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How to solve any IRS problem
IRS problems have a way of ruining all aspects of your life. They take a toll on you financially, emotionally, and physically. You can never really run away from them because they always come back each morning when you wake up! When you owe the IRS money, you’re always wondering if today might be the day that the IRS shows up at work, your home, or your business; or if today might be the day the IRS decides to levy your bank account or garnish your paycheck. This is a heavy load to bear every day! Listen! The only way to solve your IRS problems is to face them head-on and to have a PLAN OF ACTION. No more procrastinating. No more delaying, and no more pretending that the problem doesn’t exist! This may sound blunt. But if you do nothing about your IRS problems, that’s exactly what will happen- NOTHING!
Don’t face the IRS alone
As you read the information on this website, you will begin to feel a sense of relief knowing that there is a way of out of your IRS problems. Just imagine what it would be like to wake up every morning knowing that the IRS is finally out of your life. You no longer have to worry about what the IRS might do next to collect what you owe. How about a good night’s sleep for a change, knowing that the IRS will no longer be able to threaten you and take everything that you’ve worked so hard for? This is what you want, isn’t it?
But before anything else, here’s a WORD OF WARNING: Almost 30 million taxpayers are suffering from IRS problems. So, you are not alone, although it might feel like that at times.
If you are one of the millions of people who are in debt to the IRS and a tax lien has been filed against you or your property, note that a recorded lien is a matter of public record. So, there is a good chance that you are now being bombarded with all kinds of marketing materials from different companies offering you their services.
How Most People Get In Trouble With the IRS
Where did your tax problems come from? Trouble with the IRS can start in a number of ways. From experience, I have seen that most people do not intentionally avoid filing returns or paying taxes. In most cases, it starts with a difficult or challenging life event that leads to tax problems as a side effect:
1. Under withholding of taxes
A lot of people live paycheck to paycheck and struggle to survive. To take home more money, they adjust tax deductions from their paycheck resulting in under withholding of taxes. They hope that by the end of the year, they would have saved enough money to pay taxes due when they get their tax returns done. Unfortunately, this always creates problems at year-end when they realize that they in fact don’t have the money to pay the IRS. Sometimes, this can go on for years and the liabilities start to pile up to an astronomical amount. FACT: The IRS is one of the worst creditors you can have! If you don’t have enough taxes being taken out of your paycheck, make sure you understand that the IRS will get their money one way or another- it’s just a matter of time. Pay now or later.
2. Divorce
Going through a divorce is difficult enough for most people. Add tax problems to the mix and things get much worse. Taxes may result from receiving alimony payments, the sell of assets resulting in taxable gain or the change in filing status from married to single while losing some of the previous exemptions. If the parties are hostile to each other, tax returns may be filed late or never filed because one party withholds or destroys business and tax records needed for filing.
3. Business Cash Flow Problems
When a business is struggling to stay alive and money is short, a lot of owners are tempted to pay their employees their net payroll and not send the IRS the money withheld from the employees’ paychecks. They hope that “once business gets better”, they can just catch up on their payroll taxes. So, they think that in the meantime, they can use IRS money to continue operating their business. This gets out of control very quickly. To make things worse, the failure to turn over the taxes to the IRS results in huge penalties which further bury the business in tax debt. If the business fails to pay the taxes, the IRS threatens to shut the business down and will pursue collection against the owner personally.
All of the above are just samples of situations which can lead to serious IRS tax problems. I’d like to point out that HAVING IRS TAX PROBLEMS DOES NOT MAKE YOU A BAD PERSON, even though sometimes they can simply be a result of bad judgment or poor financial planning. The first step to solving your IRS tax problems is simply to acknowledge the problem- and to realize that YOU ALONE can decide that it’s time to get the IRS out of your life. The first step is to seek an experienced professional who can lead you through the IRS maze in the most cost-effective and efficient way possible.
Taxpayers Beware!
