Can you really abate (remove) IRS penalty? And other IRS Collection Stats

IRS Delinquent Collection Activities for 2011

This is a review of IRS collection actions for 2011.  This includes Offers in Compromise accepted, Filed Federal tax lien, notices of levy served on third parties, IRS seizures, and IRS penalty abated/removed.  If you have questions about this review, please reference:  bp105.

• If you know you need to take action, read my article “IF” you should hire IRS back tax help.  (You should not automatically.) Titled “Owe IRS back taxes? When, who, and how do I hire IRS back tax help?” before you do anything else.

As usual, If you like the tone of this writing, I would like to refer you to someone who meets irs back tax help criteria.  Please contact irs back tax help.  Before you email me, please click on and read “About irs back tax help.”

Interesting stats for 2011 and somewhat contradictory.  IRS acceptance of Offers in Compromise have jumped dramatically.  Is it due to IRS leniency, or because the main offenders of frivolous offer in compromise filers are out of business?  Ronni Lynn Deutch is out of business, J.K. Harris is out of business, and TaxMasters is in bankruptcy. 

Source:  IRS Back Tax Collections, Offer in Compromise, Federal Tax Liens, IRS Levy, IRS Seizures

IRS Offer in Compromise Accepted and Rejected

There has been a large jump in the percentage of accepted Offers in Compromise with no stated equally dramatic change in policy.  By comparison in 2010, only 24% of all offers were accepted. 

Offers in compromise (thousands) [5]:	2011	% Accepted
Number of offers received	59
Number of offers accepted	20
Amount of offers accepted	154,092	34%

IRS Tax Liens, Levy, & IRS Seizure Stats 

IRS Seizures are the real concern here.  IRS tax liens and IRS levies stayed relatively level. 

Enforcement activity:	2010	2011	% Change
Number of notices of Federal tax liens filed [6]	1,096,376	1,042,230	-5%
Number of notices of levy served on third parties	3,606,818	3,748,884	+4%
Number of seizures	605	776	+22%

 IRS Civil Penalty Abatement Statistics, Yes, it does really happen

Everyone always asks.  Can you really Abate IRS Penalty?  Yes.  The IRS admits it officially.  Roughly one-third of all penalty is abated.  It is important to fight IRS penalty.  46% of all civil penalty is abated for employment taxes.  If your Revenue Officer isn’t working with you on IRS penalty, they should be. 

Table 17.  Civil Penalties Assessed and Abated, by Type of Tax and Type of Penalty, Fiscal Year 2011 [1]
[Money amounts are in thousands of dollars]
Type of tax and type of penalty	Civil penalties assessed		Civil penalties abated [2]
	Number	Amount	Number	Amount
	(1)	(2)	(3)	(4)
Civil penalties, total	38,646,963	30,921,558	4,871,988	11,008,638	36%
Individual income tax:
Civil penalties, total [3]	28,749,882	15,580,904	3,067,370	5,241,771	34%
Accuracy [4]	500,472	1,112,671	51,461	252,004
Bad check	296,559	24,795	11,959	5,088
Delinquency	3,736,987	6,344,147	790,190	2,718,565
Estimated tax	7,366,907	1,569,824	263,442	450,376
Failure to pay	16,841,952	6,291,624	1,944,535	1,697,104
Fraud	2,391	186,116	167	107,263
Other [5]	4,614	51,727	5,616	11,371
Business income tax:
Civil penalties, total	1,080,027	1,496,418	250,325	611,457	41%
Accuracy [4, 6]	4,204	191,564	d	d
Bad check [6]	4,679	14,551	210	250
Delinquency [6]	594,265	651,050	170,685	295,428
Estimated tax [6]	198,697	203,923	8,465	99,486
Failure to pay [6]	259,245	304,238	64,793	149,844
Fraud [6]	192	9,383	d	d
S corporation/partnership information [7]	18,662	117,262	1,758	10,547
Other [6]	83	4,447	4,318	38,618
Employment taxes:
Civil penalties, total [8]	7,745,830	5,298,944	1,364,041	2,424,513	46%
Accuracy [4]	2,590	13,638	238	962
Bad check	192,135	25,154	3,610	2,632
Delinquency	1,669,240	1,340,470	291,429	655,989
Estimated tax	3,595	14,182	648	10,878
Failure to pay	4,162,673	1,100,324	673,166	383,485
Federal tax deposits	1,715,095	2,795,325	394,938	1,370,523
Fraud	256	3,404	12	44
Other	246	6,447	0	0

Not happy with IRS back tax results?  

If you feel like you are on the wrong side of all these statistics, it is probably worth seeking a second opinion.  If you would like irs back tax help to be your first or second opinion, I can be reached at irsbacktaxhelp@gmail.com.  I do not pressure people in an already stressful situation.

Regards,

irs back tax help