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New On The Network Today

This feed is published daily with selected new or updated content from across our network. For a list of network sites, many of which feature daily news, see below.

 
29/07 New Lowtax Editor Column, by Kitty Miv
28/07 New PBTG Editor Column, Caroline, PBTG editor
27/07 UK Launches Raft Of Tax Consultations, Tax-News.com
26/07 Fat Tax On The Menu , Jeremy Hetherington-Gore blog entry
23/07 Sarkozy Seeks 'Fiscal Convergence' With Germany, Tax-News.com
20/07 Singapore Base For Tuvalu OIFC, Tax-News.com
19/07 Expats Turn Backs On US Taxes, Tax-News.com
16/07 Congress Approves US Financial Reform Bill, Tax-News.com
15/07 New Lowtax Editor Column, by Kitty Miv
15/07 St Vincent & The Grenadines, Investors Offshore special feature
13/07 Tax-News.com Jersey Review 2010-2011
12/07 Goodbye To All That, Jeremy Hetherington-Gore blog entry
09/07 Antigua Pursuing Trade Sanctions Against US, Tax-News.com
08/07 New Lowtax Editor Column, by Kitty Miv
06/07 Hong Kong Full PBTG Guide, added to Personal Business Tax Guide
05/07 Australian Mining Tax Agreement Reached, Tax-News.com
02/07 Online Trading For Expats, Investors Offshore special feature
29/06 EC To Extend Common System Of VAT, Tax-News.com
28/06 Lowtax Dubai, annual update
25/06 Jersey Considers Tax Future, Tax-News.com
22/06 VAT Hiked In UK Emergency Budget, Tax-News.com
21/06 Steady Progress In TPP Negotiations, Tax-News.com
18/06 Singapore - Another Hong Kong?, Investors Offshore special feature
15/06 Swiss Parliament Approves UBS Agreement, Tax-News.com
14/06 Ethical Moonshine, Penelope Wise blog entry
11/06 Germany Purchases Stolen Tax Data Disc, Tax-News.com
08/06 Dubai Full PBTG Guide, added to Personal Business Tax Guide
07/06 G-20 Shelves Global Bank Tax, Tax-News.com
04/06 Lowtax Panama, annual update
01/06 Lowtax Luxembourg, annual update
31/05 OECD And EU Strengthen Tax Cooperation, Tax-News.com
28/05 Lowtax Guernsey, annual update
25/05 Lowtax Jersey, annual update
24/05 Lithuania Summary PBTG Guide, added to Personal Business Tax Guide
21/05 Lowtax Liechtenstein, annual update
18/05 Latvia Summary PBTG Guide, added to Personal Business Tax Guide
17/05 Offshore And The Euro, Jeremy Hetherington-Gore blog entry
14/05 IO Focus: Barbados, Investors Offshore special feature
03/03 Personal Business Tax Guide, PBTG, has launched!
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Lewis Introduces US Tax Compromise Improvement Act, by Leroy Baker, Tax-News.com, New York
Tuesday, May 19, 2009

Legislation has been introduced in the United States House of Representatives that would help struggling taxpayers enter into offer-in-compromise (OIC) agreements with the Internal Revenue Service (IRS).

The legislation, known as the Tax Compromise Improvement Act of 2009, was introduced by Ways and Means Oversight Subcommittee Chairman John Lewis, a Georgia Democrat, and Ranking Member Charles W. Boustany, Jr., a Louisiana Republican, on May 12.

OIC agreements are an important collection alternative for the IRS and taxpayers. Many taxpayers seeking to enter into OIC agreements have recently lost jobs or are experiencing financial difficulties.

Taxpayers can apply for an OIC agreement with the IRS to settle their unpaid taxes. Under current law, because of legislation passed in 2006, a taxpayer offering to settle a tax liability must make a partial payment with submission of an OIC application (e.g., a nonrefundable, 20% down payment). If the OIC application is turned down, the taxpayer’s down payment is not refunded. Under the Lewis/Boustany bill, taxpayers would not be required to submit a partial payment with their applications.

According to the two lawmakers, the legislation is consistent with the administration’s fiscal year 2010 revenue proposal to eliminate the partial pay requirement.

The need to increase the usage of OIC agreements in situations of economic hardship was raised at a February hearing of the Ways and Means Subcommittee on Oversight examining IRS assistance to taxpayers during the economic downturn.

In announcing the hearing, Lewis said: “Americans are suffering during these difficult economic times. They are trying to do the right thing and pay their taxes, but they may be unable. We need to understand their problems. They need to reach out to the IRS for assistance. Together, we must find ways to collect the proper amount of taxes owed in a manner that is fair and recognizes the problems that taxpayers are facing during this recession.”

At the hearing, National Taxpayer Advocate Nina E. Olson testified that the number of OICs received by the IRS fell by 21% from fiscal year 2006 to fiscal year 2007 as the down payment requirement took effect.

Olson testified that the 21% decline is partly attributable to the difficulty taxpayers face in obtaining funds to make the 20% down payment prior to the acceptance of an offer. She also noted that less than one in four offers is actually accepted. As a result, federal taxes that could be collected are left unpaid.

Olson’s last annual report to Congress, released in January 2009, urged more compassion from the IRS in dealing with financially distressed taxpayers.

“It is imperative for the IRS to consider the circumstances of taxpayers facing economic hardship before initiating enforcement actions,” Olson wrote.

When the IRS contemplates taking an enforced collection action such as a levy, a lien or an asset seizure, both the tax code and IRS procedures require that IRS personnel consider whether the collection action will impose an economic hardship on the taxpayer.

Despite these requirements, “current IRS guidance provides little direction to help IRS employees identify taxpayers who are experiencing economic hardship and prevent undue economic burden,” Olson wrote.

Olson’s report made three principal recommendations to reduce burden on financially struggling taxpayers, including: making greater use of collection alternatives when economic hardship is present; simplifying the “cancellation of debt” minefield that many taxpayers who default on debts must navigate; and implementing a “screen” to protect low income Social Security recipients from continuous, automated tax levies.

Olson estimated in her report that tens of thousands and possibly hundreds of thousands of taxpayers who qualify to exclude canceled debts from gross income do not file the appropriate form to claim allowable exclusions. Instead, some of these taxpayers unnecessarily include the amount of the canceled debt in gross income, and other taxpayers who fail to include it unnecessarily face IRS examinations and tax assessments.

The Taxpayer Advocate’s report recommended that Congress change the law to remove taxpayers with modest amounts of debt cancellation from the cancellation of debt income regime, and recommended that the IRS develop an insolvency worksheet that taxpayers can file with their returns and create a centralized unit dedicated to handling cancellation of debt issues.

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