“HELP! I owe back taxes” is something we hear quite frequently. The taxpayer has put off dealing with the IRS and didn’t owe that much to begin with but after months or even years of interest and penalties accumulating, the amount seems insurmountable. Add to that the stress from going to the mailbox each day anticipating a letter from the IRS.
When someone owes back taxes the best resolution option depends largely on that person’s specific facts and circumstances. Facts that are considered include:
- the amount owed
- how long the amount has been owed
- the Taxpayer’s current financial situation
- how the amount came to be owed in the first place
Based on the Taxpayer’s specific facts, we will lay out the options and advise as to the benefits and potential pitfalls of each option.
Possible solutions may include:
- Installment Agreement –
an agreement to pay all or some of the tax debt out over a specific time period.
- Currently Not Collectible –
the IRS does not continue to try to collect the taxes owed if there is no money left over after taking into account the Taxpayer’s income, reasonable living expense, and assets.
- Offer In Compromise –
this is a way to settle the tax debt for a lesser amount, in some circumstances significantly less, but it depends on the Taxpayer’s particular circumstances.
- Audit Reconsideration –
If a Taxpayer is audited and the IRS found more was owed than the amount stated on the original return, the audit results can be reconsidered depending on the circumstances.
The above are a few of the potential ways to resolve your IRS problems. There are others.
Rarely is it in the Taxpayer’s best interest to just ignore the problem and wait for it to go away. At some point the IRS will come knocking. It is much better for the Taxpayer to know his or her rights and meet the IRS on the battlefield prepared. Call or email us to schedule time to discuss how to resolve your tax problems. Remember, there is no such thing as a hopeless tax problem!