In case you are not aware, there are a lot of unscrupulous companies out there who hire salespeople to try to get you to fork out your hard-earned dollars while making you promises that sound to good to be true (because they often are!). Most of these people are unlicensed and are not even qualified to give you legal advice. Without knowing anything about your situation, they will tell you right away that you can settle with the IRS “for pennies on the dollar”.
While it is true that tax debts can sometimes be drastically reduced in negotiating with the IRS, there is a specific formula that the IRS uses in making this determination and it is not based on some set percentage of what you owe. I will go back to this later. But for now, I just want you to be aware that there are a lot of predators out there who want to take advantage of other people’s unfortunate situation.
OK, let’s cut to the chase... I know your time is valuable and so is mine, and so I will not waste either. You may not have heard this before, but the truth is that EVERY IRS PROBLEM HAS A SOLUTION.
That’s right! It’s possible to solve ANY IRS problem including yours but let me be candid in saying that what will work best in a given situation is not necessarily the option that the taxpayer WANTS TO ACCEPT.
Let me explain. Generally, IRS problems fall under one of 2 categories:
You are behind on filing some tax returns and/or
You have an outstanding bill from the IRS that you can’t pay.
If you have one or several un-filed tax returns, the first thing that you need to do is to get caught up. There is no way around this. Keep in mind that if you’re not even caught up on all your filings, as far as the IRS is concerned, you have not made enough effort to get back on track with the IRS so why should they even talk to you? Filing late returns shows good faith on your part. How can you find a solution if you don’t even know what exactly you’re dealing with? Filing all required returns should be your first step to determine your total tax liabilities.
I was at a loss and had no hope. Attorney Ray saved me from owing over $40,000 with the IRS. I only ended up paying $1,000 and my debt was gone. Everyone was very helpful, kind and most importantly understanding. This was one of the best decisions of my life
— Sue S.
Find out what the IRS knows about you
If you are so far behind that you don’t even know what returns you’re missing, it’s a good idea to obtain your tax transcripts from the IRS. Call them and ask them to send you a record for all the years in question. If you’re in doubt what tax years or periods are in question, it may be a good idea to ask for more years or more periods to make sure you get it all.
Once you have your IRS transcripts, you will be able to see your history of filed returns, payments made, any liens filed, etc. Obviously, if you owe the IRS money, the transcripts also show how much you owe for what tax year. Don’t stress over it for now. The goal in getting your transcripts is to find out what the IRS has on you so that you know exactly what you have to deal with in getting your tax problems resolved.
Explore your best resolution options
Once you’re caught up on all your filings and you now know exactly how much you owe the IRS, what’s next? Here are some possible solutions:
1. Reduce the tax liability by doing an Offer in Compromise
This is the infamous “pennies on the dollar” program you may have heard about. Under this program, the IRS may accept less than what you owe as payment in full.
This program has rigid qualification criteria, and most taxpayers simply do not qualify- As I stated earlier, don’t be fooled by a salesman on the phone guaranteeing you that you will qualify for this option.
Now, if you do qualify for this option, here’s the good news: How much less will the IRS settle for? Usually, A LOT LESS but it all depends on your income, expenses, and your assets. The less income and assets you have, the better.
Once the IRS agrees to the settlement, your IRS nightmare is over, and you get your life back provided that you don’t make the same mistakes that got you into tax trouble in the first place.
I would like to add that in the event that you do not qualify for an Offer in Compromise, it may still be possible to drastically reduce what you owe by asking for a “penalty abatement”. This means asking the IRS to cancel all the penalties.
Did you know that as much as 60% of your tax debt could be penalties that the IRS has added to the original tax amount? I know this sounds ridiculous but it’s true. The IRS has specific grounds on which you may file an application to get penalty relief and if your application is granted, you can get the overall amount of your tax debt reduced.
2. Negotiate a payment plan (Installment Agreement)
The most common resolution option, this allows you to make affordable monthly payments to the IRS to pay back taxes. These payment plans can have variable payments based on seasonal income if necessary. In some cases, you may not even have to pay back the entire amount you owe, but simply make payments until the statute of limitations expires on the debt (This is called a “partial payment installment agreement”).
