Tax Relief Services
Have you received a lien or wage garnishment? You may not owe as much as the IRS says you do. Don’t try to fight the IRS yourself when you can hire a team of tax practitioners and CPAs to represent you. Let one of our tax specialists help you today.
Do you feel like you’re in over your head when it comes to resolving your IRS debt? So many of us get behind on our taxes and never catch up. Going up against the IRS by yourself can be an intimidating and daunting task and there is no shame in looking for help with IRS debt. Few people use the resources that are readily available to assist them with their IRS debt. If left unchecked, your debt can cost you your wages, home, and assets. If you are struggling to find IRS debt relief, here are 10 helpful ways you can resolve your IRS debt and get back to financial stability.
Step 1: Consultation
Our experienced professionals will hear your case and provide you a free tax analysis discussing the best potential resolutions to your tax liability. We understand the pressure you face and how to turn your situation around, in order to protect your livelihood.
Step 2: Investigation
Our Investigation process begins by filing a Tax Authorization Information Form 8821 with the IRS and/or the appropriate form for the State Taxing authority on your behalf in order to obtain a complete record of your account. Upon completion, we will contact you to discuss the best way to address the problem.
Step 3: Resolution
The resolution phase of our process begins by gathering more in depth financial information and documentation in order to prepare an in depth proposal for submission to the IRS and/or State. Our team is here for you and our goal is to not only fix your tax issues, but to keep you tax debt free in the future.
What we offer (*expandable)
Offers In Compromise (OFC)
Taxpayers that are not currently in financial hardship, but may be very close to that threshold, may be able to qualify for an Offer In Compromise. This mostly applies to those who would be put into financial hardship if they added tax debt payments to their current list of expenses. In this situation, the IRS determines the maximum amount they would be able to get from a taxpayer without causing financial hardship. Then the remainder of the debt is forgiven and the individual is released from their liability as soon as the taxpayer meets the conditions of their agreement with the IRS. The IRS will factor in disposable income and any assets held by the taxpayer when making a determination for an offer in compromise. An offer in compromise can wipe the slate clean with the IRS for substantially less than what the taxpayer owes. Offers in Compromise are difficult to achieve, but offer a substantial benefit to struggling taxpayers if they qualify. CTR has tremendous experience in determining a taxpayer’s eligibility for an offer in compromise and also has tremendous success in negotiating our offers in compromise we submit for our clients.
Installment Agreements (IA)
The installment agreement is a method of tax debt resolution that allows an individual to pay off their balance over a period typically ranging from 6 months to ten years. Depending on the amount owed to the IRS or state tax agency, the period can vary. CTR determines the amount of each monthly payment based on the taxpayer’s personal assets, property and other financial information and negotiates with the IRS to achieve that payment. These agreements come in many forms to accommodate other financial obligations and the needs of the taxpayer while still satisfying IRS or state tax debt.
Stair Step Agreement
This form of Installment Agreement exists to allow taxpayers to finish payment on a large expense, such as a car loan or child support payments. This plan begins with a divided payment schedule in which the larger expense gets the main focus and small installments are collected on the unpaid tax balance. Once the outstanding balance on the initial expense is completed (usually within 12 months), the taxpayer switches the entire payment to the back taxes over the following 48-60 months. This program eases the stress of tax payments without causing other financial obligations to default.
Streamline Installment Agreement
This type of installment agreement comes with a couple of strict guidelines that determine an individual’s eligibility. There are some added benefits that make this program worthwhile, such as not having to disclose all of a taxpayer’s financial information to the federal or state tax agency. The assessed or actual tax balance owed must be less than or equal to $50,000. Additionally, the total balance, which includes accrued penalties and interest, must be paid to the IRS or state within a 60-72 month period. This arrangement is ideal for taxpayer’s with substantial assets or disposable income.
Partial Pay Installment Agreement
The PPIA is a bit more complicated to manage from a records perspective, but can save taxpayers a substantial amount on their tax balances. Taxpayers following this plan have to disclose all financial information and documents to the IRS to be accepted. CTR negotiates a hardship payment based off the taxpayer’s current financial information. This hardship payment is less than the monthly payment needed to satisfy the tax debt in full. The IRS has a 10-Year Statute of Limitations in which they can collect on past due tax debt. The PPIA payment will be made for the duration of that 10-year period, but will not pay the tax balance in full by the time the IRS can no longer collect on the tax debt.
