Agency Matters

Make sure to renew your PIN. Not doing this wil cause you to lose time resolving your clients notices.

WASHINGTON — The Internal Revenue Service today reminded tax return preparers to renew their Preparer Tax Identification Numbers (PTINs) before year’s end. All 2011 PTINs will expire on Dec. 31 and must be renewed annually.

The IRS urged preparers to start their renewal process now to avoid missing the deadline.
To renew, go to www.irs.gov/ptin and log into your existing PTIN account. After selecting PTIN Renewal, you simply review the information you previously provided for any updates, answer two new questions and pay your renewal fee of $63.

http://www.accountingweb.com/topic/tax/california-tax-amnesty-program-opens-august-1

When a business files a tax return indicating that it owes more in payroll taxes than it has deposited, IRS records or assesses the tax liability in its systems. IRS can also identify and assess tax liabilities through its enforcement efforts, such as its examination or nonfiler programs. Once payroll tax debt is assessed and recorded in its database of unpaid taxes, IRS has a number of collection tools at its disposal to attempt to collect from tax debtors who do not voluntarily comply with the tax laws. Each case has unique aspects and therefore may require varying collection methods. However, for payroll tax cases, IRS generally follows a three-step collection process.

• Step 1 Notification of tax debt:
Once a business fails to remit taxes owed, IRS sends the business a series of notice letters. Business tax debt typically stays in the notification phase about 15 weeks.

• Step 2 Assignment for collection:
After tax debt leaves the notice phase, it may be placed in a queue awaiting assignment to collection personnel. If a tax debtor already has tax debt being worked on by collections personnel, it will generally bypass the queue and be assigned directly to the collection officer already working to collect the other tax debt. When a case leaves the queue and is assigned to the field for collections, it is first assigned to a manager. The manager has a waiting list of cases held for assignment to individual revenue officers. A case may be assigned to the field, but not be actively worked on because it is awaiting assignment by the manager.

• Step 3 Collection actions
IRS pursues collection of taxes owed either through direct contact by revenue officers in the field (referred to as the collection field function) or through calls and correspondence by IRS’s Automated Collection System (ACS). IRS’s ACS process consists primarily of telephone calls to the tax debtor through IRS’s nationwide network of call centers. ACS generally handles less complex and lower priority taxes. Because IRS has designated the collection of payroll taxes as one of its top priorities, payroll tax cases generally do not go through the ACS process. Also, although cases may move through the steps sequentially, it is not necessary that they do so. Cases begin in the notice phase, but they may enter the queue or field collection repeatedly.

IRS has numerous enforcement tools that it can use when businesses fail to remit payroll taxes as required. IRS’s tools begin with a series of letters sent to the business in the notice phase to encourage voluntary compliance, which, if not accomplished, can lead to the use of increasingly more aggressive or invasive tools, including filing liens or seizing business assets, and filing for court-ordered injunctive relief.

Once assigned a tax debt for collection, the revenue officer will seek to get full payment from the tax debtor. If the tax debtor is unable to pay in full, the revenue officer will seek to get the debtor to agree to a repayment plan, either an installment agreement or an offer-in-compromise. In general, the revenue officer will seek to get the tax debtor to become compliant and voluntarily pay the tax debt without IRS having to take more intrusive collection actions. The IRS collects over $17 billion of all types of taxes from almost 3+ million tax debtors through installment agreements.

If, however, a tax debtor fails to agree to voluntarily pay the tax debt, the revenue officer can increase the invasiveness of their collection efforts and use its three primary tools to achieve compliance and tax collection: lien, levy, or seizure. If those are not successful at bringing a tax debtor into compliance, in certain circumstances, IRS can seek injunctive relief to close a non-compliant business or seek criminal prosecution for failing to pay payroll taxes, particularly if there are indications of fraud.

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