We service the Five Boroughs, Nassau County, Suffolk County, Westchester and Rockland County.
The Internal Revenue Service (“IRS”) Restructuring and Reform Act of 1998 (“RRA 98”) celebrated its 18th anniversary this July. This groundbreaking piece of legislation is important for many reasons, perhaps the most notable of which is its grant to taxpayers of collection due process (“CDP”) rights in connection with enforced collection action by the IRS.
The Internal Revenue Service Restructuring and Reform Act of 1998 (“RRA 98”)1 will celebrate its 18th anniversary this July.
Routinely at issue in tax controversies is the extent to which (if at all) a taxpayer who is involved in rental real estate activities may deduct losses related to that activity. Not surprisingly, because the ability to use passive losses to offset active income, taxpayers who own rental real estate activity frequently (and often improperly) treat themselves as “real estate professionals” when they are in fact real estate investors.
Debt-saddled taxpayers frequently ask their tax advisors whether a Chapter 7 or Chapter 13 bankruptcy or an offer in compromise (“OIC”) is the best option for resolving tax debts. The short answer is, not surprisingly, that “it depends,” because one size does not fit all. Evaluating the alternative that best suits a client’s needs requires familiarity with bankruptcy law, tax procedure, and evolving case law involving the overlap of the two. This article explores the considerations that inform the choice between seeking a bankruptcy or an OIC as a means of resolving tax debts.1