Conditional Expense Installment Agreement
As one of the more accommodating agreements, the CIA allows taxpayers to continue paying a long-term monthly bill or expense(s) while still addressing their tax debt problems. Those that qualify for this agreement must have a steady payment schedule for something like a 401k program or a credit card that they are required to keep. The CIA usually lasts for 60 months and pays the debt in full. During this time, the individual is required to do three things: make payments to the IRS in the agreed amount, continue to pay their conditional expense(s) with submitted proof to the tax agency, and give the IRS any required financial documents or records. This program allows a taxpayer to continue their current lifestyle without disruption while also paying back their IRS debt in full.
Traditional Installment Agreement
This straight-forward payment method is a simple installment plan in which the taxpayer settles their entire tax debt over many payments. The amount is divided into monthly installments over the 10-Year Statute of Limitations and is based off of the taxpayer’s current financial situation. This program removes the stress of trying to make a full one-time payment and grants the taxpayer peace of mind. This program allows the taxpayer to pay-off their tax debt obligations over time without being at risk for a levy or wage garnishment.
Currently Not Collectible Status
Taxpayers that are struggling with financial hardship may be able to find a way to be completely relieved of their IRS debt. Currently Not Collectible Status removes the taxpayer’s tax balances from active collections with the IRS. A taxpayer provides documentation of their current financial condition, and if such documentation shows that the taxpayer cannot meet their basic obligations, let alone their tax liability, the IRS will declare a financial hardship. As the Statute of Limitations on a tax debt is 10 years, the individual must continually file their tax returns and provide any requested information to the IRS in a timely manner. Anytime a taxpayer receives a raise or has their income to expense ratio change such that they are no longer in financial hardship, they may lose their Currently Not Collectible Status. At this point, a new payment plan may be drawn up to settle the balance with the IRS based on the new financial situation in which the taxpayer finds themselves. The Currently Non Collectible Status allows taxpayers some relief while they try to improve their financial condition.
Penalties can quickly turn a tax debt situation from bad to worse. With our penalty abatement assistance, the added penalties to tax obligations may be removed. Remember, a penalty abatement only applies to penalties. The IRS does not currently abate interest. To accomplish a penalty abatement, an individual can submit proof that they missed payments or filing deadlines or other noncompliant behavior for uncontrollable reasons. In addition, they must show that they are working to rectify the problem by filing any missing forms or returns and paying the required balances.
Tax Debt Settlement Strategies
1. IRS Fresh Start
The IRS Fresh Start program can help you pay your taxes back over by allowing you to make payments over several years (up to 72 months). This way you can make monthly payments that are more affordable than large lump sums. If you qualify for the program, your payments will be based on your income, liquid assets, and how much you currently owe. Some other notable benefits of this program include avoiding additional interest, penalties, and wage garnishments. Taxpayers owing $50,000 or less may be able to get tax debt help through the Fresh Start program.
The IRS is more patient than you might think, and an installment agreement means they get a payment (that you can handle) each month. The IRS carries the weight of the federal government—meaning they know they have the power to collect indefinitely so they aren’t in a hurry. Another reason is that the longer you take to pay back the IRS the more penalties they can add to your already existing debt. An installment agreement can be a great way to pay back the IRS at a rate that you can afford.
There are strict qualification requirements, but there are ways to get your total debt with the IRS reduced. Typically the IRS will only accept a compromise if they can’t collect more by traditional means of forced collection. If you need to settle IRS debt, an offer in compromise is a great way to do it.
If you can prove to the IRS that you can’t pay your tax debt without dipping below the basic standards of living, you might qualify for this special program. This won’t resolve your debt but rather defer it for a year or two while you get back to a financial position that would allow you to pay back the IRS.
5. File for Bankruptcy
Under Chapter 13 and 7 of the tax code, income tax debts may be eligible for discharge. Chapter 7 will allow a full discharge of the sum of your allowable debts—while chapter 13 will allow for a payment plan to repay some of your debt while the rest is fully discharged. Contact a tax specialist for help with your IRS debt before filing for bankruptcy.
