21 Ways to Resolve IRS Tax Debts

1) Amended tax returns may need to be filed to correct amounts originally miscalculated or to change the amount billed by IRS for tax returns that they filed on behalf of an entity or individual(s) for not filing timely.

2) Request an Installment Agreement. The IRS has several types of installment agreements that an Employer may qualify for to pay payroll debts. However, you must file any unfiled tax returns, initiate payroll tax deposits if still operating with employees and most likely provide financial statements according to the types of entity.

3) Missing payments? These can be resolved by providing copies of checks, money orders or other financial instruments utilized to pay. Copies of front and back of these need to be sent requesting payment tracers. In addition, if you used the electronic system, send copies of the electronic information you entered to make the payment.

4) Filing Bankruptcy will not discharge payroll tax debts. It may allow for time to pay with a bankruptcy repayment plan. However, elimination of all payroll tax debt is not feasible. Especially, for sole proprietors.

For other types of entities, Officers, partners, limited partners and others can be held personally liable for unpaid payroll debts.

5) Request for financial hardship closure. Only if you can prove that you and your business are not able to currently pay the debt. Financial documentation is required according to business entity type. In addition, keep in mind that penalties and interest keep on accruing. This type of case closure does not stop investigation of personal liability against officers, partners, others who had the financial obligation and responsibility to pay an entities payroll debt.

6) Tax liens can be negotiated for release, withdrawal, non-attachment, subordination, discharge if the situation merits it.

7) Notices of levy (garnishments) can be negotiated for release or partial release.

8) Seek business or personal loans from family, friends or financial

Institutions. Note: SBA loans cannot be utilized to pay tax debts.

9) Collateral Agreements may also be an avenue to delay immediate full payment demands.

10) Factoring your business accounts receivables may be used as collateral to seek loans to pay down or full pay tax debts.

11) Officers, partners, limited partners and others can use personal assets to loan money to an entity to negotiate or resolve tax debts. Especially, payroll debts when they can find themselves personally liable anyway.

12) There are 3 different types of offers in compromise.

Offer in Compromise option is feasible. However, it depends on the type of entity, equity in assets, future income potential and more. Compliance with filing and paying requirements must be meet and all avenues for paying down or resolving the debt must be shown to have been attempted. For example, loans from shareholders, officers, sole proprietor equity in assets etc. Minimum two loan denial letters from financial institutions are requested by IRS. Doubt as to Liability offer may be a solution as well.

13) Closing a debtor business maybe the only option when tax liabilities cannot be paid or negotiated due to no equity in assets, little equity or possibility of payment and not being able to keep current with payroll deposits and even estimated tax payments for sole proprietors and general partners. Then, other options must be considered to resolve the debt according to type of entity as explained above.

14) Filing an assignment for the benefit of creditors can also be an option. In this scenario all assets are liquidated, and money paid according to the lien priority of creditors.

15) Selling a business to pay off tax debts can be an option to get out of payroll debts. Lien issues can be resolved with lien discharge process. Seek tax professional advice.

16) Selling other assets owned to resolve payroll debts is the best way to negotiate or resolve payroll debts. If you do not sell them or seek loans. The IRS will seize and sell them once ownership is verified, equity amount determined, and seizure requirements are meet.

17) Pension plans owned by a sole proprietor, Ownership interest in other entities and stock, licensing agreements, trademarks, copyrights collectibles, and more can be utilized to resolve tax debts.

18) Innocent Spouse, Equitable Relief, or Separation of Liability options.

19) Collection Statute of Limitations. Yes, the IRS has 10 years to collect a tax debt. However, this time-frame starts from the date the tax bill was created not the tax year involved. Keep in mind the IRS can pursue a suit to reduce tax claims to judgement to add another 10 years to the collection statute if an investigation reveals potential ability to collect. Usually when people place assets out of the reach of the government.

20) Audit Reconsideration for prior audits that caused a liability and qualify for such option. Especially, when notices of audit were issued to incorrect address or new evidence to prove incorrect tax bill may adjust the original audit amounts in favor of the taxpayer.

21) Filing a suit for failure on the part of the IRS to issue collection due process rights, unlawful seizure of assets, and other tax court filings according to the case issues. Seek Tax Attorney assistance for these types of problems. Only an Attorney or U.S. Tax Court authorized, licensed person can represent you on these types of cases.

As indicated above there can be several options for resolving tax debts. Seek professional assistance from the right tax professional for tax audits and debts. Not all Tax Attorneys, CPA, or Enrolled Agents know or want to represent with tax audits or debts.

Remember that tax professionals vary according to their selected expertise. Some are tax return-preparers, some represent with audit cases and others know and are licensed to represent entities with tax debt problems.

No Notary or other business professional can represent before tax collection. Only a Tax Attorney, CPA or Enrolled Agent.

Do your own interviewing and vetting of tax resolution people or companies that make promises and charge a lot of money to represent tax debtors.

Especially, if they do not answer the question as to who is going to represent you from their firm and get it in writing.

You can request to see their license to prove that they are authorized to represent entities with tax problems. Do not allow them to use the Tax resolution company Centralized Authorization File number or CAF#. Seek the CAF# from the person who is going to be assigned your case.

Go to www.advocatetaxgroup.com for free resources.

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