)(1).

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Page 121 of 169

E. MARTIN DAVIDOFF

ATTORNEY AT LAW


TEL: 732-274-1600 FAX: 732-274-1666

January 5, 2015

VIA CERTIFIED MAIL 70073020000075593190

Ms. Gimme Moore, Revenue OfficerInternal Revenue Service100 Dey PlaceEdison, NJ 08817

Re: Steinbrenner Enterprises, Inc.EIN: 12-3456789Forms 941; 9/30/2013

Dear Ms. Moore:

Please find enclosed check # 1555 in the amount of $500. This check is to be applied to income andpayroll taxes withheld from employees (i.e. trust funds) for the following period:

Quarter Ended Amount

September 30, 2013 $500.00

Please note that no portion of the above payment should be applied to the employer share of FICA, interestor penalties with respect to the period above.

Thank you for your attention to this matter.

Very truly yours,

E. Martin Davidoff

EMD:safEncl.

cc: Steinbrenner Enterprises, Inc. (w/encl.; via first class mail)Mr. Yogi Berra (w/encl.; via first class mail)

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E. MARTIN DAVIDOFF

ATTORNEY AT LAW


TEL: 732-274-1600 FAX: 732-274-1666

January 5, 2011

VIA CERTIFIED MAIL #7008 2810 0001 1969 1111

Mr. Jeffrey AustinInternal Revenue ServiceDisclosure Scanning Operation - Stop 93AP.O. Box 621506Atlanta, GA 30362-3006

RE: Cletis (Clete) Leroy BoyerSSN# 123-45-6789Form 1040: 2007 and 2008

Dear Mr. Austin:

We represent Cletis Leroy Boyer (the “Taxpayer”; see attached, IRS Form 2848). Pursuant to the PrivacyAct of 1974, 5 U.S.C. Section 552a (the “Privacy Act”), Section 6103 & 7602(c) of the Internal RevenueCode (“IRC”) and the Freedom of Information Act, 5 U.S.C. Section 552, as amended, (“FOIA”), we wishto obtain access to and copies of the following records maintained by the Internal Revenue Service (“IRS”):

1. The History Transcript or similar Time Records by the IRS for the Taxpayer and periods/yearsset forth above for the specific time period of January 1, 2007 through the date of this request.

2. All entries entered into the IRS computer systems by those conducting the recent examinationof the Taxpayer’s 2008 Form 1040.

3. A list of all third party contacts that IRS representatives have been in communication with aboutthe above-referenced Taxpayer for the specific time period of January 1, 2007 through the dateof this request.

4. The entire administrative file for 2007 and 2008

5. Please refer to the attached copy of the 2007 IRS account transcript showing a removed paymentof $25,000 near the last few lines. There is also a denial of either a claim made of Form 843 orpenalty abatement request referenced as well. We will be discussing the missing $25,000payment with an Appeals Officer when our case is assigned and we need to find out whathappened to it in the IRS records. Please pursue research pertinent to that missing paymentthroughout any tax year from 2007 through 2012 and forward me any information from notes,conversations, telephone calls or written correspondences regarding that item. AnyCorrespondence records, Telephone logs, or other kind of Documentary files would be veryhelpful.

This case file was most recently assigned to the Technical Services - SBSE group in Springfield, NewJersey with James Jones (ID# 9909900, Phone: 123-456-9999).

If possible, we would appreciate if you could forward materials become available.

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sarah

Typewritten Text

(SAMPLE FOIA REQUEST)

Mr. Jeffrey AustinJanuary 5, 2011Page 2 of 2

SECTION 601.702(B)(3) STATEMENT

In accordance with IRS Statement of Procedural Rules, Reg. Section 601.702(b)(3), we agree to payreasonable charges incurred in locating and copying the requested documents, to an upper limit not to exceed$100. If the disclosed information exceeds 300 pages, we request that the data be saved to a CD in lieu ofreceiving paper copies.

If you decide that any portion of the requested information is exempt from disclosure under the Act, Irequest that you send me the remaining non-exempt portion of that record. In addition, to the extent thataccess is denied to inspect any part of the requested administrative files and documents, please send me anindex and a detailed description of the deleted material and a statement of the statutory basis for withholdingeach such document.

In accordance with the provisions of IRC §§ 6103, 6203 and 7602(c), 5 U.S.C. Section 552, as amended,and 5 U.S.C. § 552A, we anticipate receiving a reply within twenty working days.

Kindly acknowledge receipt of this request by countersigning the enclosed copy of this letter andreturning the same in the enclosed self-addressed stamped envelope. Please keep me advised as to the statusof the above-referenced request.

Very truly yours,

E. Martin Davidoff

EMD:rbcc: Mr. Cletis LeRoy Boyer(w/o encl.)Encl.

RECEIPT ACKNOWLEDGED:

INTERNAL REVENUE SERVICE

BY:____________________________

TITLE:_________________________

DATED:________________________

EMD COMMENT: If the case needs urgent expediting, please see thefollowing pages for additional wording to use & sample.

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11.3.13.8 (08-04-2013)Response and Closing

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FAX COVER SHEETTo: Rachel Baldwin of E. Martin Davidoff & Associates

FAX #: 732-274-1666

From: _________________________________, IRS Disclosure Officer

Phone: _________________________________

Kindly acknowledge receipt of this FOIA request by countersigningbelow and returning this fax cover sheet to our office via facsimile to 732-274-1666. ________________________________________________________

MATTER: Cletis Leroy BoyerFORMS1040: 2007 & 2008FOIA Request Dated: January 5, 2011

___________________________________________________________________________________________

I do hereby acknowledge the Freedom of Information Act request submittedby E. Martin Davidoff to the Internal Revenue Service dated January 5, 2011 withrespect to the above-referenced matter.

INTERNAL REVENUE SERVICE

SIGNATURE:_______________________________________

TITLE:_______________________________________

DATE:________________________________________

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Page Last Reviewed or Updated: 08-Apr-2014

Enacted in 1966, the Freedom of Information Act, or FOIA,gives any person the right to access federal agency recordsor information. The FOIA is based on the presumption thatthe government and its information belong to the people.

The Freedom of Information Act,5 U.S.C. § 552IRS FOIA Regulations,26 CFR § 601.702IRS Policy Statement 11-13

A 1996 amendment to the FOIA, required federal agenciesto make many types of records available online. Visit theIRS eReading Room to learn more.

New law, like the OPEN Government Act, as well as newpolicies, such as those issued by the President and theAttorney General, promote the spirit of transparencyenvisioned by our founding fathers.

Electronic Reading RoomOPEN Government ActWhite House FOIA MemoAttorney General FOIA Memo

Routine access to IRS recordsThe IRS offers routine access to other records throughprocedures designed to make access quick and easy. Formore information, use the Routine Access link at the right. If you are working directly with and IRS employee on anopen tax case, you can request information from the filedirectly from them.

Routine access to IRS Records

Formal requests If you plan to make a FOIA request to obtain the recordsyou seek, you may refer to the IRS FOIA Guide. IRS maywithhold records protected from disclosure by one of thelaw’s nine exemptions and it must withhold when disclosureof the records is prohibited by law.

IRS FOIA Guide HTML PDF

FOIA public liaisonsTo assist FOIA requesters each IRS Disclosure Officeserves as a FOIA Service Center and each DisclosureManager is a FOIA Public Liaison. These liaisons areadvocates for FOIA requesters to help resolve problemsencountered in the process.

IRS Disclosure Offices, FOIAService Centers

IRS Freedom of Information http://www.irs.gov/uac/IRS-Freedom-of-Information

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Page Last Reviewed or Updated: 09-Dec-2015

IRS Disclosure Offices

Submitting Your Freedom of Information Act (FOIA) Request to IRS

IRS accepts FOIA requests by fax or by mailIf your request is for IRS Headquarters Officerecords not available at the ElectronicReading Room site:

If your request is for your own records orother records controlled at IRS fieldlocations:

Fax: 877-807-9215Mail: IRS FOIA RequestHQ FOIAStop 211PO Box 621506Atlanta, GA 30362-3006

Fax: 877-891-6035Mail: IRS FOIA RequestStop 93APost Office Box 621506Atlanta GA 30362-3006

Determining Your Request Status and Resolving Issues with Your Request

FOIA requestors who have questions or want to know the status of a request may contact theFOIA Public Liaison for their state listed below. The Public Liaison will direct your inquiry to theFOIA Requestor Service Center that is handling the request.

Following response from the Service Center staff, FOIA requestors who require more informationor assistance may contact the IRS Disclosure Manager, who serves as the FOIA Public Liaison forthat Center. The Service Center staff member can provide the name and contact information for thePublic Liaison for that office. The Public Liaison can assist with reducing delays, explaining thestatus of the request, and resolving disputes.

If you live in: Contact:

Connecticut, Maine, Massachusetts, Michigan, New Hampshire,Rhode Island, Vermont

Public Liaison: Ron MelePhone: 860-756-4430

Delaware, Maryland, New Jersey, New York, Pennsylvania Public Liaison: JeffreyAustinPh: 267-941-6424

Illinois, Indiana, Kentucky, Ohio, West Virginia Public Liaison: Bruce HayesPhone: 312-292-4311

District of Columbia, Florida, North Carolina, South Carolina,Virginia, US Territories

Public Liaison: JasonAngelottiPhone: 954-423-7163

Alabama, Arkansas, Georgia, Mississippi, Tennessee Public Liaison: FredCrismonPh: 615-250-5866

Louisiana, Oklahoma, Texas, Wisconsin Public Liaison: SharisseTompkinsPh: 214-413-5293

Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska,Wyoming

Public Liaison: PhillipHatcherPh: 816-499-4683

Idaho, Montana, North Dakota, Oregon, South Dakota, Utah,Washington

Public Liaison: Byron EndoPh: 801-612-4763

Arizona, Hawaii, Nevada, New Mexico, Southern CA

Public Liaison: DavidNimmoPh: 949-389-4385

Alaska, Northern California

Public Liaison: Celeste NealPh: 510-907-5578

IRS Disclosure Offices https://www.irs.gov/uac/IRS-Disclosure-Offices

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E. MARTIN DAVIDOFF


P.O. Box 835Dayton, NJ 08810-0835


January 23, 2015

VIA FACSIMILEJanine Turner, Disclosure OfficerInternal Revenue ServiceP.O. Box 748, 1st FloorSpringfield, NJ 07081-0748

Tel: 973-921-4033Fax: 973-921-4352

RE: ABC Company, Inc.EIN: 22-1234567

RESPONSE REQUIRED UNDER SECTION 7602(c)(2)

Dear Ms. Turner:

In accordance with section 7602(c)(2) of the Internal Revenue Code, I hereby request on behalf of theabove-named Taxpayer a record of all persons contacted with respect to the determination of any tax liabilityagainst the above-named Taxpayer for any taxable period or year through this date. As the Taxpayer'srepresentative, I ask that you transmit the record to my office, with a copy to the Taxpayer.

Please see that we receive a response with seven (7) days of your receipt of this letter.

Please note that we will continue to make these requests under IRC§7602(c)(2) until you have advisedus in writing that there is no longer a need to make third-party contacts with respect to the above-namedTaxpayer.

For your convenience, please find enclosed Form 2848, Power of Attorney and Declaration ofRepresentative, authorizing me to act on behalf of the above-named Taxpayer.

Very truly yours,

E. Martin Davidoff

EMD:crencl.cc: ABC Company, Inc. (w/out encl.)

LeMann Squeezer, Revenue Office (w/out encl.)

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E. MARTIN DAVIDOFF

ATTORNEY AT LAW


Dayton, NJ 08810-0835 emd@ taxattorneycpa.com

_____________ TEL: 732-274-1600 FAX: 732-274-1666

January 5, 2015VIA CERTIFIED MAIL#70050390000451287639

Internal Revenue ServiceHoltsville, New York 00501

Re: Elston HowardSS#: 123-45-6789Deposit in the Nature of a Cash Bond pursuant to Section 6603 2001 Form 1040


Please find enclosed check # 864 in the amount of $50,000 payable to the United StatesTreasury. This payment is hereby designated as a deposit pursuant to Section 6603(a) of theInternal Revenue Code. Pursuant to Rev. Proc. 2005-18, the following information is required.

1. Type of Tax

Income Tax

2. Tax Year

2001

3. Identification and Description of Disputable Tax

The amount of the disputable tax is set forth in the 30-day letter provided by the InternalRevenue Service on August 30, 2006 setting forth a balance due $248,339. A copy of the 30-day letter is enclosed herein.

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4. Filing of Tax Court Petition

In the event that a Tax Court petition is filed in connection with the above-referenced tax forthe above- referenced period, the enclosed payment shall continue to be treated as a depositduring the applicable Tax Court proceeding.

Please return the duplicate copy of the check enclosed with your acknowledgment that it hasbeen received and applied as a deposit in the nature of a cash bond pursuant to section 6603 ofthe Internal Revenue Code. For your convenience, I have enclosed a self-addressed, stampedenvelope.


Very truly yours,

E. Martin Davidoff

EMD:ed

Encls.

cc: Mr. Elston Howard

(w/out Encls. & via First Class Mail)

Note, this procedure has been added by Code Section 6603 added by the American Jobs

Creation Act of 2004. Section 6603 supercedes Revenue Procedure 84-58. Section 6603 also

provides for interest for refunds of deposits paid with respect to a “disputable tax”.

Further clarification and procedures are outlined in Revenue Procedure 2005-18, I.R.B.

2005-13 (3/28/05). This Revenue Procedure sets forth some very important rules, some of

which are counter-intuitive.

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E. MARTIN DAVIDOFF

ATTORNEY AT LAW


TEL: 732-274-1600 FAX: 732-274-1666

January 5, 2015

VIA FEDERAL EXPRESSInternal Revenue ServiceAttn: E:3:SF:3044 S Clinton AvenueStation Plaza #3Trenton, New Jersey 08609

[See Publication 3498] RE:John DoeTaxpayer ID# 123-45-6789Form 1040: 2011


We hereby protest certain findings of the examining agent set forth in the thirty-day letter datedDecember 14, 2014 and the accompanying examination report attached hereto, the response to which has beenextended by James E. O’Hara until February 6, 2015.

1. Statement of Appeal

We wish to appeal such findings to the Office of the Regional Director of Appeals and we requesta conference in that office.

