If You Are in Extremely Dire Circumstances, You May Have Recourse to Effective Tax Administration

If you have been served with a whopping back tax bill by the IRS, there are three strategies you can pursue when filing for an “Offer in Compromise”: 1) “doubt as to liability” (that is, you don’t believe you owe what the IRS claims you owe); 2) “doubt as to collectability” (you simply don’t have the funds to pay your bill); and 3) “effective tax administration,” which invokes the simple principles of fairness and decency. How hard is it to make an “effective tax administration” claim stick? Very!

The IRS Approves Very Few “Effective Tax Administration” Claims

If “effective tax administration” sounds like a very general term, that’s because it is. Basically, it means you are throwing yourself upon the mercy of the IRS, which may entail a certain sacrifice of dignity on your part. Here are some circumstances in which it may be possible to claim effective tax administration:

  • You are mortally ill (not expected to live more than a few weeks or months), and it would be cruel to spend your last few days battling the IRS.
  • You have performed extraordinary acts of self-sacrifice and charity (and “extraordinary” means the kind of stuff that gets you covered in newspapers and on TV).
  • You have recently endured a major tragedy (say, your entire family was killed in a car crash); the mere death of a parent or spouse won’t cut it with the feds.
  • You were the victim of a major natural disaster (say, losing your home in Hurricane Sandy) and are trying to piece your life together.
  • You are involved in some other kind of life-and-death situation, in which you have to give your full attention to the crisis at hand rather than your tax bill.


Are You Thinking of Claiming Effective Tax Administration? Travis W. Watkins, PC Can Help

If you are an Oklahoma taxpayer in extremely dire circumstances—mortally ill with only a few weeks to live, or in some other kind of extreme situation in which no one in their right mind would think about pressing you for taxes—you may be eligible to file an effective tax administration claim with the IRS. How can you know for sure? Contact the Oklahoma tax experts at Travis W. Watkins, PC (800-721-7054) to find out what we can do for you!