If your husband or wife fails to pay their taxes and you have a joint income account, you may be able to relieve yourself of any debt from the IRS. As long as you fit within the IRS guidelines, you may qualify for Innocent spouse relief. This can be a viable way to settle IRS debt.
Depending on the kind of debt you have with the IRS, you may be able to have all of your penalties removed. This is something you can ask for during a settlement or offer in compromise. Typically the IRS isn’t going to wipe away your penalties without something in return, but done correctly, this can be a great way to reduce IRS debt.
When you’re in debt with the IRS they can start taking a portion of your wages to get back what they’re owed. Usually, a levy against your wages won’t happen until after your accounts have been frozen and the assets within them confiscated. The IRS can take a portion of your paycheck directly from your employer each pay period. If this is happening to you, it might be time to negotiate IRS debt relief. If you can prove to the IRS that you don’t have the funds to meet the basic standards of living because of the levy, you may be able to have the garnishment lifted.
When you owe back taxes to the IRS one of the first things they will do is issue a notice to levy your bank accounts. 30 days after the final notice, the IRS will freeze your bank accounts. 22 days after the freeze, the IRS will take the funds that were frozen. These funds are nearly impossible to get back once they are taken. If you can, get your bank levy released before the bank hands over your funds—seek out a professional for help with IRS debt as soon as you receive your first notice from the IRS.
From the start of the initial assessment, the IRS has a 10-year window to collect all of the back taxes that you owe. If you ever wondered how to get out of IRS debt, this is a viable option. Waiting out the IRS isn’t going to be your best option in most cases. However, with the help of an experienced tax attorney or specialist, you may be able to plan out a way to wait out the IRS.
11. Lump Sum Payment
Paying back your taxes in one lump sum can be a great way to get rid of any penalties and potentially reduce the amount you have to pay the IRS. Paying back the IRS in one lump sum is going to save the IRS a lot of time and money on your case. It might be difficult to pay back what you owe all at once, asking a professional about help with your IRS debt can tell you if this is going to be the best option for solving your debt.
Working with a Professional to Settle Tax Debt
Falling behind on your taxes can have very serious consequences. If you need help with IRS debt, your best bet may be to turn to a professional. Why do you need to work with a professional? For starters, tax matters can be very complex, from wading through legal jargon to ensuring that you are submitting all of the right documentation—not to mention attempting to negotiate with the IRS.
Working with a tax expert to figure out how to settle your IRS debt can save you time and frustration, and even money if they are able to help you find a swift resolution before you accumulate more interest. This is especially the case with higher levels of debt.
Our tax professionals are extensively knowledgeable about the different tax-debt-repayment options that are currently available, and how to negotiate on your behalf for the best possible terms.
What to Look For
Unfortunately, there are many “tax settlement firms” out there that claim to help individuals figure out how to get rid of IRS debt. However, many times these are scams. That’s why it’s important to do your research into the tax firm that you’re considering and ensure that you are working with tax professionals that you can trust to serve your best interests.
When looking for professional tax debt help, you want to ensure that you work with a tax firm that is:
- Well-seasoned in tax debt resolution
- A tax expert who is passionate about helping clients
- Record of success for clients
Many fraudulent “tax debt resolution firms” will only offer debt resolution services. A legitimate tax firm will offer an array of services and have a team of experts who can help with all aspects of your taxes.
We meet all of the above qualifications and are well-poised to help with IRS debt, no matter how severe it is.
What to Expect
If you decide to work with us to resolve your tax debt, here is what you can expect:
- There will be a consultation where we will analyze your tax situation and propose your debt resolution options.
- We will begin the investigation. During this portion of the process, we will file a Tax Authorization Information Form (Form 8821) with the IRS on your behalf. This will allow us to have a complete record of your tax debt.
- Once we have a complete picture of the extent of your debt, we will make our recommendation for the best debt-settlement strategy.
- We will submit a debt resolution proposal to the IRS.
- Once we negotiate an agreement with the IRS on your behalf, we can help you put your repayment plan in motion. Then, all you need to do is follow through on your obligation to remain in good standing with tax authorities.
If you have a state tax debt you need resolved, the same general process can be followed to help you clear your debts.
If you need help with IRS debt or you need someone to negotiate on your behalf, we have a team of expert professionals who can help you resolve your IRS Tax problems quickly and efficiently. Don’t wait until the final notice from the IRS to seek out professional help for tax debt.