3. Have the taxes declared “uncollectible”)
If you lack the financial resources to repay your tax debt, it may be possible to get your tax accounts into an uncollectible status. The IRS will review your situation periodically to see if your financial situation improves. This status can last for one or more years, and the IRS will leave you alone while you remain in this status.
4. File bankruptcy to wipe out some or all of the taxes owed
In some cases, personal income tax can be discharged or wiped out in a Chapter 7 bankruptcy. To be eligible for a bankruptcy wipeout of taxes owed, there are 3 GENERAL rules (there might be others depending on your situation): (a) The income taxes in question are at least 3 years old as of the date of the bankruptcy filing (b) Tax returns were timely filed by you or if not, it should have been at least 2 years since they were filed, and (c) The taxes should not have been assessed in the last 240 days.
These are the basic rules to obtain a discharge of the taxes owed. However, to get a court determination that the above requirements are satisfied, you can file an adversary proceeding in bankruptcy court to let the judge review your taxes.
In other cases where taxes cannot be wiped out in Chapter 7, they can be paid through a Chapter 13 repayment plan. In Chapter 13, the penalties and (often the interest as well) will stop accruing on the date of filing and in a lot of cases, the amount owed can be reduced.
To find out whether or not bankruptcy is a good option for your situation, you need to speak with a knowledgeable and experienced bankruptcy attorney who can explain this to you in more detail (I’ve been a bankruptcy attorney with more than 22 years under my belt and so yes, you can talk to me!).
5. Pay the IRS the entire amount
This option is pretty straightforward. If you have the money, why not just pay the IRS and get them out of your life? People with substantial assets or income normally do not qualify for any of the other options so this may be the only thing they can do to make the IRS leave them alone.
For those who have no assets or income, sometimes they can borrow the money to just pay the IRS in full so they will often refinance their mortgage, borrow against their retirement plan or get a loan from friends or family. If I were to guess, most likely you don’t fall under this category.
6. Do nothing
You can’t “squeeze blood out of a stone” as the saying goes, so if you own nothing and don’t even have a job, you may be tempted to just ignore your IRS problems since you are what they call “judgment proof”. However, if you have a job, a business, a bank account, a home, or any other assets, doing nothing means that IRS can just have its way with you and take whatever you have. I am sure this is not the kind of life you want to live!
Having IRS problems gets old
OK, there you have it- a short summary about the usual options that people have when dealing with IRS problems. Of course, every case is different so there is no “one size fits all” solution. But chances are that your situation will fall under one of the above scenarios.
You just have to find out which one is best for you so that you can get the IRS out of your life! See, there can be no real rest and relaxation until your IRS problem is completely solved. It’s hard to keep a good job or get your credit report cleaned up when the IRS continues to issue federal tax liens and wage levies. Without a bank account, it’s difficult to cash your checks or even pay your utility bills. Even if you’re lucky enough to have a bank account, you always have to worry about the IRS wiping out all of your money without notice. Some taxpayers with IRS problems have nothing but a few assets they want to hang on to… and then the IRS pulls out all the stops by seizing everything that they can. Do not underestimate any IRS employee’s ability to follow through on the threat of seizure.
Don’t ignore the IRS
Imagine the IRS attacking your pension, retirement or social security checks.
The IRS leaves no stone unturned in its never-ending quest to collect all taxes, penalties and interest. Sure, people think the IRS can’t or won’t levy retirement funds. They hope that when they get old, the IRS will forget about them and how much they owe the IRS.
Trust me: The IRS never forgets!
They just keep adding penalties to what you owe each day until they find you, your money, or your income source. Then it’s payday for the IRS!
Taxpayers with IRS problems can never build up retirement funds or assets!
You’ll always be looking over your shoulder for the IRS. This usually means you have to work until you die. You’ll have no opportunity to save up for the days when you can’t or don’t want to work anymore.
