The Tax Genie genie


Here are some definitions, descriptions, and/or general comments about most of the technical, collection related terms used in these documents.

ASSET - from the position of the IRS, an asset is any item that has value. If there's equity in the item, the IRS considers it fair game. To mention just a few categories that could be included: cash, bank accounts, 401K, real property (house, car, boat, jewelry), accounts receivable, wages, etc., etc.

CID (CRIMINAL INVESTIGATION DIVISION) - the IRS division which is set up to investigate tax crimes.

COLLECTION DIVISION - the IRS branch responsible for collecting unpaid taxes.

COMPLIANCE - the taxpayer must file all tax returns and pay all taxes when due as prescribed by law. In the case of an Offer in Compromise acceptance, the taxpayer must be in Compliance for the following five year period, otherwise a "default" occurs.

DEFAULT - if an arrangement has been made with the Collection Division to pay delinquent taxes on an Installment basis, make certain you make every payment on time, in full, otherwise you have "defaulted" and the IRS can then start enforced collection action for the entire amount due.

FINANCIAL EXPOSURE - if you're delinquent paying taxes, you run the risk of the IRS attaching and/or taking your assets.

INTEREST - money you are charged by the Government for using the money you owe the Government, i.e. the taxes you haven't paid.

INTERNAL REVENUE CODE - the actual tax laws of the US, which have been structured and enacted by Congress.

LEVY - the process through which the delinquent taxpayers' property, including wages, are seized by the IRS in order to pay the amount of tax owed.

LIEN - the governments' legal claim against the delinquent taxpayer which attaches to the property owned by the taxpayer. (see "ASSET" above)

NOTICES - the IRS has a number of procedural forms, termed "Notices", which are designed to inform the taxpaying entity of tax delinquency, deadlines and enforced collection potential or actions. The most incapacitating are 1. the "Notice of Lien" which essentially puts the taxpayers' financial life on hold, and, 2. a "Notice of Levy" which will actually take an asset.

OFFER IN COMPROMISE (OIC) - a formal process, requiring documentation, appealing to the IRS to accept less then full payment of delinquent taxes. The delinquent taxpayer requesting an OIC must QUALIFY under the conditions of the IRS OIC Program. (It takes knowledge to qualify and time to complete an OIC successfully.)

PENALTIES - if you haven't paid your taxes on time, the IRS imposes additional, charges which will significantly increase the amount you legally owe the Government. The idea is, if the costs for not filing or paying taxes on time are very high, then taxpayers will be motivated to file and pay their taxes when due.

REVENUE OFFICER - a Collection Division employee responsible for contact and communications with delinquent taxpayers. His or her job is to get the tax money owed as quickly as possible. They can initiate significant legal processes to help collect assets from the taxpayer.

TAX DELINQUENCY - if you missed paying your taxes when they were due, you have a tax delinquency.

TAXPAYING ENTITY - any person, persons, spouses, partnerships, businesses, corporations, etc., etc., which have the obligation under the law to file and pay taxes.