Enrolled Agents should take special note of President Bush's fiscal year 2008 budget proposal to allow the Internal Revenue Service to terminate installment agreements.
One of the surprisingly few requests aimed at narrowing the tax gap in the president's request would end installment agreements when a taxpayer fails to file a timely return or fails to make timely required tax deposits.
At the top of the president's list is expanded information reporting, followed by increased penalties and new requirements for large businesses.
The president's budget request includes a second proposal designed to eliminate the requirement that an opinion from the IRS Office of Chief Counsel accompany every offer in compromise agreement reached on a tax liability of $50,000 or more. The budget request also calls for increasing the AMT exemption levels to $43,900 for single-filers ($65,350 for married filing jointly, $32,675 for married filing separately) for 2007.
Calling the proposals âtotally unacceptable,â Senate Finance Committee Chairman Max Baucus (D-Mont.) complained to Treasury Secretary Hank Paulson that the president's proposals would collect just $2.9 billion of the estimated $345 billion tax gap. Paulson agreed to testify in an upcoming Finance Committee hearing on the tax gap.