There is no end in sight! You just get up every morning with this incredibly large problem on your shoulders. Most people around you don’t know what you’re going through. You just keep going but you know in your heart that doing nothing about your IRS problems is not going to make them go away.
How to get out of your IRS problems?
Your next step is to DECIDE to end your IRS problems. You need to pick a day (TODAY is a good day) when you decide that enough is enough and that you are going to finally do something about your IRS problems.
Our firm specializes in ending the misery of IRS and other debt problems! As I discussed above, there are many possible ways to end your problems, but they all require that you take the first step.
No one can help you until you decide to help yourself.
We will do all the talking to the IRS. We also handle all the meetings and communications with the IRS. If you have some un-filed tax returns, we will advise you to file old tax returns to get you in current compliance with the IRS. As I already explained above, the IRS will not negotiate with anyone unless they are current with all required filings.
Once all your old tax returns are filed, then the IRS will at least listen. If you qualify, we will help you cut a deal to pay less than what you owe. And in case you don’t qualify for an “Offer in Compromise”, we will see if you can at least have the IRS reduce the penalties.
What the IRS is Looking For: It’s all in the Numbers
Most people have the mistaken notion that in order to pay the least amount of taxes owed to the IRS, all they have to do is to “negotiate” effectively after making an offer. My office gets a lot of calls from people saying: “Can I just file an Offer-In-Compromise and pay the IRS cents on the dollar since I don’t have the full amount that they want me to pay?”
No, it doesn’t work that way. In reviewing any potential solution that you present to the IRS, the first thing they look at is your RCP. What’s that? RCP stands for “reasonable collection potential”.
Your RCP consists of 2 factors: net equity in assets and future income. These 2 factors combined is the basis for calculating how much the IRS can collect from you. How does that work? To simplify, the IRS looks at the fair market value of everything that you own plus whatever cash you have available from your income after deducting what you need to survive (monthly budget) using the IRS’s own guidelines for living expenses. The key to success is understanding the formula used by the IRS in making its calculations. Unless extended, the IRS has 10 years from the date of assessment to collect. That means that as time goes on and as your taxes get closer to the 10-year mark, the IRS’ ability to collect diminishes and the IRS knows this. Thus, your RCP also depends on how much time the IRS has left under the 10-year collection statute. When you hire a tax professional, most of the work done will be focused on figuring out your RCP because this is exactly what the IRS will be looking at in reviewing whatever solution you would be proposing to get your tax problems resolved. BEWARE of tax resolution companies who promise to get your taxes resolved for “pennies on the dollar” before they have even had a chance to do a thorough analysis of your RCP. Most of these companies lure unsuspecting taxpayers with empty promises that they cannot deliver. BE VERY CAREFUL.
Why do I need an attorney?
The laws have changed over the years—there are laws to protect taxpayers nowadays. Years ago, you were just at the mercy of the IRS. But now you have a chance to get your life back.
You could opt to represent yourself before the IRS. Some people do go that route. But representing yourself before the IRS is like going to court without a lawyer. I wouldn’t recommend that. Or you can hire someone that knows all the ins-and-outs and navigates the IRS maze on a daily basis. You can hire someone who knows how to protect you and your rights. Once you take that first big step and decide you are done with sleepless nights, you need to make the second biggest decision—Hire a competent professional who cares about you and is an expert taking on the IRS.
What could be better than not having the IRS stalking and harassing you with letters, phone calls and appearances at your front door? You might wonder how we do that. Once you sign a Power of Attorney, a document that says we are representing you, they are not allowed to contact you directly any longer. Just like that, you are free from the nightmare of being harassed! The next calls we make are to release the Bank Levies and Wage Garnishments against you. Again, you may be wondering how it is possible for us to do that. See, when the IRS knows that an experienced, competent tax resolution attorney is working on your case, they know you are serious about resolving your tax problems. We are like an armored shield protecting you. We are the tax resolution “boots-on-the-ground” battalion. We do all the talking to the IRS; we handle all of the phone calls, correspondence, meetings, and negotiations, so you don’t have to!
