UNPAID TAX DEBTS
It
may not be your fault, but the IRS doesn't care (but WE do!)
You may not have been able to avoid the
tax debt you owe, but you are still responsible. Tax bills can pile up and
interest and penalties accumulate quickly. Worse yet, the IRS has the most
powerful collection power in the country. They can take the money out of
your bank account or collect their due from your paycheck before you even
get it.
The Six Ways to Get Rid of Tax
debt
Pay It! –
Whether you agree or not, once the tax is assessed, you owe it. The IRS will
be happy to collect from anywhere it sees fit if you don't pay. If the debt
was during a period when you were married but you aren't any longer, the IRS
can and will collect from either party, regardless of what the divorce
decree states (they aren't party to a private agreement). So the easiest way
to stop the penalties and interest is to simply pay the bill.
Negotiate a
Lower Amount – Sometimes you can't pay the tax man. You don't
have the amount they need and you won't ever be able to pay it. That's OK,
because we can help you get a compromise for your tax debt. You settle with
the IRS for less than what you owe. In order to qualify, you'll have to show
you can't (or shouldn't) pay. You can either settle with a lump-sum amount
or an amount paid over a few years. Because this is a complex area, it is
highly recommended that you don't try this yourself, unless you are good at
doing root canals on yourself.
Pay It Over Time
(Payment Plan) – the most common solution for most
tax debts is to set up an installment plan where you can pay off your debt
over time. Like many of the solutions here, this one involves some rules and
sacrifice. The IRS will not settle for an amount unless it can be shown that
the debt can be paid off in a reasonable time. So don't expect to pay only
$150 a month if you owe $25,000, because that won't even cover the interest
and penalties. In addition, you will be REQUIRED to pay all other new taxes
timely.
File Bankruptcy
-- Filing bankruptcy can permanently remove some of your old tax debts.
However, taxes less than 2 years old generally cannot be dismissed in
bankruptcy. Due to the more stringent bankruptcy laws now in effect, you may
still have to pay a portion of the debt even within the protection of a
bankruptcy. Bankruptcy also has other effects outside the tax world, so it's
something you'll need to discuss with an attorney before you take this
route.
Ignore the
Debt -- It'll just go away! -- OK, so you think I'm kidding
about this one? I'm not. But it must be used with great caution. If you have
filed a tax return but don't pay the tax owed, you committed no crime. The
IRS has a specified period of time to collect the tax, known as the "statute
of limitations." Once this time period is up, the IRS no longer has the
power to collect. The catch here is that first, you have to have filed a tax
return, and second, you have to be aware that the IRS will file liens and
levies to seize your property if you don't pay. Those liens are in effect
for a minimum of 10 years unless you settle up with the IRS. But there are
some situations where this can actually work in favor of a taxpayer.
Be
Temporarily Broke -- Sometimes you just don't have any money
to pay the IRS. But the IRS' definition of "broke" is probably different
than yours. The IRS allows you to buy food, have money for transportation to
work, and to pay your rent or a basic house note. Everything else is
considered "luxuries" that come after IRS tax payments. This includes
tuition, daycare, and cable TV, and even payments on houses that are above
the average cost for your city. But if you qualify, the IRS will not try to
collect any money for a year. After that time, the IRS will require you to
prove you still can't pay them before they let you slide for another period.
What WBTax Can Do To
Help
Our specialists understand how the IRS
works. When you hire us, the first thing we will do is stop you from getting
those pesky phone calls. All IRS communications will go through our office.
Second, we will work with you to
determine your financial situation and determine the tax debt. Sometimes,
the IRS tries to collect more taxes than are due. We will make sure you only
owe the RIGHT amount of tax in the first place.
Third, we'll determine which of the six
strategies makes the most sense for you. Unlike our competitors, we don't
tell everyone to file an Offer In Compromise, which can be very expensive
and not a good solution for you. If an Offer in Compromise is right for you,
we'll tell you all the steps to make it make it work.
Don't fall for false claims! Watch out
for "OIC mills". These are companies that push the Offer In Compromise to
anyone with a tax debt bigger than $10,000. The success rate (those cases
that are accepted by the IRS) are rather small for the larger national
firms, such as J.K. Harris or Taxmasters, or Roni Deutch. For some of these
companies, less than 15% of their cases are settled satisfactorily. The IRS
is actively hunting these OIC mills down for promising unrealistic
expectations. Typically, if a firm handles more than a few cases at a time,
they are too big for you.
WBTax and its representatives have
handled OIC cases for over 15 years. Our lifetime batting average is success
in more than 93% of cases we handle. Our biggest tax savings include a $1.1
Million debt settled for $5,000 flat, and a case in 2009 where we settled
over a half million in debt for just over 5 cents on the dollar. These are
unusual cases, but most cases we settle are for less than 50 cents on the
dollar. We typically handle no ore than a few cases at any one time, so you
can be sure that we are on top of your case.
Contact
our experienced team of
tax professionals to
have a confidential
evaluation of your case
at NO CHARGE. Call us at
800-473-3863. Even the
phone call is free.
