Substitutes forms now allowed for offers in compromise
Article Abstract:
IRC Sec. 7122 allows the IRS to assent to offers in compromise to improve its collection. This offer is defined as the proposal of the taxpayer to erase its tax liability in full by settling less than the entire amount the IRS is seeking. The agency can accept such an offer if one of two conditions are met: that there is doubt as to liability and there is doubt as to collectibility. Taxpayers must prove that they are willing to pay an amount that exceeds what the IRS could collect through the use of conventional methods, including liens, levies and attachments. Financial information should be submitted to the IRS indicating the future income and current net assets of the taxpayer. The taxpayer should offer an amount that is greater than its equity in the assets and greater than what the IRS feels it can collect for the duration of the 10-year limitations period on collections.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
Some workers are entitled to a tax-free lunch
Article Abstract:
The IRS held in TAM 9829001 that a casino can exclude under Sec 119 only those meals it furnished to its food service and security employees since they were the only meals given for the convenience of the employer. According to Sec 119(a), employer-provided meals can be excluded from the gross income of an employee if they are provided on the employer's premises and for the employer's convenience. The casino offered a number of reasons for offering meals to employees but none of them were related to business necessity or employees' job performance, and therefore were not valid. The IRS released a settlement initiative in 1998 to enable hospitality industry companies to deal with issues regarding employee meals. Taxpayers that want to avail of this initiative should write no later than 30 days after the draft training materials are finalized.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
Regs. attack separation of income and expenses
Article Abstract:
The IRS fulfills its promised attack on lease-stripping transactions under Sec. 7701(1) through new Proposed Regulations. Effectiveness of the Regulations starts with transactions where a major element is fulfilled after Oct. 12, 1995. Under Prop. Reg. 1.7701(1)-1, the improper separation of income from deductions is considered as obligation-shifting transaction. The three parties involved in this transaction are the property provider, the property user and the assuming party. One of the two elements of an obligation-shifting transaction are that the assuming party makes an assumption or acquisition of property covered by the obligation of a property provider to a property user. The other element is that the right to receive income allocable to a period after the transaction has been received, retained or sold by the property provider.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: IRS procedures for offers-in-compromise under section 7122. Mergers & acquisitions: tax strategies
- Abstracts: Last rites for duty free. Here comes the euro
- Abstracts: Determinants of the variability in corporate effective tax rates: evidence from longitudinal data. part 2 Taxpayer behavior in response to taxation: comment and new experimental evidence
- Abstracts: Strategies for handling IRS assessments. The risks and rewards of limited liability companies. LLCs are generally - but not always - the right choice