The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Tax Facts... Date:  1/10/2010  6:52 PM
Author:  comptche Number:  108406 of 124507

Hi All,

Today I received this list of Facts from the tax preparer, and EA, who does our taxes. He sent it to aid in our discussion with our son who is behind in his taxes with the IRS. I would like to say that we had a great discussion and that the problems were greatly exaggerated as our son told us, but I cannot be certain of that. The discussion has been halted at this time, so we only hope that things will turn out well, but realistically we do not believe they will. It is of some comfort to know what the procedures are from the various agencies... and... as a thank you to all of you who listened and commented earlier, here are the facts that were sent to us:

Tax Facts

The key to getting out of tax problems is to file all returns due. That sets a ten year statute of limitations running from the date the returns are accepted by the IRS (about 45-60 days after they are filed usually). Assuming that the taxpayers do not sign a waiver of statute (can you believe that over 70% do), the debt will expire at the end of the ten year statute.

The State of California has no such rule, which is why most people get the state paid off first. They are vicious and aggressive tax collectors, and seize bank accounts quickly and virtually without warning.

The first step is usually an installment agreement with the IRS. The taxpayers must pay all estimated taxes due for the current year and file all tax returns timely and accurately. Installment agreements are usually for 5 years, but may be longer. The taxpayers usually