Common Tax Law Terms

TAX RESOLUTION:

 

This term refers to a variety of different methods that lead to an agreed-upon solution with the taxing authority.

CURRENTLY NOT COLLECTIBLE:

This is a designated status wherein the taxing authority considers the debt to be incapable of collection at the present time. While it is not an ultimate solution, it can be a viable alternative to continuing collection actions.

OFFER-IN-COMPROMISE:

This is a process wherein the taxing service agrees to accept a payment below that which is legally due. While this is a very viable option that provides permanent relief, it has specific rules and procedures that are best handled by an experienced professional who knows the procedures and the proper amount and payment schedule for an acceptable offer.

STATUTE OF LIMITATIONS:

This refers to various laws and regulations that control the amount of time taxing authorities have to attempt to collect a debt. There are numerous regulations and criteria that affect a Statute of Limitations and enforceability within the proper time periods.

INSTALLMENT AGREEMENTS:

This is a voluntary arrangement between the taxpayer and federal or state taxing authorities that allows for the payment of a debt due over time. Installment agreements can be a good interim step, but need to be carefully analyzed as they often don't lead to a final payment for the tax. They need to be handled properly since the debt can actually continue to increase and the statute of limitations to be delayed.

TAX BANK LEVIES:

This is the process by which federal or state taxing authorities attach and drain taxpayer bank accounts. Unlike regular creditors, taxing authorities can liquidate bank accounts without the need for a court order. Instead, the taxing authorities have statutory liens rights created by state and federal law.

TAX REVENUE OFFICERS:

These are government employees in charge of reviewing and enforcing the taxing authority's right to collect on delinquent accounts.

TAX LIEN:

These are attachments against real or personal property in an effort to secure the debts owed to the government. It provides the government with collateral to secure a previously unsecured debt.

TAX WAGE GARNISHMENT:

This refers to the process by which government taxing authorities levy payments due to the taxpayer. This usually comes in the form of a lien against the taxpayer's wages. Like many other state and federal collections, it does not require a court hearing or a court judgment.

TAX FORGIVENESS:

This term refers to the relinquishment of all or part of a debt properly due to the state or federal taxing authorities. It is a viable resolution that comes through the taxpayer's efforts and a voluntary but permanent agreement with the taxing authority.

TAX DISCHARGEABILITY:

This term refers to the taxpayer's right to discharge or extinguish certain state or federal taxes through the bankruptcy system. It is a powerful tool for resolving taxes that does not require approval from either the state or the federal authorities. It is a right available to taxpayers in the bankruptcy system when the taxes meet certain statutory requirements.

TAX TRANSCRIPT:

This refers to a record of the taxpayer's account, which is available to the taxpayer upon proper request. It provides the taxpayer with the government's full disclosure of the taxpayer's record. Obtaining a tax transcript is often the first step taken by experienced professionals seeking to provide appropriate relief for a delinquent taxpayer.

INNOCENT SPOUSE:

This refers to the ability of one spouse to avoid liability on a jointly filed return. Under certain specific circumstances, it allows one spouse to avoid collection for jointly owed tax debts.

TAX AMNESTY:

This is the process whereby government tax authorities can offer a one-time alternative to delinquent taxpayers for forgiveness or reduction for those that meet the proper criteria and come forward to present their case within a limited and specified time period.