It can be a very stressful situation for a taxpayer to owe taxes to the IRS or the Franchise Tax Board (for California income taxes). They are big with nearly unlimited resources to track you down and make you pay. It is your legal right to arrange your affairs to pay the least amount of taxes. In fact the government offers many incentives to help you reduce your taxes such as retirement funds, interest on your home loan and student savings accounts. However, if you have been assessed taxes resulting in a balance owing, the IRS will come after you in short order. Here you need the help of a tax professionala tax attorney or CPA.
These are some of the options:
Payment Plans. This is a negotiated plan with the IRS and/or the Franchise Tax Board. Basically a monthly payment plan is arranged for the outstanding balance. The taxpayer makes the monthly payments until the tax debt is paid off. During the payment plan period (which can last several years), the taxpayer must pay their current taxes due in a timely manner. For corporations or those who are self employed that means making the quarterly payments on time.
Offer in Compromise. An offer in compromise could be an option providing the taxpayer qualifies. If the offer in compromise is accepted by the IRS, it could substantially reduce the amount of the taxes owing, in the expectation that the smaller balance is paid. One of the conditions is that the taxpayer guarantees that they will pay their taxes for the next five years. Despite the hype on the TV ads, a taxpayer must qualify for this IRS tax debt reduction program. To qualify the taxpayer must demonstrate an inability to pay the outstanding balance due to exceptional circumstances such as a death in the family, divorce or long term unemployment.
Wage Garnishment. The IRS has the authority to lien your assets or garnishee your wages. An employer cannot discriminate against you if a garnishee notice is issuedbut may not think highly of you. Basically the garnishee order requires the employer to make an additional payroll deduction off the taxpayers wages and pay the IRS directly. A tax professional can get the garnishee lifted by working out alternate resolution to the tax owing.
IRS Tax Debt Relief is available but the taxpayer must take action or the collection action will accelerate quickly.
John Spurgeon is a tax attorney in Pasadena, California servicing clients in the greater Los Angeles area. John Spurgeon & Associates, who are both tax attorneys and CPAs, have the proven knowledge to effectively deal with the IRS and the Franchise Tax Board. Please call 626-440-9518 for a complimentary initial consultation.
About John Spurgeon & Associates
John Spurgeon & Associates is a professional services firm located in Pasadena, California with a focus on tax law and related accounting services. They have extensive experience with federal and state income taxes, payroll taxes and sales taxes. They represent business, non-profits and individuals against the IRS and the Franchise Tax Board (California State Taxes). As both tax attorneys and Certified Public Accountants they offer a broad range of tax related services.
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