The Collection Financial Standards, the measures used by the Internal Revenue Service in negotiating installment agreements and offers in compromise, have been stuck in a time warp, according to observers."They haven't been updated since January 2006," observed New York-based attorney and CPA Michael Breslin, managing partner of FullServe Group LLC. "It has affected our ability to negotiate and it mandates higher amounts that are not fair. These numbers are based on 2005 figures and they were issued in early 2006."
The IRS uses the Collection Financial Standards to help determine a taxpayer's ability to pay a delinquent tax liability. Allowances for food, clothing and other items comprise the National Standards, which apply nationwide except for Alaska and Hawaii, which have their own tables. Taxpayers are allowed the total National Standards amount for their family size and income level, without questioning amounts actually spent.
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