2. Name, Address and Daytime Phone Number

John Doe123 Main StreetAnywhere, New Jersey 08876Taxpayer ID# 123-45-6789

Daytime Telephone Number:Please note that the Taxpayer is represented by me and I may be reached at 732-274-1600. In myabsence, Fanny Mae, my paralegal, is familiar with the case and will be in a position to schedulespecific times for an appeals officer to speak with me.

3. Date and Symbols of Transmittal Letter

The date and symbols of the letter transmitting the proposed adjustments are as follows:

December 14, 2014Refer Reply to: E:1403:30:SFLetter 950(Rev 2-2008)

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Internal Revenue ServiceJanuary 5, 2015Page 2

4. Tax Periods Involved

Taxable year ended December 31, 2011

5. Adjustments with which the Taxpayer Does Not Agree

John Doe (the “Taxpayer”) disputes the adjustments identified in Form 4549-A, which wouldincrease the Taxpayers’ taxable income by $356,620 for December 31, 2011. The Taxpayer alsodisputes the assessment of the Accuracy-IRS 662 penalty and that the proposed assessment of suchpenalty is inconsistent with the Taxpayer’s previously agreed assessments.

In our analysis below, we are addressing the issues raised in Revenue Agent Jones’ 30-pageExplanation of Items, Form 886A, set forth as part of the report accompanying the adjustments to thenet income flowing through to the Taxpayer as the sole shareholder of ABC, Inc.

6. Statement of Facts, Law and Supporting Arguments.

A. Overview

[Insert Appropriate Language]

The undersigned hereby submits this protest along with the accompanying documents but does not knowpersonally that the facts contained herein are true and complete. However, I declare that the facts presentedherein are, to the best of my knowledge and belief, true, correct and complete.

A power of attorney (Form 2848) authorizing the undersigned to represent the Taxpayer in this matteris enclosed.

Respectfully submitted,

E. Martin Davidoff

EMD/safEncls.cc: John Doe (via first class mail)

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Controversy Status SheetJohn Doe

Engagement Start Date: January 10, 2016

Issues

1. Client owes taxes, penalties and interest for tax years 2011 through 2014. 2011: $58,847.2012: $75,495.392013: $62.402.912014: $32,679.90

2. Client has not made any estimated payments for tax year 2015 as of point of engagement.

3. Penalties for late payment amount to approximately $35,000. Does client wish us toaddress this?

Procedural Status1. We provided Form 433-A and request for installment agreement of $1,552 per month on

January 21, 2016 to Revenue Officer Elston Howard via 2-day Federal Express. Awaiting action by Revenue Officer. Receipt Confirmed on 1/29/16. No time-lineprovided by RO as to when case will be evaluated. WE ARE WAITING!

2. Notice of Intent to Levy has been issued on 12/17/15. Opportunity for Equivalencyhearing ends on 12/16/16.

3. 2015 Return promised to be timely-filed and fully paid. $4,000 estimated tax paymentwas made on 1/15/16.

Goals1. Get client current with tax payments.

-$4,000 Estimated tax payment made on 01/15/2016

2. Enter into payment plan with the IRS for Income Tax for taxes due.

3. Educate client on need to make estimated tax payments for any freelance income. Inaddition educate client on the need to keep accurate records of expenses.

4. Penalty abatement may be a possibility.

5. Educate client on need to keep separate accounts for personal and business purposes.

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Prognosis/Strategy

1. Client income was unusually low in 2015. Net income for 2015 is approximately$106,000 from Schedule C. Taxpayer had much higher in 2014 and anticipates muchhigher in 2016. Is expecting significant funds (over $100,000) in first quarter of 2016 dueto billing of 2015 services in early 2016.

Taxpayer anticipates a full-time position at $150,000 per year and will still maintain aschedule C business in the $50,000 to $100,000 range.

Accordingly, goal is to quickly secure an installment agreement based upon 2015 income. Thus, 2015 income tax return must be filed quickly and, at that point, we can push IRS tosecure an installment agreement prior to disclosing 2016 income levels.

2. Client deposited funds from his schedule C business into account for inactive company,Doe Company., Inc. This is confusing to anyone evaluating his financial status. We didprovide copies of statements in the inactive company to Revenue Office. We haveadvised client to close the bank account to Doe Inc. and to deposit all income from hisbusiness into a business account, pay all personal expenses from his personal account,and simply transfer from business to personal draws as needed/desired.

3. Will explore possibilities with client on how to approach penalty abatement.

Next Steps (Overview)

1. Set up time certain call with Client to discuss penalty and whether he would like us topursue. If so, come up with plan to secure abatement. Inquire of client whether penaltieswere assessed in 2008 through 2010.

2. Follow-up with EMD between 2/15 and 2/20 to evaluate case status and next action.

3. Close Doe Inc. bank account.

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Sample Status SheetGOALS of Johnny Blanchard

1) Stop Collection / Levies2) Penalty Abatement ($40,000)3) Refund of $6270 for 2001 Form 1040 barred by statute of limitations4) Refund of $18,100 for 2002 Form 1040 barred by statute of limitations5) Installment Agreement: $2,000 per month6) Use FOIA with respect to when IRS received the 2001 and 2002 returns7) Amount due based on Federal Tax Summary dated 3/26/09:

approximately $146,000Procedural Status

1058A Notice of Intent to Levy Filed 08/25/08

Form 12153 Request for Due Process or Equivalency Hearing Filed 09/26/08 via faxIRS Rec'd 09/29/08 via mail

Letter 3172 Notice of Federal Tax Lien Filing & Right to a Hearing Letter Date 09/04/2008

Form 12153 Request for Due Process or Equivalency Hearing Filed 09/26/08 via faxIRS Rec'd 09/29/08 via mail

2007 Form 1040 Sent via FedEx on 3/18/09 to Hector Lopez, IRS Lisa confirmed receipt 3/19/09

2003, 2004 & 2005 Sent via FedEx on 3/18/09 to Hector Lopez, IRS Lisa confirmed receipt 3/19/09

Equivalent / CDP Hearing Met with Hector Lopez, Settlement Officer April 1, 2009in Newark. Need additional informationto receive determination.

NOTICE CP59 IRS “Request for Your Tax Return”: 2007 Form 1040 April 13, 2009

Item Due Due Date or follow-up

Confirmation of JohonnyBlanchard’s engagement withJones & Jones CPA

CPAs to send out letter via fax & mail on 4/7/2009. On 4/8/09 HectorLopez confirmed receipt of our fax (was due by APRIL 13, 2009).

433A Client to clarify regarding business transaction (See Memo to file10/27/08): Per conversation with Mr. Blanchard, he is on his 3rd or 4th

buyer for business transaction, now hoping to close sometime in lateMarch or early April. GAVE COPY OF 433-A completed byJohnny Blanchard to Hector Lopez of IRS on April 1, 2009.

2008 Form 1040 On Extension, John to send me a copy of the extension(4/21/09). Return is due October 15, 2009. He needs the K-1from his company.

Business Transaction as of4/20/09

Still working with same client since EMD & I spoke with Johnon April 1st regarding the status of the business transaction.

W:51\2011_April30_AAACPA_Galloway.Sample Status Sheet.wpdApril 25, 2011

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Daniel & Holly Jones - 1/22/2016

1. Owes for 2011, 2012 and 2013 approximately $74,000.

2. Had been in installment agreement of $380 per month prior to examination.

3. Three children. Large medical bills for 2nd child. Previously had lost $60,000 on thehouse and had to write a check for $40,000 or so.

4. Audit adjustments have not been reported to the States. Audit added income fromretirement plan distribution ($75,000) and unemployment ($13,000). This was a CP-2000, matching notice. Includes $7,500 of penalties.

5. Income: $350,000

6. Assets: FMV of home: $425,000. Mortgage $343,000

7. Life Insurance: Two whole life $100,000 policies. Cash Value: $0.

8. Retirement Plans: $12,000 for Sandy; $60,000 for Daniel.

9. Stock Plan: $8,000.

10. Attempted penalty abatement: Denied, not appealed.

11. From 2009 and forward have always had issues with timely payment of taxes. Prior to2008 had been clean.

SAMPLE OF INITIAL CLIENT MEETING NOTES of 169

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Plan of Action

1. Complete 2015 tax returns by 2/28/16. Discuss with our office prior to filing. Goal is tofile and owe nothing. Make sure you have funds by the time you file to pay off.

2. Have preparer project 2016 taxes periodically to ensure that you are paying 95% to 100%of tax. You do not want to be overpaid or significantly underpaid.

3. Engage our firm to do a federal tax summary which will allow you to see clearly anypenalties that have been assessed. Cost to our firm will be fixed at $500. You can getAccount Transcripts for 2011, 2012 and 2013 on line at www.irs.gov (You order onlineand transcripts are mailed to you) or you can provide us with powers of attorney and wewill download.

4. With information in hand, you can file a form 911 with the Taxpayer Advocate forabatement of penalties. Be specific with your request. If assigned advocate is nothelpful, speak to a supervisor. Attach documentation and be as specific as you canregarding why your issues are tied to failure to report income or late payment of taxes.

5. Plan to pay off $74,000:

a. Pay down to $49,000 or less; Apply to 2013. Can mail check to IRS at addressthey inform you of, can go to www.irs.gov and pay through their IRS Direct Pay.Also, you can use www.eftps.gov to pay your taxes directly online.

b. Get into direct debit streamlined installment agreement over 72 months. This willbe for approximately $700 per month. No liens will be filed. Be sure you areclear on this. May be able to do streamline online once you are under $50,000.

4. How to effectuate plan:

a. Contact IRS at Telephone number on top of notice. Tell them up front that youowe $74,000, want to pay $49,000 and are willing to pay down $25,000 withinXX days. (If you tell IRS you are going to full-pay in 60 days, they normally willjust put a hold on the case.) Ask if they can handle your account and place a holdor if you need talk to another department. Bottom Line: Makes sure you are inthe right place that can help you.

b. Have form 9465 and 433-D completed and ready to fax to them.

c. After you explain your plan and they agree to it, make sure that they place theaccount on collection hold, meaning no levies, no garnishments and no filing ofliens. If they refuse, request a manager call-back.

d. With each person you call, be sure to write down their name and ID#.

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E. MARTIN DAVIDOFF


P.O. Box 835Dayton, NJ 08810-0835


November 29, 2014

VIA FIRST CLASS MAILMr. William Skowron123 Yankee Way, Unit 1BNew York, NY 10022

RE: Installment AgreementForm 1040; Year 2002 through 2004

Dear Bill::

This letter shall confirm that an Installment Agreement has been entered into on your behalf withthe Internal Revenue Service (“IRS”). Attached is the IRS letter of November 2, 2014, confirmingthe information below. Please carefully review this letter.

Payment Due Dates and Amounts

First Payment Due: December 28, 2014 Total Amount Due: $814,351.39*

Future payments due: 28th of each month * As of transcripts dated 11/2/2014. Note thatinterest & penalty shall continue to accrue.

Installment Payment Amount: $500.00

Future Compliance

One of the conditions of the installment agreement is that you are required to remain compliantwith the IRS during the term of this installment agreement. For example, this means that you mustfile your 2014 income tax return by April 15, 2015 or properly file an extension request by April 15,2015 and file your return by October 15, 2015. REMEMBER: Your 2014 tax liability must be paidin full by April 15, 2015, even if you file an extension request. You may only extend the time to fileyour return, not to pay the tax. Again, you must follow this practice consistently throughout theterm of your installment agreement.

Your failure to remain compliant during the term of the installment agreement will result in thetermination of the installment agreement and potentially aggressive actions by the IRS.

Future compliance includes paying your taxes “as you go”. This is accomplished through i)withholding on wages; ii) through the payment of estimated taxes; or iii) a combination of i) and ii).You should carefully plan your current year payments to the IRS. Please consider:

• If you pay too little, you may be subject to penalties and/or deemed non-compliant with theterms of your installment agreement.

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Mr. William SkowronNovember 29, 2014Page 2

• If you pay too much, anticipating the receipt of a refund or the application of an overpaymentto the following year, you will be disappointed. The IRS will NOT issue the refund or allow theoverpayment credit to the following year. Rather, the IRS will retain any overpayment andapply it to the balance due under this installment agreement. Such refund offsets will not beapplied to monthly payments under this agreement. Some people find this to be an advantageas it speeds up their repayment to the IRS. Others prefer to avoid significant overpayments sothey have more funds to live on month-to-month.

We suggest you have a conversation with your financial and/or tax advisors regarding thenumber of exemptions you are claiming for withholding and/or the level of your estimated incometax payments.

Electronic Payments

We recommend using the Electronic Federal Tax Payment System (“EFTPS”) to make all paymentsof the installment agreement. To ensure that your electronic payment arrives promptly, we suggestthat you submit your payment at least 2 days prior to the due date. If you have not yet registered forEFTPS, your first payment will have to be sent via mail (see below). You may register for EFTPSby going to their website (www.eftps.gov).

Non-Electronic Payments (Applicable only if you do not use the EFTPS system described above)

To ensure that your payment arrives promptly, we suggest that you mail your payment 7 to 10 daysprior to the due date. Our recommendation is to send these payments via certified mail to prove thatyour payment was mailed timely (the green card is not necessary).

All payments should contain the following information on your check:

Payable to: United States Treasury

Check Notations: On memo portion of the check include your social security number(s), and thewords "Form 1040: 2002 through 2004"

Where: Until you receive your first statement from the InternalRevenue Service, please send payments to:

Internal Revenue Service[Enter IRS address from letter]

Atlanta, GA 30301-0025

You will be receiving monthly statements or coupons from the InternalRevenue Service as a reminder of your payments. Each monthly statementwill include the address for sending in your payments.

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Mr. William SkowronNovember 29, 2014Page 3

Additional Information

Receiving monthly statements. Please do not rely upon receiving statements as a reminder as theyare not guaranteed to arrive every month. Failure to receive a monthly statement is not an acceptablereason for missing a payment. Any missed payment will result in your defaulting the InstallmentAgreement and will automatically put you back in “Collections” within the IRS, which could resultin further levies on your accounts and garnishments on your income.

Processing fee. There is a $105 processing fee which they will take out of your first $500 installment payment.

Other conditions. Please see the accompanying letter from the IRS outlining the complete terms ofyour installment agreement.

Should you have any questions, please do not hesitate to contact me.

Very truly yours,

E. Martin Davidoff

EMD/safEncl.

