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Yes, too often, people ignore their tax problems because the situation is so overwhelming and finding the answers to questions from the IRS isn’t very easy. In many cases the largest portion of a delinquent tax bill is the penalties and interest that accrue. Penalties and interest add up quickly and can make it impossible to pay the full debt, creating a viscous cycle and more serious tax problem.

Our tax experts at Franskoviak Tax Solutions have over 20 years’ experience representing clients and negotiating with the IRS to secure abatement of penalties and interest, reducing any further charges that would otherwise occur.

In most cases the reduction that we negotiate with the IRS is substantially less than what is owed (see some of our case studies), so taxpayers are able to afford our representation and are happy to pay such a decrease in taxes owed.

Also, the process generally takes some time. Usually months and often up to a year. During this time the taxpayer is not continually accruing fees and penalties, so it gives the taxpayer more time to save and get back on top of the situation.

In addition, If you are a low income taxpayer who cannot afford professional tax assistance or if you speak English as a second language (ESL) and need help understanding your taxpayer rights and responsibilities, you may qualify for help from an LITC that provides assistance for free or for a nominal charge. The LITCs are generally operated by nonprofit organizations or academic institutions.

1. Installment Agreement: A monthly payment plan, that fits your budget, can be established to pay off the IRS.
2. Offer in Compromise: This is one of the most common solutions for paying off debt and tax problems. The Offer in Compromise program is when you settle your tax debt for less than what you owe. It generally requires making a lump sum payment or sometimes includes a short-term payment plan to pay off the IRS at a much-reduced rate.
3. Not Currently Collectible: This is a program where the IRS agrees to postpone the collection process for a year or so. This happens in cases when a taxpayer has no ability to pay his or her tax debts. This option is useful because it gives you time to file for a collection appeal to stop an IRS levy, lien or seizure.
4. Release Wage Garnishments: When you owe the IRS money the IRS can levy your wages, salary, or federal payments until the levy is released, your tax debt has been fully paid off, or the time expires for legally collecting the tax. The “Release Wage Garnishment” gives you the opportunity to bargain for a release or modification to the garnishment if you don’t have enough money to survive with the levy.
5. Stop the IRS from Levying Your Bank Account: The IRS can issue a bank levy to take your cash from your bank accounts to collect back taxes. When the IRS levies a bank account, the bank is required to remove whatever amount is available in your account that day (up to the amount of the IRS levy) and send it to the IRS in 21 days unless notified otherwise by the IRS.
6. Innocent Spouse Relief: If you happen to inherit your spouse’s IRS tax problems, you can dispute it. If you can prove that your circumstances fit within the IRS guidelines for innocent spouse tax relief, you can defend yourself against any liabilities of your spouse or ex-spouse.
7. File Bankruptcy: Income tax debts may be eligible for dismissal under Chapter 7 or Chapter 13 of the Bankruptcy Code. Filing for bankruptcy is one of five ways to resolve tax problems. Chapter 7 provides for full discharge of allowable debts. Chapter 13 provides a payment plan to repay some debts, with the remainder of debts discharged.

These are the most common solutions for dealing with IRS Tax Problems. We offer a free consultation in which we help you identify which option is the best for you.