Tax Debt Solutions

So, you owe $100,000, maybe $1,000,000. What are your options to resolve this once and for all?

Step 1: File Tax Returns

First, make sure all your returns are filed. Federal wants six years of returns, and each state has different rules and requirements.

Get help! You haven’t filed for years, although you have good intentions, so don’t think that your preparing the returns is a viable option. Find a tax lawyer, a CPA, or an Enrolled Agent who is familiar with how to file old returns.

Not all preparers are experienced in that area, so find someone who does tax “representation” work.

Avoid Losing Social Security Benefits

In addition, if you haven’t filed tax returns, you risk getting no Social Security benefits or lesser benefits. Many of our Offer in Compromise applicants are age 50 and above, hoping to one day retire and maximize their Social Security benefits.

Step 2: Resolve Tax Debt

Once the returns are prepared, and filed, you’ll get bills from the taxing agencies. NOW WHAT DO YOU DO? Again, consider a professional who understands these strategies and which to apply when.

Option A: Offer In Compromise

Consider an Offer in Compromise (OIC) – a one to two year program, which settles the debt for an amount which you can afford to pay. At my firm, we vet our applicants very carefully. The application is like a complicated jigsaw of formulas and standards. We see if you qualify, and if not, go to plan B. Some Offer mills will take everyones’ money to do an OIC, even if it is going to fail! We carefully vet the likelihood of success.

Option B: Tax Installment Agreement

If that isn’t an option, consider an installment agreement, paying the debt over time.

Option C: Statute of Limitations

Is your Statute of Limitations running out? If you wait a few months or a year, will your debt go away?

Option D: Bankruptcy

If none of these are options, consider bankruptcy. That too is a complex jigsaw puzzle. Old returns must have been filed and processed by the IRS for two years prior to filing bankruptcy. Certain taxes aren’t dischargeable in bankruptcy, such as payroll taxes.

Option E: Ignore It

Continue to ignore it. Have money garnished from your wages or levied on your bank accounts. 

(We don’t recommend Option E.)