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E. MARTIN DAVIDOFF


P.O. Box 835Dayton, NJ 08810-0835


December 3, 2014

VIA FIRST CLASS MAILMR. William Skowron123 Yankee Way, Unit 1BNew York, NY 10022

RE: Direct Debit Installment AgreementForm 1040: Year 2002 through 2004

Dear Bill:

This letter shall confirm that a Direct Debit Installment Agreement has been entered into on yourbehalf with the Internal Revenue Service (“IRS”). Attached is the IRS letter of November 2, 2014confirming the information below. Please carefully review this letter.

Payment Due Dates and Amounts

First Payment Due: December 28, 2014 Total Amount Due: $14,351.39*

Future payments due: 28th of each month * Per transcripts dated 11/2/2014. Note thatinterest & penalty shall continue to accrue.

Installment Payment Amount: $500.00

Future Compliance

One of the conditions of the installment agreement is that you are required to remain compliantwith the IRS during the term of this installment agreement. For example, this means that you mustfile your 2014 income tax return by April 15, 2015 or properly file an extension request by April 15,2015 and file your return by October 15, 2015. REMEMBER: Your 2014 tax liability must be paidin full by April 15, 2015, even if you file an extension request. You may only extend the time to fileyour return, not to pay the tax. Again, you must follow this practice consistently throughout theterm of your installment agreement.

Your failure to remain compliant during the term of the installment agreement will result in thetermination of the installment agreement and potentially aggressive actions by the IRS.

Future compliance includes paying your taxes “as you go”. This is accomplished through i)withholding on wages; ii) through the payment of estimated taxes; or iii) a combination of i) and ii).You should carefully plan your current year payments to the IRS. Please consider:

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Mr. William SkowronDecember 3, 2014Page 2

• If you pay too little, you may be subject to penalties and/or deemed non-compliant with theterms of your installment agreement.

• If you pay too much, anticipating the receipt of a refund or the application of an overpaymentto the following year, you will be disappointed. The IRS will NOT issue the refund or allow theoverpayment credit to the following year. Rather, the IRS will retain any overpayment andapply it to the balance due under this installment agreement. Such refund offsets will not beapplied to monthly payments under this agreement. Some people find this to be an advantageas it speeds up their repayment to the IRS. Others prefer to avoid significant overpayments sothey have more funds to live on month-to-month.

We suggest you have a conversation with your financial and/or tax advisors regarding thenumber of exemptions you are claiming for withholding and/or the level of your estimated incometax payments.

Payments

Your installment agreement is under the Direct Debit program, which means that the paymentswill be automatically deducted from the bank account information you provided to us. Please beadvised you will NOT be receiving monthly statements from the Internal Revenue Service as areminder of your payments. If you do not see the first payment debited from your account on thedue date, please contact us and we will assist you in resolving the payment with the InternalRevenue Service.

Additional Information

Processing fee. There is a $52 processing fee which they will take out of your first $650 installmentpayment.

Other conditions. Please see the accompanying letter from the IRS outlining the complete terms ofyour installment agreement.

Should you have any questions, please do not hesitate to contact me.

Very truly yours,

E. Martin Davidoff

EMD/Encl.

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E. MARTIN DAVIDOFF


P.O. Box 835Dayton, NJ 08810-0835


June 19, 20�4

VIA CERTIFIED MAIL (#70050390000151304754) & PORTALMr. Yogi Berra456 Main StreetMatawan, NJ 08854

Dear Yogi:

Congratulations on the acceptance of your Offer in Compromise! We have received the AcceptanceLetter dated June 1, 20��, a copy of which is enclosed. This Offer of $18,500 will resolve alloutstanding liabilities in connection with your Form 1040 for 20��, and Civil Penalties resulting from BatBuster Company, Inc. for payroll tax liabilities for the following quarters:

6/30/0�, 9/30/0�, all quarters of 20��, 3/31/��, 6/30/��, 12/31/��, 6/30/��, 9/30/�� and 12/31/��

As a result of this acceptance, you are saving over $523,548 in taxes, interest, and penalties. (The totalamount due as of June 1, 20�� in the amount of $542,048 consisted of approximately $13,353 due onyour personal liability for 20��, and Civil Penalties resulting from Bat Buster Company, Inc. (Forms 941)of approximately $528,695).

Payment

To ensure that your payment arrives promptly, we suggest that you mail your payment at least 10 days priorto the due date. We recommend that you send the payment via certified mail, return receiptrequested, and secure a receipt from the post office evidencing the date of mailing. I cannotemphasize enough how important it is that you make this payment in a timely manner. Failure to doso may eliminate the forgiveness of unpaid taxes.

Payment Instructions:

Payable to: "United States Treasury" in the amount of $18,500

Check Notations: On the memo portion of the check include the following “Offer #1000123456; SS#:123-45-6789; Civil penalties 200�-20��; Form 1040; 20��"

Send payment to: Internal Revenue ServiceP.O. Box 24015Fresno, CA 93779

Some other things you should know:

• The IRS will keep any refunds or credits, including interest, due to you because of overpayment of anytax or other liability in connection with 20�� or earlier tax years. This includes refunds you may beentitled to receive in 20�� for any overpayments you made in 20��. Thus, you should be very carefulthat your withholding is adjusted appropriately now so that you do not overpay your taxes for 20��.

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sarah

Typewritten Text

DUE DATE: August 1, 2014

Mr. Yogi BerraJune 19, 20�4Page 2

• As a condition to retain the benefits of the Offer in Compromise, you are required to remain compliantwith all Internal Revenue Service laws for the next 5 years. For example, this means that you musteither file your 20�� tax return by April 15, 20�� or properly file an extension request by April 15,20�� and then file your tax return by the extension date. REMEMBER: Your 20�� tax liability mustbe paid in full by April 15, 20��, even if you file an extension request. You may only extend the timeto file your tax return, not to pay the tax. Again, you must follow this practice for the next five years.

These and other requirements which you must follow to maintain this forgiveness are listed on the 3rdand 4th pages of the Form 656. I urge you to read each of the items carefully and make certain that you donot violate any of the conditions of the IRS acceptance.

This might seem like a lot to remember and abide by at first ....but please remember you have now earneda fresh start and can finally proceed with a clean slate. Again, I congratulate you on this accomplishment.

Please do not hesitate to contact me if I can be of any further assistance.

Very truly yours,

E. Martin Davidoff

EMD:amEncl.

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News Essentials

What's HotNews ReleasesIRS - The BasicsIRS GuidanceMedia ContactsFacts & FiguresAround the Natione-News Subscriptions

The Newsroom Topics

Multimedia CenterNoticias en EspañolRadio PSAsTax ScamsThe Tax GapFact SheetsIRS Tax TipsArmed ForcesLatest News Home

Taxpayer Guide to Identity Theft

Español 中文 한국어 TiếngViệt Pусский

For 2016, the IRS, the states and the tax industry joined together to enact new safeguards andtake additional actions to combat tax-related identity theft. Many of these safeguards will beinvisible to you, but invaluable to our fight against these criminal syndicates. If you prepare yourown return with tax software, you will see new log-on standards. Some states also have takenadditional steps. See your state revenue agency’s web site for additional details.

We also know identity theft is a frustrating process for victims. If you become a victim, we arecommitted to resolving your case as quickly as possible.

What is tax-related identity theft?Tax-related identity theft occurs when someone uses your stolen Social Security number to file atax return claiming a fraudulent refund.

You may be unaware that this has happened until you efile your return and discover that a returnalready has been filed using your SSN. Or, the IRS may send you a letter saying we have identifieda suspicious return using your SSN.

Know the warning signsBe alert to possible tax-related identity theft if you are contacted by the IRS or your taxprofessional/provider about:

More than one tax return was filed using your SSN.You owe additional tax, refund offset or have had collection actions taken against you for a yearyou did not file a tax return.IRS records indicate you received wages or other income from an employer for whom you didnot work.

Steps to take if you become a victimIf you are a victim of identity theft, the Federal Trade Commission recommends these steps:

File a complaint with the FTC at identitytheft.gov.Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records:

Equifax, www.Equifax.com, 1-800-766-0008Experian, www.Experian.com, 1-888-397-3742TransUnion, www.TransUnion.com, 1-800-680-7289

Contact your financial institutions, and close any financial or credit accounts opened without yourpermission or tampered with by identity thieves.

If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft,the IRS recommends these additional steps:

Respond immediately to any IRS notice; call the number provided or, if instructed, go toIDVerify.irs.gov.Complete IRS Form 14039, Identity Theft Affidavit, if your efiled return rejects because of aduplicate filing under your SSN or you are instructed to do so. Use a fillable form at IRS.gov,print, then attach the form to your return and mail according to instructions.Continue to pay your taxes and file your tax return, even if you must do so by paper.

If you previously contacted the IRS and did not have a resolution, contact us for specializedassistance at 1-800-908-4490. We have teams available to assist.

About data breaches and your taxesNot all data breaches or computer hacks result in tax-related identity theft. It’s important to knowwhat type of personal information was stolen.

If you’ve been a victim of a data breach, keep in touch with the company to learn what it is doing toprotect you and follow the “Steps for victims of identity theft.” Data breach victims should submit aForm 14039, Identity Theft Affidavit, only if your Social Security number has been compromisedand your efile return was rejected as a duplicate or IRS has informed you that you may be a victimof tax-related identity theft.

How to reduce your riskJoin efforts by the IRS, states and tax industry to protect your data. Taxes. Security. Together. Weall have a role to play. Here's how you can help:

Always use security software with firewall and anti-virus protections. Use strong passwords.Learn to recognize and avoid phishing emails, threatening calls and texts from thieves posing aslegitimate organizations such as your bank, credit card companies and even the IRS.Do not click on links or download attachments from unknown or suspicious emails.Protect your personal data. Don’t routinely carry your Social Security card, and make sure your

Taxpayer Guide to Identity Theft https://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft

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tax records are secure.

See Publication 4524, Security Awareness for Taxpayers, to learn more.

The IRS does not initiate contact with taxpayers by email to request personal or financialinformation. This includes any type of electronic communication, such as text messagesand social media channels.

Report suspicious online or emailed phishing scams to:[email protected]. For phishing scams byphone, fax or mail, call 1-800-366-4484. Report IRS impersonation scams to the TreasuryInspector General for Tax Administration’s IRS Impersonation Scams Reporting.

See the main Identity Protection page for more information.

Taxpayer Guide to Identity Theft https://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft

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Report ScamsReport IRS-relatedphishing and online scamsReport IRS impersonationscams to TIGTAReport identity fraud toFederal Trade Commission

Page Last Reviewed or Updated: 26-Jan-2016

Identity Protection: Prevention, Detection andVictim Assistance


Identity theft places a burden on its victims and presents a challenge to businesses, organizationsand government agencies, including the IRS. Tax-related identity theft occurs when someone usesyour stolen Social Security number to file a tax return claiming a fraudulent refund.

The IRS combats tax-related identity theft with an aggressive strategy of prevention, detection andvictim assistance. We’re making progress against this crime, but it remains one of our highestpriorities. If you become a victim, we’re committed to helping you resolve your case as quickly aspossible.

As part of the Security Summit Initiative, the IRS, the states and the private-sector tax industryworked together to identify new safeguards that will better protect taxpayers and fight identitytheft. But we need your help. Learn what you can do to help make your personal, financial and taxdata safer at: Taxes. Security. Together.

Are you a victim of tax-related identity theft?

Taxpayer Guide to Identity TheftPublication 5027, Identity Theft Information for Taxpayers (PDF)Data Breach: Tax-Related InformationRequesting Copy of Fraudulent ReturnPublication 4524, Security Awareness For Taxpayers (PDF)Identity Theft Victim Assistance: How It Works

Identity theft information for tax preparers and businesses

Identity Theft Information for Tax PreparersPublication 5199, Tax Preparer Guide to Identity Theft (PDF)Information for businesses about data breaches and identity theftTax Practitioner Guide to Business Identity Theft

What the IRS is doing to combat identity theft

What we're doing to combat identity theftHow new security changes may affect you for 2016Special identity theft enforcement effortsLaw Enforcement Assistance Program

Additional Identity Theft Resources

News and Outreach: Security Summit Initiative and Identity TheftFederal Trade CommissionSocial Security Administration

Remember:The IRS doesn't initiate contact with taxpayers by email to request personal or financial information.This includes any type of electronic communication, such as text messages and social mediachannels. The IRS does not call taxpayers with threats of lawsuits or arrests.

Protect Yourself FromIdentity Theft

See YouTube for more ID theftvideos.

Identity Protection: Prevention, Detection and Victim Assistance https://www.irs.gov/Individuals/Identity-Protection

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Identity Theft - Including Updates (in bold and underlined)

1. Example scenarios:a. Refund-related crime: Identity thief uses stolen SSN to file forged tax return and

obtain refund early in the filing season.b. Employment-related crime: Identity thief uses a stolen SSN to obtain employment

2. Refer to Publication 4535. This was recently updated.

3. Form 14039 to report a problem Send in this form with an original return. **Important**With the new form, you may now specify a representative to complete and representyou on this matter if you wish.

4. Identity Protection Specialized Unit (IPSU) is central point of contact:

1-800-908-4490

After the Form 14039 has been received by the IRS, you will receive a notice confirmingthe receipt and listing the next step. It is also possible that you will receive a Letter 31Cfrom the IRS stating that two tax returns were filed for the same period of time andrequesting information from you. Note: the processing time start to finish will likely takeat least 12-16 weeks and it is important to keep following up with them and keep notes.

5. The IRS will place an Identity Theft Indicator” on your account for 3 years for anyreturns or W-2s filed with your name and social security number.

6. File a police report.

7. Contact the Federal Trade Commission (FTC) at 877-438-4338; www.ftc.gov) and givethem the police report number. The FTC will place a fraud alert for the next 90 daysunder the name and social security number.

8. The IRS also encourages you to report the identity theft to the Internet CrimeComplaint Center: http://www.ic3.gov/complaint/default.aspx

9. Contact Social Security Administration (800-772-1213; www.ssa.gov).

10. Contact 1 of 3 major credit bureaus (Equifax for example is 800-525-6285;www.equifax.com) and request a free credit report.

11. You may need to step in and ask the Taxpayer Advocate (1-877-777-4778) to becomeinvolved. The TA will only get involved, however, if the taxpayer is experiencing ahardship (i.e., eviction notice, disconnect notice, repossession of car, lack of refundimpacting finances during divorce with single income, etc.)

