Abatement – Reduction or removal of penalties and the interest charged on those penalties.
Appeals – The right of a taxpayer to seek reconsideration of either a tax assessment or rejected application for tax relief. The IRS provides an Independent Office of Appeals for the purpose of considering these cases, in which there are certain safeguards designed to encourage impartiality in the Appeals officers. State taxing authorities may provide similar mechanisms for appeals.
ACS / Automated Collection System – A call center collection department utilized by the IRS to collect delinquent tax liabilities. ACS has the authority to levy assets and wages, as well as the power to file liens.
CSED / Collection Statute Expiration Date – The date at which the taxing authority loses the right to collect on all or part of an unpaid tax liability. For the IRS, the collection statute typically expires after 10 years; however, some factors may pause, prolong, or even waive the statute. State taxing authorities vary in length of time and application of statute rules, with some states providing no collection statute of limitations at all.
Form 2848 / Power of Attorney / POA – An official form giving your authorized representative(s) full authority to administratively negotiate on your behalf with the IRS. Filing of a 2848 requires that IRS contact the taxpayer’s representation instead of the taxpayer. State taxing authorities may provide similar administrative forms.
Form 8821 / Tax Information Authorization – An official form allowing the designated appointee(s) to receive and review IRS account information.
IA / Installment Agreement – A payment plan with the IRS or state to satisfy a tax liability. Payment amounts may be changed at the discretion of the IRS or state. Penalties and interest continue to accrue while in an IA.
Innocent Spouse / Equitable Relief – In broad terms, a form of tax relief in which one spouse may apply to separate his or her personal responsibility for repayment of a tax. This may result in reduction or complete removal of that spouse’s personal tax obligation.
IRC / Internal Revenue Code – The rules and laws established for calculating and collecting taxes; these rules also detail taxpayers’ rights.
IRM / Internal Revenue Manual – The employee handbook used by IRS agents for the collection of tax liabilities.
Lien – A legal claim to a taxpayer’s property as security for an unpaid tax, placed by the IRS or state taxing authority. It is a public record filed in the county courthouse(s) in which the taxpayer or business lives and/or owns property. When a lien is filed, the taxpayer is granted appeal rights which may be used to reach a resolution of the tax matter.
Levy / Garnishment – A seizure by the IRS or state taxing authority of personal assets such as bank accounts, wages, accounts receivable, retirement accounts, Social Security benefits, and any other income or assets. A levy can be continuous, such as a wage or Social Security garnishment which may affect multiple pay periods; or it may be one-time, such as the seizure of a bank account, tax refund, or physical property.
NoDef / Notice of Deficiency – Final notice from the IRS proposing additional tax assessments against the taxpayer after completion of an audit.
OIC / Offer in Compromise / “Fresh Start Initiative” – A formal process in which a taxpayer may offer to pay off a tax liability for a lower amount than what is owed. If accepted, the IRS will require full payment of the proposed offer, continued timely filing of returns, and full timely payment of future tax responsibilities for a specified look-back period. State taxing authorities often have similar programs with their own requirements.
RO / Revenue Officer – An agent of the IRS or state taxing authority personally assigned the responsibility to collect unpaid taxes. This individual is often located in the same city or geographic area as the taxpayer. ROs often communicate by phone and email, though they may also visit a taxpayer’s home, place of employment, neighbors, bank, client locations, or any place that will assist in efforts to investigate and ultimately collect from the taxpayer. RO tactics can be very aggressive and intimidating. If the taxpayer has representation, the RO is required to communicate with the representative instead of the taxpayer.
Seizure – The IRS or state taxing authority taking possession of a delinquent taxpayer’s property or assets in order to collect against a tax liability. The IRS or state taxing authority may then attempt to auction off the property that was seized.
SFR / Substitute for Return – A return prepared by the IRS or state taxing authority using the information it has available, filed on behalf of a taxpayer who has yet to submit a delinquent return. Substitute returns do not reflect credits, deductions, or tax benefits for which the taxpayer may have been eligible. This may create a large tax liability along with greater penalties and interest.