Owe Back Taxes

1. Hardship Settlements. The inability to pay your taxes at the current time. Cases usually go into a 3 year suspended status because of an inability to pay. This is also called currently non collectible. Your case will go into a hardship status because you do not have the income coming in to meet your current expenses. The IRS will use the National Standards Program to assess hardship. IRS will require a detailed financial statement with supporting documentation to support your hardship condition on your back taxes.
2. Payment Agreements, Installment Agreements or Payment Plans –  Cases can be closed with agreed upon monthly installment payments to the IRS. We will review the different programs the IRS uses for the lowest possible amount required. Depending on the dollar amounts IRS has programs fitting all needs on back taxes.
3. IRS Offer in Compromise. There are three types of OICs:
   The IRS may accept an Offer in Compromise based on three grounds:
   • Doubt as to Collectibility – Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection.
   • Doubt to Liability – The IRS incorrectly set up a tax liability again you.
   • Effective Tax Administration / Exceptional Circumstances – There is no doubt that the tax is correct and there is potential to collect the full amount of the tax owed, but an exceptional circumstance exists that would allow the IRS to consider an OIC. To be eligible for compromise on this basis, a taxpayer must demonstrate that the collection of the tax  would create an economic hardship or would be unfair and inequitable.
4. The Filing of a Bankruptcy – Yes taxes can be discharged in a Bankruptcy proceeding. There are some basic rules in order to have your taxes discharged.
   The general rules that govern dischargeability are:
   • the taxes must be three years or older
   • the return(s) must be filed for at least two years
   • the returns must be assessed for at least 240 days
5. The running of a statute of limitations.
   • Each taxpayer’s case is very different and many different events could have occurred during the statute period. As a general rule, the statute of limitation period is ten years from the date of assessment. It is best to have a true tax professional pull a transcript and conduct a detailed research to determine the correct statute period.

IRS policies can be complicated and burdensome, but with the proper knowledge these policies can be easily navigated. If you owe back taxes to the IRS call us today for a free tax consultation.