12. New IRS techniques; the IRS WILL issue you a new IP-Pin.

Use of new IP-Pin 6 digit number assigned to taxpayers who- were identified as ID theft victims- submitted required documentation- had their account issues resolved

This is a NEW pin in addition to any others including the electronic signature ‘self-select’PIN, which allows a legitimate return to bypass the ID theft filters in IRS, preventsprocessing fraudulent returns and avoids delays. This IP PIN is reissued each year to thoseassigned for additional security. There is a box on the signature line of the tax returnwhere the PIN must be put in. Also, if you are filing from Florida, Georgia or theDistrict of Columbia, an IRS limited pilot program will let you proactively request anIP-Pin even without prior issues.

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IRS Identity Theft Victim Assistance: How ItWorks


We know identity theft can be frustrating and confusing for victims. When it comes to tax-relatedidentity theft, the Internal Revenue Service wants to resolve your case as quickly as possible. TheIRS has worked hard to help victims of identity theft by making improvements and shortening thetime it takes to resolve these complex situations.

Each taxpayer’s experience will vary, depending on whether you tell us you may be a tax-relatedidentity theft victim or we tell you we have a suspicious tax return with your name on it. (Pleasenote: We also may not realize you are an identity theft victim until we begin processing the taxreturn or initiate an audit.)

Here is a general outline of what you can expect.

You tell us you may be a tax-related identity theft victim

Here’s what happens if you learn you are a victim of tax-related identity theft. For example, youre-filed return rejects because of a duplicate tax filing with your Social Security number, and youreport the incident to us:

You should file by paper if you are unable to e-fileYou should complete and file Form 14039, Identity Theft Affidavit, with your paper tax returnYour tax return and Form 14039 are received for processing by the IRS.Your case goes to our Identity Theft Victim Assistance (IDTVA) organization where it will behandled by employees with specialized trainingYou will receive an acknowledgment letterThe Identity Theft Victim Assistance organization will work your case by:

Assessing the scope of the issues, trying to determine if your case affects one or more taxyears.Addressing all the issues related to the fraudulent return. This includes determining if thereare additional victims, who may be unknown to you, listed on the fraudulent return.Researching the case to double check all the names, addresses and SSNs are accurate orfraudulent.Conducting a case analysis to determine if all outstanding issues were addressedEnsuring your tax return is properly processed and if you are due a refund, releasing yourrefund.Removing the fraudulent return from your tax records.Marking your tax account with an identity theft indicator, which completes our work on yourcase and helps protect you in the future.

You will receive notification that your case has been resolved. This is generally within 120 daysbut complex cases may take 180 days or longerPrior to the start of the next filing season, you will receive a letter (CP01A) with an IdentityProtection Personal Identification Number (IP PIN) to help protect your tax return going forward.

We tell you we have a suspicious return with your name on it

Often, the IRS Taxpayer Protection Program identifies a suspicious tax return bearing your nameand SSN and will send you a notice or letter. There are many reasons why a return may appear tosuspicious to us, and we take this precautionary step to help protect you. Here’s what happens inthis situation:

You may receive a letter from the IRS asking you to verify your identity within 30 days.You follow the letter’s instructions to verify your identity at IDVerify.irs.gov:

If you are unable to verify using the website, you should call the Taxpayer ProtectionProgram toll-free number provided by the letter.If you are unable to verify your identity with the customer service representative, you may beasked to visit an IRS Taxpayer Assistance Center in person. You should plan on providingpicture identification plus the letter and a copy of the tax return if you did file it.If you are unsure about the letter’s authenticity and whether it came from the IRS, go toIDVerify.IRS.gov and follow the prompts to verify your identity.If you receive this or similar notices about suspicious returns, you do not need to completethe Form 14039 unless instructed to do so.

Once you verify your identity with us, you can tell us if you did or did not file the return.If you did not file the return, it will be removed from your IRS records. You may be told you willneed to file a paper return for the current filing season.If you did file the return, it will be released for processing and, barring other issues, your refundwill be sent.

How quickly we can work identity theft cases depends upon the volume of work and the complexityof the cases. Once we completely resolve your tax account issues, we will mark your account withan identity theft indicator to help protect you in the future.

IRS Identity Theft Victim Assistance: How It Works https://www.irs.gov/Individuals/How-IRS-ID-Theft-Victim-Assistance-works

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Certain tax-related identity theft victims will be placed into the Identity Protection PIN program andannually receive a new, six-digit IP PIN that must be entered on the tax return. The IP PIN adds anextra layer of identity protection. Some taxpayers will be given the option of getting an IP PIN,using the IRS.gov/getanippin tool.

Are there other steps I should take as a tax-related IDT victim?

You should also follow the recommendations from the Federal Trade Commission, such ascontacting one of the three credit bureaus to place a free “fraud alert” on your credit records. SeeTaxpayer Guide to Identity Theft and FTC’s site, www.identitytheft.gov, for details.

You should also check with your state tax agency to see if there are additional steps to take at thestate level.

Other resources:

Identity Protection: Prevention, Detection and Victim Assistance

IRS, State and Tax Industry Security Summit

Federation of Tax Administrators (State Tax Agencies)

Social Security Administration

IRS Identity Theft Victim Assistance: How It Works https://www.irs.gov/Individuals/How-IRS-ID-Theft-Victim-Assistance-works

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www.irs.gov Form 14039 (Rev. 4-2016)

Form 14039(April 2016)


Identity Theft AffidavitOMB Number

1545-2139

Complete this form if you need the IRS to mark an account to identify questionable activity.

Section A - Check the following boxes in this section that apply to the specific situation you are reporting (Required for all filers)

1. I am submitting this Form 14039 for myself

2. I am submitting this Form 14039 in response to a mailed ‘Notice’ or ‘Letter’ received from the IRS. If person in Section C receivedIRS ‘Notice CP 2000’, or other IRS Notice questioning income, follow the instructions on that IRS ‘Notice’ or ‘Letter’.

• Please provide ‘Notice’ or ‘Letter’ number(s) on the line to the right

3. I am submitting this Form 14039 on behalf of my dependent.Please complete Section F on reverse side of this form.

Caution: If you are filing this on behalf of a Minor or Dependent, filing this form will protect his or her tax account but it will notprevent the dependent in Section C below from being claimed as a dependent by another person.

4. I am submitting this Form 14039 on behalf of another person (other than my dependent).• Please complete Section F on reverse side of this form.

Section B – Reason For Filing This Form (Required)

Check only ONE of the following boxes that apply to the person listed in Section C below.

1. Federal tax records affected and I am a victim of identity theft

2. Federal tax records not affected and I am a victim of identity theft, or an event has affected/compromised my personalinformation placing me at-risk to be a future victim of identity theft.

Please provide an explanation of the identity theft issue, how you became aware of it and provide relevant dates.

Section C – Name and Contact Information of Identity Theft Victim or Potential Victim (Required)

Taxpayer's last name First name Middle initial Taxpayer Identification Number(Please provide your 9-digit SSN or ITIN)

Current mailing address (apartment or suite number and street, or P.O. Box) If deceased, please provide last known address.

City State ZIP code

Tax Year(s) in which you experienced identity theft (If not known, enter ‘Unknown’ in one of the boxes below) Last tax year a return was filed

Address used on last filed tax return (If different than ‘Current’)

City (on last tax return filed) State ZIP code

Names used on last filed tax return (If different than ‘Current’)

Telephone number with area code (Optional) If deceased, please indicate ‘Deceased’

Home telephone number Cell phone number

Best time(s) to call

Language in which you would like to be contacted English Spanish

Section D – State or Federal Issued Identification (Required)

Submit this completed form and a clear and legible photocopy of at least one of the following documents to verify the identity of the person listed in Section C above. If necessary, enlarge photocopies so all information is clearly visible.

Check the box next to the document(s) you are submitting:

PassportDriver's license Social Security Card Valid U.S. Federal or State government issued identification**

** Federal employees should not copy his or her employee identification cards as 18 U.S.C. prohibits doing so.

Section E – Penalty of Perjury Statement and Signature (Required)

Under penalty of perjury, I declare that, to the best of my knowledge and belief, the information entered on this Form 14039 is true, correct, complete, and made in good faith.

Signature of taxpayer, or representative, conservator, parent or guardian Date signed

ISA

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www.irs.gov Form 14039 (Rev. 4-2016)

Section F – Representative, conservator, parent or guardian information (Required if completing Form 14039 on someone else’s behalf)

Check only ONE of the following five boxes next to the reason you are submitting this form

1. The taxpayer is deceased and I am the surviving spouse. (No attachments are required, including death certificate)

2. The taxpayer is deceased and I am the court-appointed or certified personal representative.Attach a copy of the court certificate showing your appointment.

3. The taxpayer is deceased and a court-appointed or certified personal representative has not been appointed.

o Attach copy of death certificate or formal notification from a government office informing next of kin of the decedent’s death. o Indicate your relationship to decedent: Spouse Child Parent/Legal Guardian Other

4. The taxpayer is unable to complete this form and I am the appointed conservator or have Power of Attorney/Declaration of Representative authorization per IRS Form 2848.o Attach a copy of documentation showing your appointment as conservator or POA authorization.o If you have an IRS issued Centralized Authorization File (CAF) number, enter the nine-digit number:

5. The victim or potential victim is a ‘minor’. ‘Minor’ as defined per the state in which ‘minor’ resides. By checking this box and signing below you are indicating that you are an authorized representative, as parent, guardian or legal guardian, to file a legal document on the child’s behalf. o Indicate your relationship to minor: Parent/Legal Guardian Fiduciary Relationship per IRS Form 56

Power of Attorney Other

Representative's name

Last name First name Middle initial

Last four digits of Representative’s Taxpayer ID number Representative’s telephone number (include area code)

Representative’s current mailing address (apt., suite no. and street, or P.O. Box)

City State ZIP code

Instructions for Submitting this Form

Submit this to the IRS via Mail or FAX to specialized IRS processing areas dedicated to assist you. In Section C of this form, be sure to include your Social Security Number or Individual Taxpayer Identification Number in the ‘Taxpayer Identification Number’ field. Help us avoid delays: Choose one method of submitting this form either by Mail or by FAX, not both. Please provide clear and readable photocopies. Note that ‘tax returns’ may not be submitted to either the mailing address or FAX number provided below.

Submitting by Mail Submitting by FAX

• If you checked Box 1 in Section B of Form 14039, are unable to file your tax return electronically because the primary and/or secondary SSN was misused, attach Form 14039 and documentation to your paper tax return and submit to the IRS location where you normally file your tax return. If you have already filed your paper return, submit this Form 14039 and documentation to the IRS location where you normally file. Refer to the ‘Where Do You File’ section of your return instructions or visit IRS.gov and input the search term ‘Where to File’.

• If you checked Box 1 in Section B and are submitting this Form 14039 in response to a notice or letter received from the IRS, return this form and documentation with a copy of the notice or letter to the address contained in the notice or letter.

• If you checked Box 2 in Section B of Form 14039 (no current tax-related issue), mail this form and documentation to:

Internal Revenue Service Fresno, CA 93888-0025

• If you checked Box 1 in Section B of Form 14039 and are submitting this form in response to a notice or letter received from the IRS that shows a reply FAX number, FAX completed Form 14039 and documentation with a copy of the notice or letter to that number.

• Include a cover sheet marked ‘Confidential’. If no FAX number is shown on the notice or letter, follow the mailing instructions on the notice or letter.

• If you checked Box 2 in Section B of Form 14039 (no current tax-related issue), FAX this form and documentation toll-free to:

855-807-5720

Privacy Act and Paperwork Reduction Notice

Our legal authority to request the information is 26 U.S.C. 6001. The primary purpose of the form is to provide a method of reporting identity theft issues to the IRS so that the IRS may document situations where individuals are or may be victims of identity theft. Additional purposes include the use in the determination of proper tax liability and to relieve taxpayer burden. The information may be disclosed only as provided by 26 U.S.C. 6103. Providing the information on this form is voluntary. However, if you do not provide the information it may be more difficult to assist you in resolving your identity theft issue. If you are a potential victim of identity theft and do not provide the required substantiation information, we may not be able to place a marker on your account to assist with future protection. If you are a victim of identity theft and do not provide the required information, it may be difficult for IRS to determine your correct tax liability. If you intentionally provide false information, you may be subject to criminal penalties. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. Public reporting burden for this collection of information is estimated to average 15 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can write to the Internal Revenue Service, Tax Products Coordinating Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send this form to this address. Instead, see the form for filing instructions. Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act, unless that collection of information displays a currently valid OMB Control Number.

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T “Our goals are to fully understand the client’s

problems, engage the client, and set up a Plan of Action.”

IRS Representation AdvisorE. Martin Davidoff, CPA, Esq.

Representing Clients Before the IRS Part 1: Getting Started

This is the first of a series of articles on Representing Clients Before the IRS. In this segment, Mr. Davidoff covers the first three steps of a tax controversy engagement. Future segments will cover the remaining steps and talk about the tools avail-able to practitioners, along with some practical rules of engage-ment.

Representing clients before the IRS is a learned art. At the start, practitioners must understand that they are subject to the highest ethical standards. Accordingly, representatives will often find themselves turning away potential clients in order to preserve those standards. Representatives must be committed to adhering to those high standards, even though it may appear that their adversary, the IRS, is not playing fair. And, even when it plays by the rules, the “rules” grant the IRS awesome powers in its ability to place liens on taxpayers, levy wages and seize property, all of which places us at a distinct disadvantage as practitioners. To win, we must enhance our skills in commu-nications with clients, foster relationships with IRS personnel and understand the tools available to combat an often unrea-sonable, unsympathetic behemoth we refer to as the IRS.

The Frantic Call & the Office EnvironmentFor those who specialize in representation, most tax controversies are not with your own 1040 or business clients. Rather, the issues involve those who have gotten into trouble on their own or in spite of the assistance they received from their CPA. Accordingly, how your firm handles the initial call from this person will often dictate whether you get the opportunity to represent the client.

One of the best-selling tools available is a person, not an answering machine. Having a live person answering the tele-phone dramatically increases your odds of getting the client. Clients like to know that they can get in touch with their representative, or at least a live person at his/her office. In my firm, if I am not available to speak to a prospective client, our office policy is to forward the call to a paraprofessional who knows the process and can “sell” the firm to the potential cli-ent by noting our expertise. In most cases, I return all calls the same day or the next day; if I can’t return the call promptly, we will set up a specific date and time for a conference call or meeting.

