Offers In Compromise Following Criminal Tax Cases.

Ron Isley, the musician, has apparently had his share of problems, including bankruptcies and a criminal tax prosecution. Recently, the Tax Court issued an interesting opinion dealing with the question whether back taxes that were the subject of a criminal tax prosecution can be reduced through an offer in compromise when the defendant cannot pay in full. Isley v. Comm’r, 2013 U.S. Tax Ct. LEXIS 31 (Nov. 6, 2013).

To provide the context, Isley was convicted for several counts of tax evasion and one count of willful failure to file a tax return in a case involving tax years 1997-2002. 2013 U.S.Read More

No Relief: A Collection Due Process Hearing Cannot Be Used to Review a Returned Offer in Compromise.

Under Section 6330 of the Internal Revue Code, taxpayers have the right to a collection due process hearing upon receipt of notice of intent to levy. The same hearing is also available when a tax lien is filed. I.R.C. § 6320. Among the issues that can be addressed at the hearing is a collection alternative, such as an offer in compromise. I.R.C. § 6330(c)(2)(A)(iii).

The tax court recently addressed a novel question: can a taxpayer use a collection due process hearing as a forum to obtain approval of an offer in compromise that was previously returned as nonprocessable? In Reed v.Read More