There are various programs that IRS offers to resolve and settle your IRS tax debt of you Owe Back Tax Debt.
As a former IRS agent and teaching instructor with IRS , more attention is given to taxpayers who owe larger sums to the IRS.
IRS takes a closer look at all cases large dollar especially the financial statements, the IRS is looking for the ability of the taxpayer to pay the back tax. As a former IRS agent this was part of my job.
One of the first tasks of IRS is to make sure all back tax returns are filed and current in the system.
IRS will not close out any open taxpayer inventory case unless all back tax returns are filed and the taxpayer is current on estimated tax payments or their withholding is up-to-date.
IRS is a stickler on this because they don’t want the problem of the back tax debt recurring.
So how will IRS work your case?
The Internal Revenue Service will ask the taxpayer to fill out an IRS form 433A.
You can find that on our site or on the government site. IRS will expect that form to be fully completed fully documented along with copies of the last six months bank statements, copies of all monthly expenditures,bills and a copy of pay stubs.
IRS will conduct a thorough review on that financial statement.
After this review of the financial statement the Internal Revenue Service generally has various buckets of closing programs that the taxpayer can be put into as a result of their current financial statement.
The importance of filling out your financial statement and giving it to IRS is the key to success and failure. I could never tell you how important the financial statement as it will determine outcome with Internal Revenue Service.
Currently uncollectible or hardship cases
If the Internal Revenue Service looks at your current financial statement and determines that your expenses exceed your income and you fall within the necessary means test, IRS can place your case in this non-collectible status.
There is good news and bad news within the status.
The good news is IRS will probably suspend your case between one and three years and kick it out for review a couple of years later, the bad news is the penalties and interest still run and the debt gets larger. It is real important that the taxpayer understands the national standards program that IRS will be using and how it affects her case.
Installment agreements or monthly payments
If after the Internal Revenue Service looks at your current financial statement and they determine that you have more income than the necessary standards of meeting tests, IRS will ask for a monthly payment based on that financial statement. Hiring a tax professional can assure that IRS does not grab more money than necessary on or review of your financial statement. There are different monthly installment agreements and we will review with you your options upon your free consultation. remember, it is the job of the IRS to get as much money they can on a monthly basis.
Offer in compromise.
This is called the pennies on a dollar program that you see advertised on TV however the offer in compromise is not for everyone.
I am a former IRS agent and teacher of the offer in compromise.
Approximately 32,000 taxpayers a year can settle their debt for pennies on the dollar, the average settlement is $9500 a year and I caution and warn taxpayers who submit offers in compromise to go through the IRS pre-qualifier tool to find out if they can truly settle their tax debt. It is always best to walk to the IRS pre-qualifier tool to make sure you’re a certified candidate for this program. Never file an offer unless you walk through this program
As a former IRS agent I carefully will walk through your financial statement and if you have any chance of being accepted for the offer I will walk you through the program and submit the offer in compromise.
Statute of limitations
IRS has 10 years to collect on their back tax debt, the period starts from the date of the assessment. The date of the assessment is the time that IRS had to put your case on the computer at the start the billing process. Various factors will extend the statute such as bankruptcy, the filing of the CDP, or the filing of offer but as a general rule after the 10 year date of assessment date your case goes away by federal statute,
Yes, Bankruptcy, many taxpayers are unaware that you could file a bankruptcy, a chapter 7 the discharger debt. As a general rule the taxes have to be three years or older, assessed for more than 240 days and the tax returns have to be filed for at least two years. there are also different chapters in bankruptcy such as an 11 and 13 that a taxpayer can be qualified by speaking to a true bankruptcy expert.
When you call our office we will walk you through the various programs after review of your current financial statement.
Please keep in mind that you owe over $50,000 the IRS spends a little more time in research in looking at your case.
Many agents will Google your company business or individual self, they will pull up search engine reports to find out about assets or financial histories, check out insurance policies, courthouse records, and credit reports, before they make a determination.
The credit card companies are an excellent source to run down assets, loans and find out monthly payments that you were making.
Call us for a free initial tax consultation and we will walk you through the process of dealing with the Internal Revenue Service.