Whenever a prospective client calls, the notes are alphabeti-cally placed in a folder set up for the year. I often have prospects calling me a year or two later who are amazed that I have all of my notes from our previous conversation. As my office becomes paperless (a couple of years away for me), I envision my access to

this information will only become that much faster when that “folder” for the year will be at my fingertips.

You can dramatically expand the number of cases handled through the use of paraprofessionals. In my office, these are for-mer executive or legal secretaries who have honed their project management skills and understanding of IRS operations, but they also are individuals with great people skills. Such skills are often the difference between getting the deal you want!. In most cases, my paraprofessionals put in more than 75 percent of the chargeable hours, enabling me to focus on the more dif-ficult questions and issues of each case, thus minimizing the overall charges to our clients.

Initial Client MeetingThe initial client meeting sets the tone for the entire relationship. In some cases it is the only in-person meeting that I have with the client. Our goals at this meeting are to fully understand the client’s problems, engage the client (financially), and set up a “Plan of Action.”

I have the paraprofessional who will be working the case join the meeting – at no charge to the client. Typically, I charge $50 for the first half hour and then my normal hourly rate. If the client was referred to me by an existing client or a regular refer-ral source, I do not charge for the first half hour and emphasize that I am doing this as a courtesy to the referral source. The referral source appreciates this and the potential client feels good that the person who referred him or her is held in such high esteem.

Throughout our discussions we are realistic. We promise only what we know we can accomplish because we want to establish trust with our clients and referral sources, and establish reason-able expectations in the minds of our clients. Because much of

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BY HAND IN OUR OFFICEMr. and Mrs. John J. Doe 123 Main StreetAnywhere, New Jersey 08666

Dear John and Jane:

I am writing this letter to confirm and specify the financial arrangements regarding the services, which I will be providing to XYZ Corporation and you.

I will be representing XYZ Corporation in connection with the assessment and collection of Payroll taxes for the years 2001 through 2003. I will be representing you, personally, before the Internal Revenue Service in connection with the assessment and collection of income taxes for the years 2002 through 2004, for trust fund recovery penalties proposed by the IRS, and for other years and matters in the event that the Internal Revenue Service expands the scope of its investigation. I may also provide other services, which you request. Please note that it is hereby acknowledged that you have given us permission to discuss your case and provide copies of documents to Tony Kubek, CPA.

My fees are based upon the amount of time required to review and analyze information provided to me, perform necessary research, carry out additional services in representing you, and complete additional services which you request. My current hourly rate is $330. The hourly rates for my staff range from $75 to $225. In addition, you will be charged for out-of-pocket expenses (photocopying, federal express, postage, etc). All rates will increase from time to time consistent with the rates charged generally to the firm’s clients.

I will require an initial retainer of $3,500 prior to commencing work. The $3,500 will be held in my business account and will be applied towards the final bill. During the course of our engagement, you will receive invoices periodically. My invoices are due and payable immediately upon receipt. There will be a late charge equal to 1.5 percent per month on any unpaid balances. Please note that, at our option, the work on your account will cease 20 days following our issuance of an invoice if full payment of such invoice is not received, unless other mutually satisfactory arrangements have been made in writing. We have also agreed to provide you with additional flexibility with respect to the payment of fees due to this firm. So long as you make monthly pay-ments of $350 on the first of each month, commencing with October 1, 2006, we will continue to work on your account and we will waive any late charges through October 1, 2009. Any balance due and payable as of October 1, 2009 shall become due and payable immediately.

Although you may find it convenient and appropriate that I invoice XYZ Corporation for some or all of my services, each of you will be personally responsible for the payment of any of my invoices issued to the corporation and/or you.

In the unlikely event that it becomes necessary for me to seek legal recourse to receive payment of my fees through litigation or arbitration, you hereby agree to reimburse me for all out-of-pocket expenses, as well as any of the time expended by my staff and/or me at the hourly rates then in effect, to secure such payment. For purposes of our agreement, the term “out-of-pocket expenses” also includes any legal fees and all other expenses in connection with any attempt (including litigation) to collect my fees. By signing below, you hereby consent that I may use any information which you provide me to collect any fees due to this firm. Such information includes income tax returns which we prepare for you or which you provide us.

If the terms outlined in this letter are in agreement with your understanding of our engagement, each of you should sign the enclosed copy of this letter and return it to me as soon as possible with the $3,500 retainer. By signing below you are each also agreeing to be jointly and individually responsible for the entire amount of my fees. Should you have any questions concerning this letter or the fees to be charged, please do not hesitate to contact me.

To facilitate our representation, please find enclosed, in triplicate, Forms 2848, Power of Attorney, which will enable us to represent you before the Internal Revenue Service. Also enclosed is Form 8821, Tax Information Authorization, which will enable other members of my staff to discuss your case with the Internal Revenue Service. Please sign two copies of each form and return them to us. You may retain the third copy for your files.

Very truly yours, E. Martin Davidoff

EMD:acencls.

Agreed to by: John J. Joe, Individually and as President of XYZ Corporation Date

Jane J. Joe Date

E. MARTIN DAVIDOFF 353 Georges Road - Suite K P.O. Box 835 Dayton, NJ 08810-0835 [email protected] TEL: 732-274-1600 FAX: 732-274-1666

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our success depends upon our advocacy skills in working with individual decision-makers at the IRS, we are often able to deliver more than our clients anticipate.

I usually leave my schedule fairly flexible so that I can spend two to three hours with the client, if necessary. During this time, multiple tasks may be taking place at one time. I may have one staff member copying documents, while another pre-pares an engagement letter and a third prepares powers of attor-ney forms. While they are doing this, I am putting together a list of additional documents or information required of the client, doing a budget with the client and/or putting together the Plan of Action.

The Engagement LetterThis is the contract between your client and you. After the initial consultation, I perform no work until the client executes the engagement letter and provides the agreed-to retainer. As you develop your standard engagement letter, keep the following points in mind:

•I will state, usually in general terms, that I will be represent-ing the taxpayer before the tax agency for certain years with respect to particular taxes. If I anticipate submitting an offer in compromise to resolve a collection matter, I will include that information. (It should be noted that most of my collection engagements do not result in submissions of offers in compro-mise.) I also add the following wording: “I may also provide other services which you request.” This ensures I am covered if the scope of the engagement expands.

•If the Taxpayer is married, I insist that the spouse sign the engagement letter and be fully responsible for my fees.

•I ask for a retainer in advance. The client will receive interim billings. The funds held as a retainer are applied to the last invoice.

•Since my rates increase annually, I include the following

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Form 5304-SIMPLE is used if the employee chooses the financial institution and Form 5305-SIMPLE if the employer chooses. Either of these forms establishes the SIMPLE, and is not filed with the IRS.

SummaryThe chief concerns that stop a small business client from establishing a retirement plan are being required to contribute annually and the administrative burdens. SEP and SIMPLE plans can overcome these concerns. These plans do away with the complex fiduciary and reporting requirements associated with managing a standard deferred compensation plan; top-heavy rules and eligibility criteria are built into the structure of the plans. These plans offer flexibility as to how much an employer must contribute in the year. They can be presented to clients with the assurance that they will adequately address their employee’s retirement concerns.

Rosann Torres, J.D., is a Federal Tax analyst with LexisNexis. Formerly with PricewaterhouseCoopers, contact her at [email protected]. Brian J. McBreen, J.D., LL.M., LexisNexis Federal Tax analyst, is the co-author. Contact him at [email protected].

Torres, continued from page 14

language: “All rates will increase from time to time consistent with rates charged generally to the firm’s clients.”

•I provide that work will cease, at my option, if invoices are not paid within a set timeframe, usually 20 days. In addition, I will often issue stop-work letters if the deadline is not met. This is a tremendous tool in getting clients to pay. It really works!

•If I am providing services for a corporation, my letter includes provisions that will make the owner individually liable for any invoices issued to the corporation or the individual.

•The engagement letter provides that the costs of collecting my fees from the taxpayer are his or her responsibility, includ-ing my time. While I have not usually collected this, it does bring us to more satisfying resolution on the few times I have had a financial dispute with a client.

•We occasionally include a provision that clients may pay me on a monthly basis, ranging from $300 to $750 per month. By doing so, a portion of the payment will often be included by the IRS in determining the client’s necessary expenditures. However, it is important to provide an end date to such an arrangement. I use three years, at which point any remaining balance becomes due.

In spite of all the provisions that our firm includes, our engagement letters for tax representation work are never longer than two pages. When presenting the engagement letter to the client, I take time to clearly explain its provisions. I pay par-ticular attention to the retainer, which many clients think will be applied to the initial invoice, not the last.

With an office staff attuned to landing the prospect and serv-ing the client, you can develop a profitable tax representation practice, providing cost-effective services to those in need.

E. Martin Davidoff, CPA, Esq. is a sole proprietor with more than 25 years experience practicing as a CPA and tax attorney in Dayton, N.J. Davidoff is founder and current chairman of the IRS Tax Liaison Committee of the American Association of Attorney-CPAs and currently serves as its vice president. A frequent instructor having most recently appeared at the IRS Nationwide Tax Forums. Davidoff ’s upcoming speaking engagements can be found by emailing [email protected].

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T “Since current and future compliance are in nearly all collection matters, I always

include the current and follow-ing year on Form 2848; you may include up to three years

beyond the current year.”IRS Representation AdvisorE. Martin Davidoff, CPA, Esq.

Representing Clients Before the IRS Part 2: Being Authorized

to Represent Your Client

This is the second of a series of articles on Representing Clients Before the IRS in which the fourth step of a tax controversy engagement is covered. Part 1 dealt with Getting Started, covering the frantic call, initial meeting and engagement letter. Future segments will cover the remaining steps and talk about the tools available to practitioners, along with some practical rules of engagement.

Tax practitioners use Forms 2848 and 8821 to represent their clients before the IRS. Most states, if not all, require their own forms. At the inception of the engagement, these forms should be signed by the taxpayer(s) providing immediate authoriza-tion with respect to all matters and periods of representation and potential representation. If you have not recently read the instructions to these forms, you should; they provide helpful guidance for special situations, such as how to present civil penalties and where each form should be filed. My practice is to prepare the forms in triplicate. I have the client sign two copies and provide the third copy to the client for his or her records.

Tips on Completing Form 2848The completion of the form is basic. Be sure to use the current version of the form, currently the March 2004 revision. Here are nine tips to keep in mind:

1. Include all years with which you may require access. Sincecurrent and future compliance are items for discussion innearly all collection matters, I always include the currentand following year on Form 2848, and the instructions makeit clear that you may include up to three years beyond thecurrent year. I also include years as far back as I can imagineneeding, even though they may not be directly relevant tothe matter at hand.

2. In the column “Year(s) or Period(s),” there often is notenough room to easily fit multiple years. It is simpler to showa range of years. We use the wording “2002 through 2007”and “ALL YEARS INCLUDED.”

3. The Internal Revenue Manual (IRM) makes it clear that theuse of the phrases “Current Year” or “All Years” is unaccept-able. Instead, the manual suggests using “through” or “thru”or a hyphen (“ - “) to show a range of years.

4. Line 5 of Form 2848 – “Acts authorized” – allows the tax-payer to expand or reduce the effect of the power of attorney.At one point, our office used to add the power to delegate.However, as a result of E-Services, we no longer do so.Why?

One of the services available under E-Services is to download

IRS records on your taxpayer, such as transcripts and matching information. However, any entry on line 5 will disable your access to E-Services for the client because an entry on line 5 may limit your powers. As a result, since the IRS has not yet programmed its computers appropriately to determine how line 5 entries impact the authorization to represent clients, it limits access to online E-Services if there is any entry on line 5. 5. Always include a PIN number on page 2 to enable input of

the power on E-Services. Your firm should come up with astandard method for determining PIN numbers.

6. In my experience, there has always been some question onwhen signatures should be dated. If the client’s signature isbefore or after the CPA’s, is that a problem? To avoid anyproblems with respect to signature dating, we try to have thesignatures dated on the same day. Where that is not possible,we always have the client sign first, hence the client date willbe earlier. The IRM, at 21.3.7.7.1 (10-01-2005) at paragraph2 states that signatures for domestic taxpayers should bewithin 45 days of each other with a 60-day standard fortaxpayers residing abroad. The IRM states: “The sequenc-ing of dated signatures is not critical although the taxpayergenerally signs first ....”

7. Determine whether you need to retain any existing power ofattorney authorizations. If so, you need to check the box online 8 on page two of Form 2848 and attach a copy of Form2848 for the power being retained. If the box is not checked,all prior Power of Attorney authorizations are consideredrevoked with respect to that taxpayer for the matters andyears covered. I have seen the failure to address this provi-sion cause practitioners to inadvertently revoke powers ofattorney by other members of their own firm!

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provided on Line 6 of Form 2848. Frankly, I think it is a significant conflict of interest. If you have a situation where this is important to your representation, tread carefully.

9. To prepare forms expeditiously, we use a simple tax forms service. In our case, we use the CFS Fill-N-Print product (www.taxtools.com) for federal and state power of attorney/authorization forms. We set up a template so that the names of the representatives, Central Authorization File (CAF) numbers, telephone numbers and address of our firm do not have to be re-entered with each new client. The software also enables you to prepare other forms commonly used in rep-resentation, including Forms 433A (Collection Information Statement for Individuals), 433B (Collection Information Statement for Businesses), 656 (Offer in Compromise), 9423 (Collection Appeal Request, 12153 (Request for a Collection Due Process Hearing), and 911 (Application for Taxpayer Assistance Order). The forms service is designed to allow you to input the client’s information once and use it on multiple forms.

Form 8821, Tax Information AuthorizationForm 8821 is not normally used by practitioners and others authorized to practice before the IRS. However, it is a critical tool because it enables our non-CPA staff, such as paraprofessionals, secretaries and non-certified staff accountants to take a greater role in the firm’s representation of clients. As a result, we are in a position to handle more cases overall and focus on the more difficult aspects of such representation.

In our office, we use the Form 8821 to enable paralegals to secure IRS records. The paralegals become, essentially, project managers for their cases, making sure that I meet all deadlines

and commitments to the IRS and my clients. They have valu-able experience, and their relationships with IRS employees help us facilitate cases to achieve more successful results overall.

With changing personnel, the key is to take advantage of an IRS rule that enables any employee to have the access offered by Form 8821. We have a separate CAF number for “The Firm of E. Martin Davidoff, Attorney-at-law” in addition to a CAF number for me, personally. The key wording is “The Firm of,” which conveys to the IRS that it is not an authorization to me alone. Those magic words extend the authorization to any employee of the firm.