Call our office today to set up an appointment for a FREE Consultation.
“I had a great experience with RJB Law Offices. Everyone I spoke with was very nice and professional. They were able to answer all my questions and pointed me to the right direction. I’m looking forward to my new beginning with their help.”
— Jose S.
What do we need to do in order to move forward?
With a FREE CONSULTATION regarding your IRS situation, we will be able to pinpoint the best direction for the resolution of your case. We will discuss things such as:
Do you have any verbal or written agreements with the IRS?
Do you have a Revenue Officer? If yes, are they aggressive or unusually demanding?
Are there any current deadlines for information or money due?
Have there been any IRS threats of levies, wage garnishments, or seizures?
What was the date and title of your last letter received from the IRS?
Have you paid your current quarter Federal Tax Deposits on time and in full?
Do you have any unfiled tax returns?
Get your life back now!
As already pointed out, some people don’t even know what returns need to be filed or what they really owe. Their personal or business bookkeeping and recordkeeping is a mess or non-existent. After we register our Power of Attorney with the IRS, the second step we take is to get all your IRS tax records from the IRS to see where you stand. After that, with your help, we prepare all your delinquent income tax returns and get them filed with IRS. And lastly, we negotiate the best possible resolution that permanently resolves your IRS difficulties. That may mean doing an Offer in Compromise, a properly structured Payment Plan, Currently Not Collectible Status, Penalty Reduction and more.
Most of this takes place without you ever coming to our offices. We live in a day and age where technology makes it easy for us to represent you no matter where you reside.
Believe it or not, there are new laws that have gone into effect to help financially- strapped taxpayer’s today. The IRS announced their “Fresh Start Initiative” many years ago which allows more taxpayers than ever before to settle up with the agency. Now is the time to take advantage of these less stringent, more flexible programs before the IRS changes its mind again.
Call our office today to set up an appointment for a FREE Consultation.
Offer in Compromise: The BIG Deal
Everything mentioned here: The Power of Attorney, getting your tax transcripts from the IRS, and filing all your back taxes- this is all in preparation for the Big Deal—we want to see if you are qualified for the IRS’s Offer and Compromise program—that’s where you pay the IRS less than you owe. Usually, A LOT less than you owe! That’s right there are ways to negotiate with the IRS with the opportunity to reduce your tax debt, penalties, and interest substantially.
But as already explained, the IRS won’t negotiate with us, or help you, if you don’t have all your legally required income tax returns filed. And it’s not like the IRS has gotten nicer—it’s because they want to collect something even if you don’t have anything! They would much rather give you a break than collect nothing. BUT—they always try to get as much as they can first. The IRS’s Offer in Compromise (or “settlement program” as it’s more commonly known) is complex, time consuming, tedious and requires someone knowledgeable enough to call the IRS’s bluff when they’re not following their own rules and regulations and want you to pay a much higher amount than you should. You need an expert that knows how to preserve your rights!
We help people reduce the amount they owe the IRS including getting penalties and interest removed. When I say settle, I mean completely- 100%! Once the IRS has accepted the amount you offer and you pay the reduced amount, then the IRS releases all Federal Tax Liens. Your IRS nightmare is over, and you get your life back.
And even if you don’t qualify for an offer in compromise, we still might be able to help you reduce the penalties and set up a payment plan that you can afford and get the IRS off your back.
Contact us.
It’s now up to you! Call and schedule a FREE CONSULTATION and we can go over all the ways we can help you. All matters discussed will be strictly confidential. The consultation is FREE, so you have nothing to lose. This could be a big turning point in your life for you to get rid of your IRS tax problems once and for all. This is what you want, isn’t it?
Call our office today to set up an appointment for a FREE Consultation.
Disclaimer: Financial Recovery Law is a law firm but we are NOT your attorney until you have retained our services. Therefore, information on this website is for informational purposes only and should not be relied upon as legal advice. You can request a free tax analysis by calling our office at 866-477-7772.