IRS Offers New Help to Struggling Taxpayers - Fresh Start for Federal Tax Liens

Tough times are all around, and apparently the IRS recognizes this as well.  The IRS recently announced a series of new initiatives to " to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. "

The changes center around how the IRS files liens against taxpayers for failure to pay their taxes, and include 5 key provisions:

  • Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.  This is being done to address inflation.
  • Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
  • Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.  This will apply to taxpayers with $25,000 or less of unpaid taxes, interest and penalties who have entered into a payment plan with the IRS.  You can see a video about the Direct Debit Installment Program here.
  • Creating easier access to Installment Agreements for more struggling small businesses.  This will be done by increasing the program participation threshold of unpaid  taxes, interest and penalties from $10,000 to $25,000.
  • Expanding a streamlined Offer in Compromise program to cover more taxpayers.  The income limits will be increased to $100,00, and the tax liability threshold doubled from $25,000 to $50,000.

A federal tax lien is a tool of the IRS whereby they have a legal claim to the property of a taxpayer who has not paid their taxes. It includes all property owned by the taxpayer at the time filed or after acquired.  Needless to say, a federal tax lien dramatically decreases your credit worthiness.

Questions on addressing federal tax liens are handled through the Firm's Tax Department, or complete a request for more information to the right ------>

Money in Your Pocket - It's Real Estate Tax Appeal Season until April 1

Money HouseWant more money this year?  You may be entitled to a reduction in your property taxes due to a decrease in value in your property from general economic conditions.  Key points:

  1. You MUST file by April 1 

  2. You will need your real estate tax bill, and recent sales of comparable properties (try  

Got questions or need help? You can reach out to Steve Loeb, Esq. in our Tax Department.  I have added below some information about real estate tax appeals that Steve recently sent to our clients.

New Jersey mandates that an individual pay taxes based upon the fair market value of the property, not necessarily the assessed value.

The New Jersey laws governing tax appeals are found at N.J.S.A. 54:3 et. seq. and N.J.S.A. 54:4 et. seq. and N.J.A.C. 18:12A et. seq.

Property Taxes are the result of the local budget process and it may not necessarily be appealed, but the property tax assessment may be. A taxpayer considering an appeal should understand that he or she must prove that his or her assessed value is unreasonable compared to a market value standard.

According to New Jersey law, the current assessment set is assumed to be correct. The ability to overcome this presumption of correctness to obtain an assessment change is based upon fair market value.

In essence, an assessment is an opinion of value by a licensed professional. For an assessed value to be considered excessive or discriminatory, it must be proved that the assessment does not fairly represent one of two standards:

1. True Market Value Standards
2. Common Level Range Standard

In 1973, the New Jersey legislator adopted a formula known as Chapter 123 to test the fairness of an assessment. Once the tax board determines a property’s true market value during an appeal, they are required to compare true market value to the assessed value. If the ratio of assessed value to true value exceeds the average ratio by 15% the assessment is reduced to the common level.

In this time where assessments may be not in line with current market value standards, if you should have any questions or need assistance in filing a real estate tax appeal, please feel free to contact Steve Loeb, Esq. in our Tax Department.

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Real Estate Tax Appeals - Filing Thresholds have Changed for 2010

Real estate tax appeals for both commercial and residential property have been a hot topic.  As the real estate market sinks, many taxpayers find that they are paying taxes on real estate due to assessments made when the value of the property was 20-40% higher.

Up to now if you wanted to file a tax appeal and property assessed up to $750,000, you would have had to have filed in the County Board of Taxation.  Now, they have changed the law so that property assessed up to $1 million must also be filed at the County Board of Taxation. 

The fear is that self service taxpayers will be unaware of the change, file in Tax Court, and then miss the filing date on the county level.  There is no "oops" defense to  missing the filing deadlines.

The law change took place in an amendment to Rule 54:3-21 through Assembly Bill 4313.  The stated purpose of this change in law is to "decrease the overburdened Tax Court's caseload and allow these cases to be heard by county boards of taxation...".

Again, the critical issue is that if a person files a tax appeal in the wrong jurisdiction, you may be considered out of time to then re-file in the correct court of competent jurisdiction.

Specific questions on real estate tax appeals can be directed to my colleague Steve Loeb, Esq. in our Tax Department.

Image: Salvatore Vuono /