The Central Authorization FileThe IRS maintains a CAF for all Forms 8821 and 2848. Form 2848 may be entered through E-Services or by sending it to one of the three locations listed in the form’s instructions. In most cases, we find it more effective to simply fax the forms to the appropriate CAF unit (Ogden, Utah; Memphis, Tenn.; or Philadelphia, Pa.). In some cases, the CAF unit inputs these items within 48 hours! We file authorizations with E-Services or the appropriate CAF unit promptly upon being engaged by the client, even if IRS contact is not imminent.

Once your authorizations (whether Form 2848 or 8821) are in the CAF, there should be no need to ever give an IRS repre-sentative a copy of the authorizations. However, most revenue officers, revenue agents and appeals officers will want a copy in their files. Normally, such employees will then send a copy to the CAF unit for processing. If we have already sent the autho-rizations in, as a courtesy, we advise the employees that we have already done so.

E. Martin Davidoff, CPA, Esq. is a sole proprietor with more than 25 years experience practicing as a CPA and tax attorney in Dayton, N.J. Davidoff is founder and current chairman of the IRS Tax Liaison Committee of the American Association of Attorney-CPAs and currently serves as its vice president. A frequent instructor having most recently appeared at the IRS Nationwide Tax Forums. Davidoff ’s upcoming speaking engagements can be found by emailing [email protected].

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designed to help firms grow their business: talent, training, technology and teamwork.

“Staff want to work for the best and the brightest organiza-tions, be challenged and increase their sense of accomplish-ment,” Sabbatis told attendees.“ Look at how technology can help fill gaps in your workflow, look for tools that are flexible and portable, and that can be integrated around everyday appli-cations and platforms,” advised Sabbatis.

Thomson Tax and AccountingAt the Thomson Tax and Accounting (TTA) annual user conference Jon Baron, CEO, delivered the keynote and spoke about changing from a task orientation to a workflow orientation. “Technology can be fun,” he said. He described what he called, “the most significant Microsoft changes in history. Vista may cause hardware changes and is farther along than Office 2007. Also, Internet Explorer 7.0 will be arriving for a more robust internet access experience.

The Most Productive Tax Tip of AllFrom all the visits, the most productive tax tip of all from any conference or software company is the increased staff productivity of having dual monitors on all tax preparer’s desks, especially with document imaging.

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IIn practicing before the IRS regarding collection matters, penalty abatements and examinations, I have found certain "rules of engage-ment" helpful.

1. Nevervolunteerinformation,unlessitispartofastrategy.The IRS often asks us a lot of questions. To appear cooperative and move the case along, it is in our best interest to answer all questions directly, succinctly and narrowly. Answer the question and offer nothing more. On occasion, you may wish to strategically provide additional information to the auditor. For instance, sometimes vol-unteering information in one area may move the IRS away from ask-ing questions in other, more difficult, areas. In other situations you are trying to provide the IRS employee a human perspective on the client (i.e. Taxpayer's mom died last December after fighting lung cancer for five years. Taxpayer would visit her every day!).

2. Neverprovidematerials/documentstotheIRSthatyouhavenotre-viewedcarefully—bankstatements,paycheckstubs,creditcardstate-ments,etc.The documents may contain information that is not helpful to your client. For example, in the context of determining the amount of an installment agreement, the IRS requests three months of recent bank statements to support your disclosures in form 433. In such cases, I will secure six months of recent bank statements from my client and I will choose which three months of statements to provide the IRS. In doing so, I will total up the deposits and make sure they are con-sistent with my client's representations of income. In following this process, you should investigate all significant discrepancies. Familiar-ize yourself as to whom the checks have been written to, for what purposes, and in what amounts. In choosing which three months of statements you are providing the IRS, you are still meeting their re-quirements, but you are doing so on your terms and in good defense of your client.

3. Assertyourselfasappropriate.One way of doing so is to learn how to say phrases such as:

n "Please give me your manager's name and phone number."n "What is your authority for that position?"n "Who is your territory manager?"n "Are you refusing to provide that information to me?"From first line staffers at the IRS 800 numbers all the way up

to Appeal Officers, I have found that these phrases enable me to secure a clear chain of command and a true understanding of the positions the IRS is taking. On several occasions, the IRS has cited authority — a case or IRM section — for their position that actually supported my contention. In such situations the IRS representative had not carefully read the authority or was simply bluffing, figuring that I would not take the time to read the cited authority. In one

Appeal involving tens of thousands of dollars, the Appeals Officer told me that there was a case on point supporting the IRS position. I presumed he was correct and politely asked him to send me the case before issuing his report. I followed up after the conference with sev-eral phone calls and faxes. After about a month, the Appeals Officer simply told me he was finding in my favor, never providing the case on point nor admitting that there was no such case supporting his position to begin with!

In the rare case that a Revenue Officer refuses to provide me the name and telephone number of his/her manager, I will say "Let me make this very clear. I have asked for the name and phone number of your manager and you are refusing to provide that information to me. Do I have that right?" Four out of five times such an asser-tive technique when making reasonable requests will secure the in-formation you are seeking. (Those who work on the "800" numbers are not allowed to provide their managers phone numbers, but still should provide the name of their manager when asked. They should offer to provide a manager callback within 48 hours.)

4. AlwaysaskforthefullnameandemployeeIDnumber.When calling the IRS be sure to get the ID number of each and every IRS employee you speak with, as well as the correct spellings of their names. This should be done at the beginning of each conversation, before the possibility of the call becoming contentious. By doing so, you will able to backtrack to that individual if you find that behav-ior inappropriate or exemplary. Reporting both kinds of behavior to IRS management will likely make your feedback more effective and provide you with a reputation as a practitioner who is both fair and tenacious in representing your clients.

E. Martin Davidoff, CPA, Esq., is a practicing CPA and tax attorney in Dayton, NJ. He founded the IRS Tax Liaison Committee of the American Association of Attorney-CPAs and is the immediate past president of the AAA-CPA. Contact him at [email protected].


"When calling the IRS be sure to get the ID number of each and every IRS employee you

speak with ... at the beginning of each conversation."

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IIn practicing before the IRS regarding collection matters, penalty abatements, and examinations, I have found certain rules of engage-ment helpful. For the first four rules of engagement, see the June/July edition of this magazine.

Assert yourself as appropriate — postscriptAlthough this was discussed last month, I had an excellent example today of how important it is to assert yourself on behalf of your cli-ents. Several weeks ago, the CFO of a company contacted me. His company owed more than $200,000 in payroll taxes. This is a com-pany that has $6 million in annual sales and is likely to be paying the payroll taxes in full. The IRS revenue officer, Ms. Thomson, had been eager to interview the company's president, Mr. Mays, regard-ing the possible assessment of the trust fund recovery penalty (IRC §6672). During the preliminary call with the CFO, it was agreed that I would represent Mr. Mays.

Ms. Thomson had set a deadline of May 24 to have this in-terview, and Mr. Mays called me on May 21 to engage me. At this point, Ms. Thomson knew that Mr. Mays was in the process of se-curing representation but insisted that the appointment be kept. It took until May 25 for me to receive the engagement letter, including a guarantor signature, the retainer and powers of attorney. The CFO called Ms. Thomson to tell her that the attorney would be engaged on May 25. She said that the interview must take place between 9 a.m. and 1 p.m. on May 25, and this would be the taxpayer's final chance. The implication was clear that she would be taking some sort of enforcement action, but against whom? The company was mak-ing regular payments, and Mr. Mays had not yet been assessed. This was nothing but a scare tactic, a threat.

On the morning of May 25, we faxed our power of attorney to Ms. Thomson and left a message on her office phone. It wasn't until the afternoon that we learned we were supposed to call her cell phone. By close of business on May 25, we had not heard from her.

What now? (Even if we had reached her, we were merely going to request more time.) As of close of business, we had not received a return call. In my mind, Ms. Thomson was a possible loose cannon, one who did not take seriously one's right to representation.

So, on May 26, my paralegal, Sarah, called the area director to get the name of Ms. Thomson's manager. She explained the circum-stances and secured the name of the manager. She then left a message with the manager stating that a threat had been made and that we could not contact the revenue officer. By the end of the day, we had heard back from the area director's staff, the territory manager and Ms. Thomson. The managers who called us were sympathetic and made it clear that we did the right thing. I believe that we will get the additional time we require to determine what questions Ms. Thom-son will be posing to my client (probably those on form 4180) and what my client's answers to those questions will be.

The next day, Ms. Thomson insisted on assessing the Trust Fund Recovery Penalty without an interview. I spoke with the ter-ritory manager, who agreed that the interview will be conducted on or before June 18. In the meantime, no assessment would be made against Mr. Mays. I attribute the reasonable extension of time to my office's proactive approach in contacting the higher-ups at the IRS.

5. Never lie. Period.This seems simple. You should never make representations to the IRS that are misleading or untrue. Better to refuse to answer a ques-tion than to lie. In the long run, the IRS learns which practitioners are reliable and which are not. Once you fall in the latter category, your cases will become uphill battles.

At the beginning of most tax examinations, the auditor will ask if there is any income that was not reported on the tax return. If the answer is yes, I have limited choices. I can provide the information or I can say, "that is for you to determine"— thus evading the answer but making no misrepresentation.

6. Do not accept unreasonable timelines.If the IRS asks for a form 433-A in 14 days, do not agree to do so if you know you need 30 days. If the IRS asks your client to pay $1,500 by next Friday, do not agree to do so if you believe the client is un-able to do so. Explain to the IRS your justification for the extension of time or change of payment amount and that you are interested in working together to find a successful resolution for all. You have options in nearly all circumstances. You can speak to a manager or bring the case to Appeals.

More rules of engagement to come next issue.


"Explain to the IRS your justification for the extension of time or change of payment

amount and that you are interested in working together to find a successful resolution ... "

Rules of Engagement in Dealing With the IRS Part II

E. Martin Davidoff, CPA, Esq., is a practicing CPA and tax attorney in Dayton, NJ. He founded the IRS Tax Liaison Committee of the American Association of Attorney-CPAs and is a recent past president of the AAA-CPA. Contact him at [email protected].

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6 I O C T O B E R 2 0 1 0 www.cpamagazine.com

In practicing before the IRS concerning collection matters, penalty abatements and examinations, I have found certain rules of engage-ment helpful. For previous rules of engagement, see the August/Sep-tember edition of this magazine.

7. Donotagreetotermsyourclientcannotmeet.If you believe your client only can pay $500 per month, and the IRS insists that your client pay $1,000 per month, you should not agree to the higher amount. By doing so, you are setting up your client for failure. Rather, you should appeal the decision to a manager or other administrative level within the IRS.

Usually, the unpalatable terms of an installment agreement deal with the amount of monthly payments, but occasionally they might deal with the timing of payments. For example, I have had clients who have owed substantial amounts to the IRS who received bo-nuses at the end of each year. In one case, an attorney could repay the IRS $60,000 per year. But, a $5,000 per month payment plan would not work because the attorney received much of her income in December, January and February of each year through bonuses.

Thus, we negotiated with the IRS to have the payments due for each December, January and February at a rate of $20,000. Al-though the IRS had to manually monitor this particular installment agreement, they agreed to do so because they understood the logic of structuring the payments in this manner. Usually, you will not get a first-level employee to depart from the prescribed monthly install-ment formula that is normally used by the IRS. Higher-ups, how-ever, often will exercise their judgment to bring about a resolution.

8. Currenttaxesgetpaidfirst.While meeting with clients about IRS collection matters, they are likely to tell you their tales of woe about how they got into these predicaments. Hopefully, you will give them excellent advice on how to resolve their past issues. Maybe the issues can be resolved with installment agreements or offers in compromise. Perhaps, the clients will take out equity loans on their homes to pay off the IRS. Regard-less of the resolution, they will not be successful in resolving their IRS disputes if they are not meeting their current tax obligations.

Quickly, the conversation needs to move to the current tax year because no long-term resolution will be possible if the client is not current. Is the client paying his or her personal estimated taxes? Is the withholding level correct? It is important that you as the advi-sor know where the taxpayer stands on the current year. Your goal is to pay in nearly all of the tax by year-end and no more. Why no more? Typically, the IRS will seize the excess and apply it “in the best interests of the government,” which is usually not in your client’s best interests.

If you are dealing with a client who is also an employer, make sure that all payroll tax filings have been completed and that the pay-roll taxes are being paid timely. I usually will have the client sign up with a major payroll tax service and opt into their tax-pay service. Such a service takes out the proper withholding tax with each pay-roll. I educate the client that the net payroll should not be paid unless you have the funds to be sure to pay-in the related payroll taxes.

Many IRS employees understand that current taxes should be the first concern. Yet, some IRS employees will pressure clients to pay delinquent taxes first because those are the cases on the IRS em-ployees’ desks. It often takes an aggressive representative to keep the proper focus.

Often, clients just refuse to stay current on their taxes, claiming they are unable to do so. They explain that they cannot afford to pay the mortgage, the auto payments, college, etc., and pay their taxes. In many instances, these are self-employed individuals. Your approach with such individuals has to be clear and firm. People often have to realize that they must change their lifestyles to live within their current budgets and that current taxes are non-discretionary parts of those budgets. So, if a client comes in today, I realize he or she might not be able to pay even the first half of the current year’s taxes. But, from this day forward, the client must keep current. I encour-age high-income individuals to pay their estimated taxes monthly or weekly through www.eftps.gov to avoid facing those huge quarterly estimated tax payments.


E. Martin Davidoff, CPA, Esq., is a sole proprietor in Dayton, N.J., with more than 30 years experience practicing as a CPA and tax attorney. He founded the IRS Tax Liaison Committee of the American Association of Attorney-CPAs and is a past president of the AAA-CPA. Contact him at [email protected].

Rules of Engagement: Dealing With IRS Installment Plans

IRSRepresentation AdvisorE. Martin Davidoff, CPA, Esq.

"Your goal is to pay in nearly all of the tax by year-end

and no more."I

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Reprinted with Permission from CPA Magazine Oct 2010

6 I N O V E M B E R 2 0 1 0 www.cpamagazine.com

In practicing before the IRS regarding collection matters, penalty abatements, and examinations, I have found certain rules of engage-ment helpful. For previous rules of engagement, see the June/July, August/September and October editions of this magazine.

