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In July, 1998, President Clinton signed the IRS Restructuring and Reform Bill of 1998. This legislation is the beginning of a true taxpayer revolution to put respect for the individual taxpayer back into the system. I am very proud to have taken an active part with the Senate in suggesting and structuring many of these new rights and procedures.

Congress legislated many demands upon the IRS to more fully communicate with the public and to grant taxpayers a whole new bundle of rights known as "due process". Unfortunately, the IRS has not effectively communicated most of these new rules to Mr. and Mrs. America. I'm going to do that in this series of articles.

If you owe the IRS, you're not alone. According to the latest study, at least $214 billion is on the IRS' books as owing. As time goes by, Congress will continue to put pressure on the IRS to collect as much of this money as is humanly possible. We can expect the IRS to become more aggressive in its tax collection efforts.

I have been practicing in the field of tax collection matters for many years. I have written at least 10 books on IRS and California collection matters, taught at USC's Graduate School of Accounting and have lectured to CPAs and attorneys throughout the country for the past 20 years.

When the IRS comes around to collect, you can run but you can't hide. Sooner or later, you're going to have to face the music. If you play games with the tax collector, the system is designed to make your life miserable. However, you have new rights. Let me explain.

Bob's Ten Commandments When You Owe the IRS

1. Don't ignore any IRS notices. We've all seen the picture of the ostrich with its head in the ground. Don't let this be you. More people get into more trouble than they've ever bargained for because they ignore those computer-generated IRS notices. Some IRS notices are sent by certified mail. If you think you can ignore these notices by not going to the post office to pick them up, forget about it!

2. The IRS must explain your rights during an IRS interview. The IRS has recently revised its publication entitled "The IRS Collection Process". This publication tells you that you have a right to be represented and that you have a right to be treated in a professional and courteous manner. If you do not like the way you are being treated, you can stop the interview and ask to speak with a supervisor.

3. Before you go to the IRS, spend an hour with a tax expert. This may be the best hour you've spent in a long time. The expert will tell you how to prepare for your collection interview, how to conduct yourself and make you aware of when the IRS revenue officer is attempting to take advantage of you. You must always remember that the IRS revenue officer's job is to collect money for the Government. Forget all this nonsense about "I'm from the IRS and I'm here to help you."

4. "If you go down to the woods today, you better not go alone." You might remember that line from the child's song, "The Teddy Bear's Picnic". IRS collection interviews are no picnic and you should have representation. I cannot count how many times people have paid the IRS much more than they should. Representation will help run interference between the IRS and you. The chances are you will wind up with much better results with representation than going it alone.

5. The IRS makes mistakes. Recently, the IRS was "audited" by the General Accounting Office. They results were a disaster for the IRS. It seems that the IRS' own house needs quite a cleaning. We practitioners have known this for a long time. Often, the IRS cannot keep track of how much you owe, especially if you have been making regular payments. I have seen many cases where people have been making payments on tax debts that have either been fully paid or the IRS can no longer collect because of the expiration of the statute of limitations for collection. It's usually a good idea to always question what the IRS says you owe.

6. You now have due process. I am very proud to have helped Congress in creating due process rights for taxpayers who owe the IRS. The IRS can no longer simply take your bank account, your automobile, your business or garnish your wages without giving you written notice and an opportunity to challenge what the IRS says you owe or the way they go about doing their business. When you challenge the IRS, all collection activity must come to a screeching halt! You can even take the IRS to court and they cannot collect from you until the judge issues a decision. You can literally tie the IRS' hands for years. You must act to protect your rights. The IRS is not going to tell you what to do or how to protect yourself.

7. You may be an innocent spouse. Are you widowed, divorced or separated? Do you have tax problems that arose out of the actions of your former spouse? If you have answered yes to these questions, you may be entitled to innocent spouse relief. This relief could result in the entire tax bill being written off against you. Yes, the State of California also grants innocent spouse relief.

8. "I owe, I owe - is it off to jail I go?" No. In this country, no one goes to jail for owing taxes. You can go to jail for cheating on your taxes and you can go to jail for trying to trick the tax collector, but you can't go to jail simply because you owe the IRS and can't pay.

9. "I owe, I owe - what can I do?" People who owe taxes, whether to the IRS or the State of California, generally have several approach they can take toward solving their problem. First, if you owe and can pay in full, you should pay the taxes despite the pain. However, if you cannot pay in full, four avenues may be open to you:

10. Respect the power of the tax collector. IRS tax collectors have more power than just about anyone in the federal government. They operate under very few rules. They can make your life pleasant or miserable. Most success in dealing with tax collectors comes from your communicating with them in a prompt manner. Here is a sampling of what they can do: