Frequently Asked Questions

1. What can I do if I can't pay my taxes? - Face the problem and get organized. Figure out and write down which tax returns are not filed and how much you owe, year-by-year. The most important thing is to STOP accruing taxes every year. Correct the withholding on your paycheck or if you are self-employed start making your Estimated Tax Payments every month instead of quarterly. It does no good to find a resolution to your back taxes and accrue more unpaid taxes in the future. Then you can think about a solution for the unpaid taxes. (1) Can you borrow any money on your home or other assets? (2) After your monthly living expenses, how much can you afford to pay in a monthly installment agreement toward what you owe? (3) If that will take more than five years, can you obtain a large significant amount (about 24 times your monthly payment from above) to attempt an Offer in Compromise? (4) If all or a large amount of what you owe is over three years old, would you consider using bankruptcy to eliminate the amount that is over three years old? (5) If you are in a true financial hardship situation, and can pay nothing per month, would delaying any payment for one, two or more years help? For a total amount over $20,000 seriously consider professional help from an experienced and licensed tax resolution specialist.
2. If I owe taxes, can I lose my job? Home? Car? - Technically you cannot be fired if you owe taxes or your employer receives a levy on your income. If you have enough equity in your home, or any real estate, you must try to borrow as much as you can to pay towards your tax liability.
3. If I owe back taxes, can I make monthly payments? - Yes. As stated above it depends on your monthly income versus your monthly necessary living expenses.
4. If I haven't filed tax returns for several years, what should I do? - - Get the tax returns prepared as soon as possible. Total what you owe, add 35% for penalties and interest, then see number one above.
5. Can the IRS find me? - Yes.
6. Am I responsible for taxes my spouse owes? - If you filed a joint tax return, generally yes. If your spouse hid income from you and the IRS, you may not be liable for the taxes as an Innocent Spouse.
7. Can I negotiate with the IRS myself? - Yes, but is it the smart thing to do? Do you have the ability to negotiate one of the first four solutions in number one above?
8. My wages have been attached, what can I do? - Stay calm. A wage levy can be released. First, write down your monthly income versus your necessary living expenses. Second, you need to know what expenses the IRS allows and which they do not. Third, devise one of the solutions in number one above. Finally , present the above to the IRS. But, before you make that call to the IRS, ask yourself, "do I have the ability to negotiate with a tax collector that does collections for a living?" If you ask someone who has been doing this kind of work for more than 40 years, the answer is definitely no.
9. Can I settle my taxes for less than I owe? - Yes, with an Offer in Compromise. However, the IRS accepted about 31,000 Offers in Compromise in 2013. That is about 620 per state. Does that sound like an easy process to navigate successfully? Definitely find an experienced and licensed tax resolution professional who can explain the process so you can understand it. If a salesman makes an Offer in Compromise sound mystical or like a slam dunk, find another professional that will be honest with you.
10. If I owe taxes, can I go to jail? - Only if the non-payment was with criminal intent or fraudulent. When in doubt, find a professional that can evaluate your situation and explain your options.
11. How does bankruptcy affect my taxes? - If your tax debt is over three years old from the due date or extended due date of each year, there was no fraud involved and the tax returns were filed over two years ago, bankruptcy may be used to eliminate or reduce those taxes. But, bankruptcy of taxes requires an experienced tax professional and a bankruptcy attorney.
12. What is my best plan of action? - Do the items in number one above, then sit down and talk with an experienced and licensed tax resolution specialist. You will now be in a position to decide if you should go at it alone or hire a professional to handle your tax problem correctly.

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