JK Harris Praises National Taxpayer Advocate's Annual Report to Congress.
National Taxpayer Advocate Nina E. Olson has again identified the need for tax reform as the number one priority in tax administration. Olson also expressed concern over the IRS' increasing use of tax liens and the lack of use of collection alternatives, such as the Offer in Compromise program.
Olson's report stated that in Fiscal Year 2010, the IRS filed tax liens against 1.1 million taxpayers. Tax liens can be devastating for a taxpayer that may already be struggling due to financial burdens. Credit reporting agencies pick up these liens and they stay on a taxpayer's credit report for seven years after the tax liability has been paid. The lien remains longer if the liability is not resolved.
"Increasingly, employers, mortgage lenders, landlords, car dealerships, auto insurance companies, and credit card issuers utilize credit reports, so a tax lien has the ability to render someone unemployable, unable to obtain housing (owned or rented), and unable to obtain car insurance or a credit card, at least at reasonable rates, for many years into the future," said Olson.
"I am glad to see Ms. Olson address tax liens in this year's annual report," said Harris. "We have noted an increased use of tax liens - which can be financially and emotionally draining for our clients."
According to the report, the IRS does not have data showing the increased use of liens has furthered collection efforts. A Taxpayer Advocate Service study conducted in 2009 suggested that lien filings may actually reduce long-term tax collection efforts, yet lien filings increased by 550 percent. The National Taxpayer Advocate is recommending that the IRS contact taxpayers by phone or in-person before issuing levies or filing liens to ensure that all efforts are being made for taxpayer compliance. Additionally, Ms. Olsen has recommended that IRS suspend its policy of automated lien filings based on unpaid balance threshold.
The report also stated the IRS has taken steps to reassess its collection policies, but that more steps should be taken quickly. Olson reiterates her longstanding suggestion that the IRS make greater use of collection alternatives, such as the offer in compromise program, for taxpayers who cannot pay their tax liability in full. According to Olson, the IRS needs to take a more realistic approach when considering a taxpayer's debts, such as the debts disallowed by the IRS when a taxpayer is applying for the Offer program. Some of these disallowed expenses include credit card bills, delinquent state or local taxes, court-ordered payments, excessive mortgage expenses and any other bill the taxpayer has but is currently not paying - such as student loans, medical bills, and secured debts.
"When it is used properly, the offer in compromise is a winner for the IRS and the taxpayer," Harris said. "For our clients who have qualified for this program, it has given them a second chance financially. They are grateful for that."
About JK Harris:
JK Harris & Company, LLC, (www.jkharris.com) based in Goose Creek, S.C., is the nation's largest tax representation firm and has served over 250,000 customers since its founding in 1997 by John K. Harris. JK Harris consultants are available to meet with consumers in over 325 locations nationwide by appointment only. The company also provides services for tax return preparation and audit representation.
JK Harris & Company
1-888-833-5156 ext. 2513
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|Publication:||PR.com (Press Releases)|
|Date:||Jan 13, 2011|
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