9. Meet all commitments made to the IRS … or at least call.A corollary to the rule of not accepting unreasonable time lines from the IRS is for the CPA to meet all commitments made to the IRS. If you insist on reasonable time lines, you should be able to meet such time lines. In the rare instances that you are unable to meet such time lines, you must be sure to communicate with the IRS before the commitment date passes.

Most revenue officers (RO) and agents will work with you as long as you communicate and make a significant effort to move the case forward. You may need to speak to a manager before securing a reasonable time frame, as the IRS appears to provide little discretion to its front-line telephone collection employees.

In setting time lines or requesting additional time there are tech-niques you can use along with your own personal style. Let’s say you have a client who owes $75,000 and should be able to full-pay the ac-count in due course. The negotiation with the IRS ultimately comes to whether the client can liquidate assets through sale or loans and/or the amount of monthly installment payments.

One of the first requirements of the IRS is to secure financial information about the taxpayer. For me, the most difficult aspect for most high-income taxpayers is determining and presenting their budget to the IRS. Thus, one of the compromises I will make with a RO will be to provide form 433-A, presenting all but the budget. This is helpful to the RO because it provides a road map to assets and employment. In exchange, I will get the time needed to put together the client’s budget. (See a detailed budget in the April/May 2009 edition.)

How do I convince the IRS to provide more time? Often, I bring it to a personal level. I recognize that we both are professionals and need to be reasonable about the demands we place upon our-selves. To eliminate resistance, I may communicate with the IRS representative along the following lines:

“As one who has been in practice for many years, I am in the business of avoiding stress for my clients and myself. When left to our own resources, we will make your job easier and provide you with a quality, comprehensive package. I know the demands on my time and my client’s time and am in the best position to set my own schedule. I cannot meet the deadline you are asking of me while exercising my due diligence. I am sure if I provide you the requested materials in the time line I have laid out, you are not going to be run-ning out of work. Accordingly, I would appreciate you treating me

professionally as you would like to be treated.” In the most absurd cases, I have had the IRS require eight to ten

years of tax returns to be filed in 30 days. The IRS has been waiting for these returns for eight to ten years, and now it is suddenly urgent that they get them in 30 days? I will negotiate a schedule to provide the returns over a period of time that is reasonable for the complex-ity, or lack thereof, of the client’s tax returns. My rule of thumb has been to provide the first two years’ returns within 45 days and then two more years every 30 days.

10. Do not let appeals deadlines pass without considering action.Most commitments with the IRS are artificial deadlines set by the IRS (and, hopefully, the practitioner) to keep the case moving along. However, some deadlines are critical. You should never just let those deadlines pass. Examples of such deadlines are the 30-day deadline to appeal a Revenue Agent Report in an examination context, the 90-day deadline to file a Tax Court Petition, the 30-day deadline to request a Collection Due Process hearing or the one-year deadline to request a Collection Due Process Equivalency hearing. Each of these deadlines requires a written response.

There are also deadlines to appeal the imposition of a penalty or the denial of a request for abatement. Never allow a deadline to go by as a result of your indecision or inability to act. Each deadline requires careful consideration and documentation of the actions you decide to take or not take.



IRS Rules of Engagement No. 10: Never Let Deadlines Pass

IIRSRepresentation AdvisorE. Martin Davidoff, CPA, Esq.

“Most revenue officers (RO) and agents will work with you as long as you communicate and make a significant effort to move the case

forward.”

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6 I TA X S E A S O N 2 0 11 www.cpamagazine.com

In practicing before the IRS regarding collection matters, penalty abatements and examinations, I have found certain rules of engage-ment helpful. This is the fifth in the series on such rules of engage-ment, with the previous four editions appearing in this magazine.

11. Carefully read and fully understand all IRS communications.The title of this “rule” seems to say it all. However, I am astounded by the number of taxpayers and practitioners who misread IRS com-munications. The first thing to look for in any IRS communications is whether there is a deadline to take action (i.e. appeal the denial of a request for penalty abatement). Even if I do not have time to care-fully read the entire communication at first, I quickly peruse it to be certain that no deadlines will be missed. From time-to-time, the IRS will request documentation within a short period of time and failure to do so will create havoc for the client. For example, offer in com-promise specialists will often request additional information within 10 to 14 days. If you don’t provide the requested information by the due date, the IRS will return the case to you without a decision. This is worse than a rejection in some respects, because you cannot appeal the decision to return the case. If you realize at the outset that there is a short time line, you can then take action to meet the deadline or speak to someone, including a manager, to request additional time to gather the information.

It is also key to know how to respond. For example, if the prop-er response is an appeal, to what address do I send the appeal? Most of the time, the communication will provide that information. If it does not, you should call the telephone number on the notice (or the practitioner hot line, 866-860-4259) to determine the proper address (usually, the inside address within the communication). We will often fax our appeal as well as mail it via Certified Mail, to ensure timely receipt.

Many IRS letters can be confusing. For example, some letters state that the IRS has made a decision, but if you provide additional information within 30 days, they will reconsider. Yet, I have often seen that same letter include language advising the taxpayer that he/she had 30 days to appeal the decision (most often in offers in com-promise). A taxpayer may send in the additional information, but not ask for an appeal. Thus, if the information does not change the mind of the IRS, the taxpayer has lost the right to go to Appeals!

Many of you are familiar with IRS letter 1058, wherein the IRS advises the taxpayer of a potential levy and his/her right to a Collec-tion Due Process Hearing. After a case has remained dormant for awhile, the IRS may file what is often referred to as a “refresher let-ter,” letter 3174. Essentially, this again advises the client of the poten-tial for levies as well as other enforcement action if full payment is not timely made. However, there is no formal Appeals mechanism. In my opinion, a response is necessary to ensure that levy or lien action is not imminent. The appropriate response is to follow the process which would lead to a CAP Appeal (form 9423), the first step of which is to communicate with the source who sent the letter 3174.

IRS communications often provide explanations on changes in tax, interest and/or penalties. Yet, such communications are often not complete. So, in order for you to “fully understand” a com-munication, you may need to use a variety of tools to request such documentation to enable you to fully understand the notice. Such tools are E-Services or the Practitioner Hot Line to secure account transcripts or Freedom of Information requests to secure other docu-ments (i.e. SFR, AUR or examination assessments).

The bottom line is to read the IRS communication from cover to cover, making sure that you fully understand how the document impacts the taxpayer and, if you disagree with that impact, how and when to reply to the communication.

12. Know your case’s status! Set ticklers and follow-up.When dealing with IRS controversy matters, you, the practitioner, should take control and fully understand the procedural context of the case. Is the case in Appeals? Has the tax been assessed? Can an in-nocent spouse claim be timely filed? Can the taxpayer take advantage of a Collection Due Process Hearing or the equivalency hearing? Is your case nearing the expiration of the Statute of Limitations on IRS collections? Once you understand the procedural context, then set forth a plan of action and execute that plan.

Never just wait for the IRS to contact you. You should set tick-lers and time lines for anticipated contacts. Depending upon your situation and your strategy, you may wish to push the case to a con-clusion aggressively. If your hope is that the IRS will be quiet and go away, that should be a strategic decision, not as a result of indecision. At our office, after we have made contact with the IRS, we “tickler” a follow-up to check the status of the case. When the “tickler” pops up, we then decide whether contact with the IRS is appropriate and, if so, we decide upon the best manner of contacting the IRS.

For example, at the time we submit an offer in compromise package on behalf of a client to the IRS, we also set a tickler of 30 days to make certain that the case has been received and assigned. If we have heard nothing in that time frame, we call the OIC unit to

IRS Rules of Engagement: Under Promise and Over Perform

IIRSRepresentation AdvisorE. Martin Davidoff, CPA, Esq.

“Such tools are E-Services or the Practitioner Hot Line to secure account transcripts or Freedom

of Information requests to secure other documents (i.e. SFR, AUR or examination assessments).”

Continued on page 13

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By Practicing CPAs ... For Practicing CPAs TA X S E A S O N 2 0 11 I 13

which the case was sent (usually Holtsville, NY for us). After the call, we evaluate the discussion and set a new tickler.

Another example, would be securing an installment agreement. We monitor the case to ensure that the IRS is not placing levies or liens on the case while the request for an installment agreement is pending. Also, many clients wish to have some finality to their situa-tion as quickly as possible. So, we will set ticklers and make contacts to keep the case moving along. After each conversation with the IRS we inquire on the best time to make contact again and use that infor-mation as one point of reference in setting the next tickler.

13. Confirm all examination computations through tax software.In the past year, I have saved two clients thousands of dollars by merely running the tax examination results through our tax software. I had a ‘hunch’ on each matter that there were some errors in the ini-tial return preparation or in the computations by the IRS. So, I ran the original return and the adjustments (as a 1040-X) through my tax software. I found that there were computational errors as a result of passive loss computations, the AMT, depreciation and net operat-ing loss carryovers. (It should be noted that the original returns were not prepared by our firm.) The results were so significant that I have made it a rule to check the computations on all examinations. We

also check the more complicated interest and penalty computations using a program by TValue entitled TaxInterest.

The first step is to make certain that we ensure that there were no errors in the original return. Through that process, you can dis-cover and evaluate errors in the return, the correction of which will benefit your client. The complexity of the passive loss rules, the AMT and the combination of the two provide a significant opportunity for tax savings. Then we add the agreed-to changes in income to arrive at a revised tax liability.

The IRS will usually not have a problem correcting errors such as those described above. The settlements we reach with them are usually related to under-reported income or disallowed deductions. The ultimate tax is merely a computation. The IRS software for ex-aminations does not have the sophistication of the IRS tax processing computers or our software. Accordingly, it is not unusual for the IRS to fail to pick-up a passive loss carryover, for example, which gets freed up with the disallowance of current year deductions on rental real estate.


E. Martin Davidoff, CPA, Esq., is a sole proprietor in Dayton, N.J., with more than 30 years experience practicing as a CPA and tax attorney. He is a past president of the AAA-CPA. Contact him at [email protected].

Save Thousands of Dollars By Running Examination Results Through Tax SoftwareContinued from page 6

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Reprinted w/Permission from CPA Magazine Tax Season 2011

In practicing before the IRS regarding collection matters, penalty abatements and examinations, I have found certain rules of engagement helpful. This is the sixth and final in the series of articles in this magazine on such rules of engagement.

14. Be Realistic With Your Client.Promise only what you know you can deliver, which will frequently result in your delivering more than anticipated.

Throughout our communications with our client, we promise only what we know we can accomplish. Our goal is to establish trust with our clients and referral sources, while establishing reasonable expectations in the minds of our clients. Since much of our success depends upon our advocacy skills in working with a variety of individual decision-makers at the IRS, we are often able to deliver more than our clients anticipate.

15. Confirm all Oral Agreements with the IRS field employees in writing and request that they sign off.In collection matters, the IRS often wants information more quickly than you can provide it with reasonable accuracy. Accordingly, you often enter into a negotiation with the Revenue Officer (RO) and establish mutually-agreeable deadlines. For example, when will back tax returns be filed? When will the form 433-A be completed? How will interim payments, estimated taxes, and payroll tax deposits be handled? ROs are instructed to secure form 433-A information (client financial information) immediately. The assets/liabilities sections of the form 433-A are often straight-forward and can be completed in a relatively short timeframe. However, the budget section may take more time and finesse to present a complete and accurate picture of the taxpayer’s finances and monthly budget. Accordingly, you may agree on varying timelines for portions of the form 433-A in order to satisfy the RO’s need for securing at least some information quickly. In exchange for meeting the agreed-to timelines, you should negotiate with the RO to hold off in taking any collection actions and/or issuing notices that will accelerate the collection process.

To avoid any possible misunderstandings, you should set forth the understandings with the RO in writing. You could do a memorandum to your client’s file. However, if you are dealing with a RO in the field, why not turn that memorandum into a letter and ask the RO to sign off on its contents? The worst that could happen is that the RO will not sign the letter. If the RO receives the letter and fails to object to its contents, I believe that such inaction would be considered a tacit agreement to the letter’s terms. If I am dealing with a RO whom I trust, I often

send the confirming letter and ask the RO to call me if any of the contents are inaccurate. If I do not trust the RO or have no long-term relationship with the RO, I will often insist that the RO sign off on the letter or issue their own letter of confirmation back to me. On occasion, I will go to the manager to secure a written confirmation from the RO.

In drafting the letter, I take great care to write the agreement precisely as discussed. I would not want to be accused of attempting to renegotiate the agreement by using wording more favorable to my client than our discussion had provided. Sometimes, in drafting the letter, I will think of something that had not been discussed that should be included in our agreement. In such circumstances, I make it very clear that we had not discussed that aspect and invite the RO to call me if he/she does not agree with my proposed resolution of the issue.

When dealing with IRS collections through the centralized telephone sites, securing written confirmation of oral agreements is nearly impossible. In such cases, I write detailed internal memoranda. If nothing else, each memorandum should clearly communicate to your client what has transpired. In lieu of a memorandum, I will often send a letter to my client summarizing the case’s status. Both the memorandum and the client letter serve the purpose of documenting what has transpired and communicating the status of the matter to your client.

16. When you win, say “thank you” and “good-bye.” ■ The Appeals Officer agrees to waive your client’s penalty; ■ The Criminal Investigation Division decides not to

prosecute your client; ■ The IRS telephone assister agrees to accept a favorable

installment agreement; or ■ The IRS finally agrees to that Offer in Compromise.

Dealing with the IRS RegardingCollections, Penalty Abatements and Examinations

IRSRE. Martin Davidoff, CPA, Esq.

"In exchange for meeting the agreed-to timelines, you

should negotiate with the RO to hold off in taking any

collection actions."IIn practicing before the IRS regarding collection matters, IIn practicing before the IRS regarding collection matters, penalty abatements and examinations, I have found certain rules Ipenalty abatements and examinations, I have found certain rules of engagement helpful. This is the sixth and final in the series of Iof engagement helpful. This is the sixth and final in the series of Iarticles in this magazine on such rules of engagement.Iarticles in this magazine on such rules of engagement.

6 I A U G U S T/ S E P T E M B E R 2 0 11 www.cpamagazine.com

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All of the above are favorable outcomes for your client. Some practitioners might ask “what swayed you to see it our way?” or “how did you come up with that number?” When the IRS says “you win,” you should simply say “thank you” and “good-bye.” (Then, of course, do the memorandum to your file.) For example, I recently received a verbal approval of a highly favorable installment agreement. I then gave the IRS manager in this case, the only information he needed, “I would like the payments to come due on the 28th of each month, starting next month.” That is all he needed to input the installment agreement and, at that point, I quickly ended the call.

