If you owe taxes to the IRS or State, you are probably pretty scared. If you have gotten very far in the collection process, you may have had your bank account or pay check taken. You may also have liens placed against your house, car, other property or even your business. Those levies and garnishments can make it almost impossible to live, so you really need to get relief immediately.
PENNIES ON THE DOLLAR?
You have almost certainly seen those television ads promising to get the IRS to settle for five or ten cents on the dollar of debt. If you checked into them, you probably know that those wonderful deals aren’t so easy to come by. Although there is often a hefty fee you will have to pay to get potential help started, there is usually no guarantee that you will get any of your fees back if the deal doesn’t work out.
DO THOSE DEALS REALLY WORK?
Some people do qualify for payment of pennies on the dollar. However, there are very specific rules that have to be met. Those tax reduction offers usually take a year or more to get answers, and the person has to jump through some major hoops for at least the next five years in order to finalize the offer. The problem is that the IRS and other tax agencies have a simple rule—the laws say plainly that if you owe tax and can pay it from your assets and monthly income, they must collect the money in full. The IRS and many other agencies have specific calculations which you must meet before they can consider a tax compromise reduction or payment plan.
OTHER PAYMENT ARRANGEMENTS
However, there are several other approaches that may work. If you know how to work with the agency rules, these other plans are often much easier and faster to arrange. Remember that the IRS does not want to destroy you or put you out on the street. Their goal is just to collect the money you owe in some reasonable way. If you lose your business, home or job, or if you have a nervous breakdown, nobody wins, including the government!
Monthly payments or short time delays usually can be worked out to allow you to get through the debt payment process. If your financial condition is bad enough, the IRS may even suspend collection of your debt for a while until your situation improves. However, you must know your rights, understand what to ask for and be able to show the tax collector a workable plan.
Any payment amount must be small enough to allow you to keep your taxes current and take care of your family. If your taxes get behind again, the IRS can and usually will CANCEL THE ARRANGEMENT AND DEMAND IMMEDIATE PAYMENT.
Let’s discuss your problem before it gets worse.
If you need help dealing with the IRS or other agencies, don’t wait for things to get worse than they are already. We are Enrolled Agents licensed to represent you before the Internal Revenue Service, Arizona, and many other agencies. We know what rules and plans might work to help you arrange an agreement. Give us a call and make an appointment to discuss your situation.