Large Sums of Back Taxes Can Be Overwhelming, But They Don’t Have To Be
In many cases, we can negotiate with the IRS and settle for less than you owe and/or set up a partial pay installment agreement. To make this happen, we will file paperwork, talk with IRS employees on the phone, and attend in-person meetings if requested by the IRS.
The experienced tax attorneys at Wiggam Law advise and represent clients through settlement negotiations to achieve the maximum tax debt relief for each individual.
Offer in Compromise
If you have a large outstanding tax debt and have not filed for bankruptcy, you might be eligible to settle for a lower payment amount by entering into an Offer in Compromise (OIC) with the IRS.
An OIC is an offer to compromise with the IRS on the amount of back taxes you are capable of paying. The IRS will ask you to prove that either you cannot pay all of your back taxes or by paying the entire amount you would be put in financial hardship.
During the negotiation and investigation process, the IRS will look at your ability to pay, as well as annual income, expenses, and net equity in assets.
You must be:
- Up-To-Date on Past Returns
- Current on Quarterly Estimated Payments
- Financially Solvent Enough to Pay Future Taxes for the Next Five Years
The OIC settlement process involves not only an application with substantial backup, but also an IRS investigation into your finances that can last several months to a year. You may be required to file Form 433-A for individuals or 433-B for businesses, or the OIC version of either of these forms.
If you’ve recently had an offer rejected, we can help you appeal the rejection as well.
To learn more about the OIC process and whether you may be eligible for an OIC, download our free digital resource, “Demystifying the Offer in Compromise: Understanding the Frequently Misunderstood Tax Liability Solution:”
Bankruptcy
Another way to lower or completely discharge back taxes is to file bankruptcy.
In a Chapter 13 bankruptcy setting, your IRS debt is reviewed in bankruptcy court along with other debts. In most cases, you will negotiate a payment plan.
Depending on the facts and circumstances of your case as well as the age of your tax debt, you could end up with a discharge of certain federal back taxes. Inclusion of tax debt in a Chapter 13 bankruptcy discussion is not automatic.
You must have met certain IRS criteria as well as continue to file tax returns and pay current taxes due during the bankruptcy period.
If filing Chapter 7 bankruptcy, total discharge of back income taxes as well as interest and penalties is more likely, provided you meet certain IRS criteria.
Partial Pay Installment Agreement
In a Partial Pay Installment Agreement with the IRS, a taxpayer negotiates a lower overall tax debt to be paid in installments.
As with an OIC, the IRS looks at your finances and equity in assets, and requires past returns to be filed and estimated payments made. The IRS wants a complete picture of your finances to ensure you cannot pay your entire tax debt, but will be able to make your payments. The investigation and negotiation process can take several months to a year.
We Help Negotiate With the IRS. Schedule a Consultation With Our Attorneys in Atlanta, GA
If you’re dealing with IRS collections, notices like the CP503, or are facing wage garnishments, bank levies, or seizures, it is best to act quickly and hire an experienced tax attorney as soon as possible. We can help you apply for the settlement options noted above, or if you can’t afford to pay anything at all, we can help you file the forms to request currently not collectible status.
Our team will develop a proactive solution, with the goal of stopping the wage garnishment or levy or having it released as soon as possible. We are dedicated to protecting your interests and want to help keep your money where it belongs – with you.
Contact Wiggam Law to talk with an experienced tax lawyer.