How Can I Resolve My Back Taxes with the IRS?

It can be scary to deal with the IRS, especially when you know you owe them money that you might not be able to pay. People often joke about getting audited by the IRS, or having them “come after you.” How many television sitcoms have we watched where they have audit interviews or bemoan the dreaded confrontation and the payment of taxes? But when it really happens to you, it is no laughing matter. It can be the cause of great anxiety and fear.

You have options if you find yourself owing the IRS back taxes. These options that can alleviate stress and fear, and we will discuss them here.  

If, after reading this article, you have additional questions about assistance with back taxes, we invite you to contact The Law Office of Mary King, P.L. We are IRS resolution attorneys in Sarasota Florida , and we are ready to provide you with quality legal advice on any individual tax issue. Call today at 941-906-7585 , or fill out our contact form.  We are here to help you. 

First and foremost, you need to determine how much you actually owe the IRS. You may have questions as to amounts, or as to interest and fees that charged you. Before you move on with paying the IRS, you want to verify that you pay no more than you are required to. Consider contacting an IRS resolution attorney in Florida for this.

Next, you should pull all your income and asset information together along with the amount owed, and determine what you can reasonably pay to the IRS for the back taxes. You do not want to agree to pay more than you can actually pay, because it will just cost you more in the long run if you default on an agreement.

Look at the amount you owe and determine if you can pay it in one lump sum or if you will need to make payments . Look at the options provided by the IRS, and see if a loan would be cheaper than a payment plan through the IRS. It all depends on interest rates, fees, and amounts owed, etc. This is another time when an IRS resolution attorney in Florida could help. You want to do what is best for you. You can take 120 days after the due date of the taxes owed to pay without any sort of formal request, although interest and fees will accrue during this time.   

The IRS started something called the Fresh Start program in 2008 to help taxpayers who owed them back taxes. They expanded this program in 2012 to help more people, and to assist them in shortening the amount of time it takes to pay off taxes and to reduce the number of tax liens.

The Fresh Start program can help you resolve back taxes owed to the IRS in several ways. One thing it did was raise the amount that has to be owed before they issue a tax lien. This way you can avoid that complication. Taxpayers have to owe at least $10,000 before a tax lien is issued and even then, once they pay it below that amount, they can request the lien be removed. Taxpayers can also have the lien removed even if they owe that amount when entering into different payment agreements.

An offer in compromise is when you request the IRS accept less than what you owe them . This is most helpful when you owe large sums of money and have no foreseeable way to pay it. When you ask the IRS to do this, they scrutinize your income and assets to make sure you really cannot pay them the amount owed in full or through a payment plan.  

The Fresh Start program set new guidelines for an offer in compromise which allows more people to qualify. Now, if you offer to pay off your debt in 5 months or less, the IRS will only look to one year of your future income to determine if you quality, and what amount they will accept. If you offer to pay the debt in 6 months to 24 months, they only look at 2 years of your future income when they used to consider 5 years of future income. These changes allow more people to qualify, and for a more reasonable amount. 

In order to get the IRS to accept your offer in compromise, you must put forth your desire for it, and give the reasons for your offer succinctly and in a persuasive manner that will encourage the IRS to accept your offer. This offer in compromise letter can make or break an agreement. This is best accomplished with the aid of an IRS resolution attorney in Florida.

Another way to pay off back taxes you owe to the IRS is through an installment agreement . If you meet certain requirements and owe less than $10,000, you can get this agreement fairly easily by applying online. This is considered a guaranteed installment agreement. 

Installment agreements were made easier for taxpayers through the Fresh Start program. The length of time of the installment agreement was increased from 60 months to 72 months, allowing a longer time to stretch the payments out so they are smaller and more affordable. There is a simplified process to apply for this and a more complicated process, depending on the amount owed. The Fresh Start program increased the threshold amount owed from $25,000 to $50,000 for the simple process. If you owe $50,000 or less and meet several qualifications, you can apply without providing much financial information to show that you need an installment agreement.

You wonder what option is best for you if you owe the IRS a large sum of money . Is it better to try to get the IRS to agree to an offer in compromise which would alleviate any more interest and fees, or to set up a payment plan? Do you have a tax debt and no scenario discussed above is a good resolution? It can be a complicated weighing of pros and cons and financial interests to make this decision. This is where an IRS resolution attorney in Florida can help. When dealing with the IRS and a large sum of money, it is always beneficial to have someone on your side. 

If you have questions back taxes, or if you are a business that needs to plan tax payments throughout the year, then you need the help of an attorney who has experience with tax planning attorney in Florida.  

The Law Office of Mary King P.L. can help you with all of your tax needs. We have experienced tax attorneys in Florida , and we offer complete services in all areas from tax implications of alimony to planning the most efficient tax strategy for individuals and businesses. We are proud of the experience and resources we have to provide to our clients.    

Call our tax attorneys in Florida today to schedule an initial consultation. With years of experience, the Law Office of Mary E. King can make sure that your tax issues are resolved in your favor. Fill out our online contact form , or call us at 941-906-7585.