I am a former IRS agent and teaching instructor with the Internal Revenue Service.
I’ve been in practice since 1982 and I like to explore some of the ways you can reduce your IRS tax debt through various programs with Internal Revenue Service.
We are a local South Florida tax firm that’s been practicing since 1982.
We are an A+ rating by the Better Business Bureau in a work hundreds upon hundreds of cases right here in our home town South Florida.
I hope to provide a solid list for you of the different ways to reduce your IRS tax debt without going into laborious details that the average taxpayer could care less about so with that said, let’s rock ‘n’ roll.
Options to Settle Tax Debt From A Former IRS Agent
1. The first way to reduce your tax debt is to look at the actual tax return and find out if there was an error made on the return from the practitioner who prepared your return.
Most people assume their tax return is correct and that God dropped there tax practitioner down from heaven. While that person may be the most trusted and honest person in the world, there’s always somebody a little better.It never hurts to anybody to take a second look at your tax return. Its your money and you owe it to yourself.
My recommendation is to have another tax professional look at the last three years individual returns and business returns if necessary you can amend those back tax returns.
2. If you will owe some back taxes, you can always challenge some of the penalties that IRS applied on the debt.
I should say from the onset many of the penalties and interest are correct.
As a general rule, you can focus your attention on failure to file and failure to pay penalties. Those have the most success finding ways to reduce your tax bill. You can order an IRS tax transcript to find out what the penalties and interest are on your tax liability.
If you go to Michael D. Sullivan, Former IRS Agent homepage, scroll down on the left side you will find one of the most extensive sections on the Internet of abatement of penalties and interest.
Don’t assume your tax bill is correct, have an experienced practitioner review it to make sure the tax liability IRS is placing in front of you is true and correct.
3. Check out the statute of limitations.
Before you get too excited about the statute of limitations, understand that IRS has 10 years to collect the tax debt from the original tax assessment. The tax assessment starts when IRS has processed your tax return and placed it on their CADE2 computer system.
Keep in mind is not when the tax return was filed or when received a return BUT, put it onto their computer system.
As a general rule, the statute of limitations is 10 years.
Also be apprised that certain events extend the statute of limitations such as the filing of the offer in compromise, litigation, bankruptcy, filing a collection due process.
You can pull up an IRS transcript to find out when your statute is gonna run out.
IRS also has the option of extending your statute of limitations for various reasons. If the IRS is audited your tax return and create a secondary tax assessment, the 10 years from the new tax audit bill is created at that time.
4. The filing of a bankruptcy, generally a chapter 7.
Most taxpayers are not aware that a Chapter 7 bankruptcy can take away the tax debt completely when the rules are met.
The general rules are, the taxes must be three years or older, assessed for 240 days and filed for two years. You can contact an experienced bankruptcy attorney to see if chapter 7 works for you. keep in mind the chapter 7 does not discharge the lien but the tax debt.
5. The filing of an offer in compromise.
As a former IRS agent I work the offer in compromise program.
I accepted offers and I rejected offers. I am a national expert in the offer in compromise program.
There is a pre-qualifier tool to settle your debt through the offer in compromise. Rather than go through a laborious explanation of the offer in compromise program it’s best just to call us for an initial tax consultation to find out if you are a taxpayer who qualifies for this program.
Keep in mind the offer in compromise program is not for everybody.
IRS expects you to give them your complete liquidity and all your assets and live within normal means given your income and the living expense tests that IRS will give you.
The facts of the offer in compromise.
Last year 78,000 offers in compromise were filed and 38% of those got accepted for an average settlement of $9500.
Please keep in mind this is a national average and may have nothing to do with your settlement at all.
6. Putting your case put into currently not collectible or hardship.
Even though this is not a way to completely reduce your tax liability it can lead to a complete reduction in your tax bill if not reduce it forever.
The Internal Revenue Service places about 40% of their active collection cases and to what’s called a temporary hardship. Another name for this is currently not collectible.
Many of these cases that are placed in hardship eventually go away by statute.
The Internal Revenue Service will take a current financial statement with all associated documentation and make a determination whether to place your case and a payment agreement or currently not collectible. Basically IRS put your case on hold until it decides to review the case and bring it back to the field for another review.
For more details on currently not collectible cases call us today as the chances are high that eventually your case will go away by the ten year statute rule.
Once again I am a national expert in IRS collection matters.
If you have any questions call me today for free original tax consultation.
Reduce IRS Tax Debt + Ft.Lauderdale, Weston, Plantation, Parkland = Former IRS Agents + Since 1982