17. Pull transcripts and summarize them.To fully understand a client’s options, it is helpful to prepare a federal tax summary. A sample of such a summary can be found below. To prepare such a summary, you must secure Account Transcripts from the IRS. For practitioners, this can be done through E-Services or by calling the tax practitioner hotline (1-866-860-4259). Preparing a federal tax summary using a spreadsheet program allows you to summarize dozens of pages from IRS Account Transcripts on one page so you can readily see the amounts of tax, interest, late filing penalties, late payment penalties, estimated tax penalties and offsetting payments and credits for multiple years.

18. Be fully prepared for all meetings…anticipate the unexpected.I recently represented a client at a tax examination. In preparing for my meeting with the auditor, I came in prepared with multiple sets of files. We carefully segregated the information so that we could answer anticipated questions narrowly to prevent raising additional issues inadvertently. The bottom line is that we anticipated virtually all of the auditor’s potential questions. Our thorough preparation

enabled us to achieve a more favorable and faster result for our client and minimize her stress. Such preparation is helpful in the collection area too. Comprehensive form 433 packages enable us to secure better results. Anticipating weaknesses in our client’s arguments for penalty abatement hearings enables us to more effectively address those weaknesses with the Appeals Officer.

19. Know the tools available to you and your clients’ rights.Some examples include:

■ Your client has a right to appeal the rejection of his/her request for an installment agreement;

■ You have the right to discuss your case with a manager, territory manager, or anyone else up the chain of command;

■ You have the right to go to the Office of Appeals for Collection Due Process hearings, CAP Appeals, penalty abatement appeals, and to appeal examination findings;

■ To assist you, you have programs available such as the Office of Taxpayer Advocate and Fast Track Mediation;

■ You may designate payments as Trust Funds or Deposits in the Nature of a Cash Bond;

■ You have the right to see, generally, what is in IRS files through the Freedom of Information Act. You also may see IRS records of third-party contacts.

Learn all you can about your clients’ rights and what tools are available within the IRS so you can utilize them most effectively to benefit your clients.


L\EMD\DOELiab.123 11/12/2004

JOHN DOEYEARLY SUMMARY OF FORM 1040 TAX LIABILITY

PENALTIES OVERPYMTFEES & LATE LATE ESTIMATED TOTAL PAYMENTS & CREDIT BALANCE DATE OF

YEAR TAX INTEREST COLLECTION FILING PAYMENT TAX ASSESSMENTS CREDITS TRANS OUT DUE "1040" TRANSCRIPT

1991 54,056.00 102,817.39 13,514.00 13,514.00 183,901.39 183,901.39 07/23/20041992 105,339.00 176,033.26 26,335.00 26,334.75 334,042.01 334,042.01 07/23/20041993 57,286.00 68,332.01 52.00 14,321.50 14,315.49 2,400.25 156,707.25 (61,284.75) 95,422.50 09/13/20041994 126,939.00 130,383.40 70.00 31,734.75 31,734.75 320,861.90 320,861.90 09/13/20041995 131,126.00 111,359.90 32,781.50 32,781.50 308,048.90 308,048.90 09/13/20041996 198,387.00 137,665.23 49,596.75 49,596.75 435,245.73 435,245.73 09/13/20041997 71,195.00 39,070.53 17,798.75 17,798.75 145,863.03 145,863.03 09/13/20041998 94,743.00 41,047.19 23,685.75 23,685.75 183,161.69 183,161.69 09/13/20041999 107,016.00 34,493.18 26,754.00 26,754.00 195,017.18 195,017.18 09/13/20042000 141,777.00 29,659.32 35,444.25 31,186.10 238,066.67 (22.00) 238,044.67 09/13/20042001 86,825.00 13,372.66 20.00 21,706.25 13,023.75 134,947.66 134,947.66 07/23/20042002 93,454.00 7,108.98 23,363.50 8,410.86 132,337.34 132,337.34 07/23/20042003 63,276.00 0.54 0.00 0.00 1,444.16 64,720.70 (64,728.00) 7.30 0.00 07/23/2004

TOTALS $1,331,419.00 $891,343.59 $142.00 $317,036.00 $289,136.45 $3,844.41 $2,832,921.45 ($126,034.75) $7.30 $2,706,894.00

(IRS Representation Federal Tax Summary)

By Tax Practitioners ... For Tax Practitioners A U G U S T/ S E P T E M B E R 2 0 11 I 7

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Reprinted with Permission CPA Magazine Aug/Sept 2011

JOURNAL OF TAX PRACTICE & PROCEDURE 69

August–September 2013

©2013 E.M. Davidoff

E. Martin Davidoff, CPA, Esq., is the founder of the Dayton, New Jersey fi rm of E. Martin Davidoff & Associates, CPAs and has more than 30 years of experience practicing as a CPA and

tax attorney. Davidoff is the founder of the IRS Tax Liaison Committee of the American Association of Attorney-CPAs and currently serves on the Executive Committee of the AAA-CPA.

Mr. Davidoff may be reached at [email protected].

IRS Representation Advisor—Steps to Effective IRS Audit Resolution*

By E. Martin Davidoff

E. Martin Davidoff outlines steps for effective IRS audit resolution.

When taxpayers receive the dreaded notice that their business is going to be examined by the IRS, the fi rst thing they do is seek

your advice. If you prepared the return, you already know there is nothing to worry about because the tax return is perfect in every way! So, of course, for the purposes of this article, we are talking about the new client who walks in with the tax return prepared by that “other CPA”—not you!

1. Carefully Read the CommunicationCarefully determine the type of examination tak-ing place and what, precisely, is being examined. The IRS notice may pertain to a field examination, an office audit or a correspondence examination. In addition to these three primary types of exami-nation methods which have the potential to adjust taxpayers’ liabilities, there are under-reporter no-tices (CP-2000), specialized audits of tax credits (i.e., earned income credit) and substitute for re-turn (SFR) procedures. This article addresses only field and office examinations. Field examinations are conducted by Revenue Agents, while office audits are conducted by Tax Compliance Officers.

2. Speak Directly with the Revenue Agent/Tax Compliance Offi cer

Call and introduce yourself to the Revenue Agent (RA) or Tax Compliance Offi cer (TCO) conducting the ex-amination (the “Auditor”). IRS employees are people too. This should be a cooperative and friendly dis-cussion. How you approach and deal with them will impact the success or failure of your representation.

Be sure to call before the response date on the examination notice. If the notice provides a date for a meeting, be sure to call well in advance of that meeting as it is likely (and permissible) that you will need to reschedule. As you negotiate a date and time convenient for you, allow suffi cient time to conduct a thorough pre-audit.

Try to narrow the issues. For example, work with the Auditor to choose the expense categories to audit from the larger amounts on the tax return. Often, a relatively small number of categories will represent 70 to 85 percent of the total expenses of a business. I prepare a spreadsheet for my own use to determine that I am hitting this target range. To get the auditor’s “buy-in,” I usually make it clear during the conversa-tion that I understand that if we cannot substantially document the selected categories, that the Auditor may expand the scope of the examination. Generally, if I can show that there is a competent set of books and records, and can fully document the larger ex-pense categories, there will be no need to look at the smaller categories. In some cases, I take the approach of having the Auditor choose the expense categories,

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recognizing that they are in control of the examina-tion. Recognize that it is in both the taxpayer’s and the IRS’s interests to have an effi cient examination.

Generally, you will encounter more productive discussions with RAs than TCOs. RAs are higher on the IRS pay and talent scales, more highly trained and have more fl exibility in their workload allocation. TCOs are given a greater workload and are conduct-ing the examinations in their offi ces, usually at their desks. Often, I have found TCOs to be autocratic and infl exible. In such cases, learn how to say: “Please give me the name and telephone number of your manager,” and “Who is the Territory manager?” Then be prepared to make the appropriate calls. Such calls work, even if the IRS employee states “my manager will tell you the same as I did” as they often do.

Recently, the IRS has been requesting electronic records of taxpayers. The submission of such records could be damaging to our clients. The withholding of such records has not yet been tested in court. Up through the writing of this article, I have not turned over such records, with the following rationales:

The records contain confi dential information (i.e., doctor patients, attorney clients).The accounting fi le (often QuickBooks for small businesses) is not a true set of books and records and could be misleading.We can document expenditures adequately through print-outs of selected reports.

But, before long, the IRS may insist on such records and test their power to do so through the courts. In the meantime, I recommend against turning over taxpayer electronic records unless and until the IRS issues a subpoena to do so.

3. Do a Thorough Pre-AuditPrior to the IRS conducting the examination, I perform a pre-audit that is more thorough than the actual examination. I scrutinize every check, receipt, and all of the books and records, trying to learn where all the “bodies” lie, and to understand the client’s books, records, and business inside out. Knowing the weaknesses of the case allows me to prepare more effectively for the examina-tion and, in some cases, I decide to offer up those weaknesses to the auditor up front as a gesture of good faith.

It is important, especially with corporations, to understand all balance sheet accounts. For example, the impact of tax basis on S corporations may pro-

vide adjustments for the examiner. How many of us have observed the dreaded “loan to shareholders” account on the asset side of the balance sheet? Ask questions of your client and his bookkeeper to ensure you have a comprehensive understanding of your client’s fi nancial history.

With nearly all closely held businesses, the IRS will be looking at deposits into bank accounts and rec-onciling such deposits to reported gross income. Be sure you do a thorough analysis of bank and broker-age account deposits. Also, the IRS may look into the personal living expenses of the owners of the business to determine whether their lifestyle is consistent with the income being reported from the business. If not, what is the source of funding the shortfall? In many instances that the shortfall is unreported income!

To support deductions, you will need proof of payment and receipts refl ecting the purpose of the expenditures. For certain expenditures, such as meals and entertainment, travel and local transportation, a diary may be critical.

Recognize when you are in over your head. Some cases require an attorney-client privilege. As soon as you recognize that, refer your client to counsel and stop asking questions of the client. Remember, CPAs and enrolled agents do not have privilege in representing clients before the IRS with respect to criminal matters.1

4. The Client Should Be a No-ShowHave a frank conversation with your client regarding why he/she should be a “no-show” at the examina-tion. Clients will often talk too much and inadvertently provide more information than necessary. They are often angry about their situation (of being audited) and show that anger during the examination. And, by poorly choosing their words or becoming defensive, they may lead the auditor into believing that something is improper, even if that is not the case. Most clients will be relieved that their presence is not required.

Your role will be to act as a buffer between the auditor and the client, enabling the client to give thorough, well-considered answers to all questions. Also, if the questions become too invasive, you can always state that you are not authorized to answer the question presented and consider responding after you seek further guidance and/or clarifi cation from your client. Keep in mind that the IRS does not have the right to interview your client directly. You

Steps to Effective IRS Audit Resolution

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JOURNAL OF TAX PRACTICE & PROCEDURE 71

August–September 2013

are his representative.2

5. Rules for Conducting the Examination

Prior to the examination, fi nd out all you can about the auditor. Inquire of your colleagues and check out social media sites. Have the examination in your offi ce, not the cli-ent’s. This enables you to more carefully control the fl ow of the examination. Avoid letting the auditor sit alone all day looking over the records on his or her own. It is important that your staff and you spend time with the auditor, getting to know him or her and knowing what he/she is doing. Develop a rapport with the auditor. Completely review and understand all documents provided to the auditor.Never lie or make a misstatement to the auditor.Never volunteer information, unless it is part of a strategy to do so.Do not accept unreasonable timelines to get information back to the auditor.Meet all commitments made to the auditor, or at least call in advance if you cannot do so.

6. Negotiate a ResolutionAttempt to arrive at a negotiated resolution of the ex-amination with the auditor. By doing so, you save your client the cost of an appeal or, possibly, the expansion of the examination to additional multiple years. Weak issues can often be negotiated more easily if you are able to establish mutual trust and respect with the auditor. Fully document your strong areas and cover them early in the examination process. Thus, as you get to other areas, you may be able to reach a reso-lution more easily. Keep in mind that the auditor is doing his/her job and usually has not prejudged your client. The auditor is getting all their information on the examination from you, both in terms of the facts and your approach in communicating with the audi-

tor. Treat them as the professionals that they are and they will likely treat you the same in return.

7. Appeal RightsYour client has both formal and informal appeal rights. The informal rights are to speak to the audi-tor’s manager or the Territory Manager (who is the manager’s manager). Often, diffi culties in reaching a resolution can be resolved through such conversa-tions. The auditor may lack the experience and/or the power to resolve the case on his/her own.

In the event you do not reach a resolution, you may fi le a formal appeal upon the receipt of the auditor’s report (often referred to as the “30-Day Letter” as it provides you 30 days to fi le the formal appeal). Such appeals are heard by the IRS Offi ce of Appeals, the mission of which is to “resolve tax controversies, without litigation, on a basis which is fair and im-partial to both the Government and the taxpayer in a manner that will enhance voluntary compliance and public confi dence in the integrity and effi ciency of the Service.”

You should discuss with your client the costs and benefi ts of pursuing an appeal. If you have little or no experience going to the Offi ce of Appeals, you may wish to offer to represent your client in the appeals process at a nominal charge to gain experience.

Often, when faced with the 30-Day Letter, prac-titioners are so focused on providing additional information to the auditor in order to achieve a more favorable result that they allow Appeal deadlines to pass. Be sure not to do so. You can request, in ad-vance, additional time to make your appeal. If you do not secure the additional time in writing, you need to fi le the appeal if you wish to protect your client’s right to be heard by the IRS Offi ce of Appeals.

ENDNOTES

* This article was previously published by CPA MAGAZINE in two parts, in May and June 2013.

1 See Code Sec. 7525.2 See Code Sec. 7521(c) and I.R.M. §4.10.3.2.1.

This article is reprinted with the publisher’s permission from the JOURNAL OF TAX PRACTICE & PROCEDURE, a bi-monthly journal published by CCH, a part of Wolters Kluwer. Copying or distribution without the publisher’s permission is prohibited. To subscribe to the JOURNAL OF TAX PRACTICE & PROCEDURE or other CCH, a part of Wolters

Kluwer Journals please call 800-449-8114 or visit CCHGroup.com. All views expressed in the articles and columns are those of the author and not necessarily those of CCH, a part of Wolters Kluwer or any other person.

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