How to Solve Any IRS Problem

Consult with a Santa Clarita Debt Relief Attorney

Being constantly harassed and pursued by the Internal Revenue Service (IRS) over owed debts can be an overwhelming experience.

While many would like to believe otherwise, these problems will not simply disappear if ignored. The reality is quite the opposite – these problems will only get worse until being faced head on. Even though your situation may feel hopeless, it is important to know that relief is available and that you are not alone during this difficult time. In fact, almost 30 million other taxpayers are in trouble with the IRS in some form. No matter how difficult or seemingly insurmountable your situation may appear to be, every IRS problem has a solution.

In many cases, IRS problems fall into one of two categories:

1. You are behind on filing some tax returns, and/or
2. You have a bill from the IRS that you cannot pay

If you are behind on your tax returns, your first order of business is to get caught up. The IRS will often not be willing to cooperate or negotiate a solution until you have made a good faith effort to get back in its good graces. Furthermore, filing your tax returns is a crucial step in finding out exactly what you owe and what the IRS expects.

What Does the IRS Know About Me?

In order to negotiate a solution, you must first find out what exactly the IRS knows about you and what information it claims to be missing. If your taxes are backed up so far that you don’t even know what you are missing, call the IRS and request a record for any tax years or periods that are in question. This will allow you to see your history of filed returns, payments, liens, and any other actions that the IRS may have taken against you.

Once you have caught up on your filings and gotten an idea of what you owe, there are several possible solutions you may pursue:

1. Pursue an Offer in Compromise - Through the offer in compromise (OIC) program, you may be able to negotiate with the IRS for a considerable reduction in the amount of your owed debts. It is important to note that this program has strict qualification criteria and the amount the IRS will settle for will depend largely on your income, expenses, and assets. Generally speaking, the less assets and income you have, the better. If you qualify and are able to negotiate a settlement, your tax troubles will be over. If you do not qualify, you may still be able to pursue a “penalty abatement” which could eliminate up to 60% of your tax debt.
2. Negotiate an Installment Agreement - Possibly the most common resolution option is to negotiate a repayment plan known as an Installment Agreement in which you will make affordable monthly payments to the IRS to pay back your owed debts. Payments may fluctuate in amount based on seasonal income if needed. In some cases, you may simply be required to make payments until the statute of limitations on the debt expires – at which time, the remaining amount will be forgiven.
3. Have your taxes deemed “uncollectible” - If you are unable to pay back the debt due to insufficient income and assets, the IRS may declare your tax accounts uncollectible and leave you alone until your financial situation improves. This status may last for one or more years and will be reviewed periodically by the IRS.
4. File for bankruptcy - Under certain circumstances, personal income tax debts may be discharged through Chapter 7 bankruptcy. In order to be discharged, taxes must be at least three years old, have been timely filed or were filed more than two years ago, and were not assessed in the last 240 days. If you do not qualify for Chapter 7 bankruptcy, your taxes may be paid back through a Chapter 13 repayment plan.
5. Pay the IRS the full amount - This option is self-explanatory. If you have substantial assets or income, paying the IRS the full amount may be your only option for getting them off your back.

What Happens if I Have an IRS Installment Agreement While in Chapter 13?

If you have an installment agreement with the IRS, the bankruptcy court will not allow you to continue it if you file for Chapter 13 bankruptcy. You will be required to pay your priority tax debt in-full within 3 - 5 years depending on your disposable income. In some cases, this may or may not work out in your favor depending on the circumstances. Reach out to an experienced bankruptcy attorney at Financial Recovery Law to better understand the options available to you.

Put an End to Your Tax Struggles Today

Arguably the most important step of eliminating your tax debt is simply making the decision to take action. If you are tired of having the IRS constantly breathing down your neck and wondering if you will have the funds to get through another week, contact the skilled Santa Clarita debt settlement attorneys at Financial Recovery Law today. Having helped countless individuals and businesses overcome their debt since 2001, we are equipped with the knowledge and skills to help you come clean with the IRS and move towards a debt-free future. From getting current on your tax returns, collecting documents, negotiating with the IRS, and exploring all debt relief options available to you, we can ensure your rights are protected and help you achieve much needed peace of mind once again.