Tax Debt Resolution Services

Unpaid taxes can raise a host of problems for taxpayers.  In some instances, taxpayers can even have their bank accounts levied upon.  This, of course, leads to countless other problems as funds that were counted on are used to pay for back taxes.  A qualified professional can assist taxpayers find a solution that fits their specific circumstances. When it comes to settling tax debts, our services fall into two areas.

1. Consulting with and representing clients before the IRS with respect to technical tax issues. Often, a technical issue or potential tax liability may arise from an audit or other activity initiated by the IRS.

2. After technical issues have been determined, the taxpayer enters into a collection process if he or she doesn’t immediately pay the tax liability. There are a variety of procedural protections that are provided to taxpayers during the collection process. With respect to tax debt resolution services, typically, our clients typically employ one of four solutions.

Uncollectable Debt

First, for those clients with minimal assets who are able to demonstrate sufficient financial hardship, the IRS may designate an account as uncollectable.

Installment Agreements

For those who cannot resolve their tax debt immediately, an installment agreement can be a reasonable payment option. Installment agreements allow for the full payment of the tax debt in smaller, more manageable amounts. Keep in mind that these payments may include interest and penalty charges. Sometimes the Internal Revenue Service will compromise some portion of these extra charges. You should consult with a knowledgeable tax attorney first, as they may be able to negotiate the tax debt and assist you in receiving lower payments.

Offers in Compromise

The IRS Offer in Compromise (OIC) program was established by the U.S. Congress to help taxpayers who have experienced significant financial problems to get a fresh start, if they qualify. Back tax liabilities, penalties and interest can be settled. All federal tax liens can be released once the IRS accepts the OIC and the negotiated settlement amount is paid.

Bankruptcy

Sometimes a bankruptcy filing can help solve tax debt. For bankruptcy to be a successful solution, tax returns generally must have been filed at least two years prior to the bankruptcy filing. Also, it is important to note that some tax liabilities cannot be discharged. In particular, taxes withheld from employers referred to trust fund taxes, may be assessed against those responsible to withhold and pay those taxes to the federal government. Such liabilities cannot be discharged in bankruptcy. You must satisfy a variety of technical rules in order to use bankruptcy to eliminate tax debt. For general information about bankruptcy practice, please visit our Bankruptcy site.

Otto S. Shill, III is an Arizona Tax Attorney with over 25 years of experience assisting clients with tax-debt resolution.