No cash to pay your tax liability? Negotiate.

Posted: Thursday, April 05, 2001

NEW YORK (AP) -- With utility bills up, stocks down and consumer debt rising, millions of American face the April 16 tax deadline with more than the usual dread. They won't have money to pay their taxes.

Worse, they fear what's ahead: not just interest on the amounts owed but penalties too, creating more bills to be paid, heaping problem atop problem and creating a sense of despair. And no one else to blame.

But there are solutions, none of which begins with despair. You're not alone; you have joined a list of maybe 20 million delinquents, one that remains fairly constant from graduations, but which might grow this year.

Take it from Dan Pilla, who has read, nay studied, the tax code extensively, ferreting details that he uses in books (10), conducting seminars, instructing tax specialists and advising individuals.

Many of those facing the tax deadline feel as if they are on death row with no reprieves and no rights. But they do have rights, he says, maybe even to tax amnesty, difficult as achieving that goal might be.

The origins of Pilla's career as a self-described Tax Litigation Consultant began more than 20 years ago when, still a teenager, he probed into the tax code and saved from seizure his parents' home in St. Paul.

He never ceased probing. Two decades later he operates the Tax Freedom Institute from a base at Winning Publications, White Bear Lake, Minn., publisher of his best seller (160,000 copies) ''How to Get Tax Amnesty.''

Pilla was in town to conduct a free seminar at nearby Fort Lee, NJ, during which he intended to stress five taxpayer rights, which he listed:

1. The right to cancel penalties. ''Every penalty in the tax code can be canceled,'' he said, and that's saying a lot. Last year 34 million penalties were assessed against individuals and business combined.

He doesn't claim cancellation is easy to obtain, since the burden of proof is on the taxpayer to show the penalty shouldn't apply, but it is doable, and he has a tax kit that shows how.

2. The right to cancel computer generated tax assessments, which are issued by the millions each year. Most taxpayers pay the assessments rather than challenging their correctness. They are often wrong, he says.

3. The right to challenge audit decisions. Even face-to-face audits also are often incorrect and can be challenged. But the taxpayer must initiate the action.

4. The right to an extension of time to pay. Not many people know about this, and in fact some tax advisers insist it doesn't exist. It does. It's there, IRS Form 1127, in Pilla's kit.

5. The right to tax amnesty. Again, most taxpayers believe it cannot be done, but it is true that it can be, says Pilla. ''You have the right to negotiate a settlement when you cannot pay.''

In fact, Pilla demonstrated earlier to unbelieving tax specialists, such as attorneys and accountants, that tax relief was even available under the bankruptcy laws, but that could end if a new law is passed.

End Adv PMs Thursday, April 5.

Pilla's ''Taxpayer's First Aid Kit,'' including ''How to Get Tax Amnesty,'' is available at $18.95, shipping and handling included, from Winning Publications, P.O. Box 548, Hugo, Minn 55038, Phone 1-800 346 6829.

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