Frequently Asked Questions
Do I need professional assistance for my back tax liability?
It depends. If you have the ability to immediately pay the tax liability in full, the liability is accurate, and you don’t have any extenuating circumstances which caused you to fall behind, it might make sense just to pay the debt off. If you are unable to pay the debt off quickly, you feel like you had extenuating circumstances or you believe the liability to be inaccurate, you should seek advice from a professional who is experienced in resolving back taxes. In many cases, an experienced tax pro can reduce the amount taxpayers will have to repay and/or help them avoid nasty consequences such as wage levies, bank levies, and the seizure of assets
Can my tax liability be reduced?
Some taxpayers qualify for an Offer in Compromise (a tax settlement), while others may qualify for an abatement (reduction/elimination) of penalties. Others qualify for a Partial Payment Installment Agreement, which technically does not reduce the debt, but can have the effect of having the taxpayer repay less than the full amount due. There is also something called Currently Not Collectable Status (CNC), in which the taxpayer pays nothing so long as he or she stays in CNC. Consult with a tax professional with experience dealing with back tax cases to see if you might qualify for any of the above.
What types of tax professionals can represent me with my back tax liability, and which type is best for my situation?
Enrolled Agents, CPAs, and attorneys have unlimited authorization to represent taxpayers before the IRS. Since resolving most tax collection cases has little to do with number crunching, and a lot to do with building and presenting a strong case, we believe that the skill set of an attorney experienced in handling tax collection cases is likely to procure better results.
Will the government garnish my paychecks, seize my bank accounts or seize other assets if I can’t pay off my tax debt right away?
It is possible, and maybe likely, depending upon the circumstances. Your best bet is to consult with a tax professional who is experienced in handling back tax cases. To get a better feel for the risk involved in your own situation, and to learn about methods of reducing or eliminating these risks, please call us for a consultation.
I own or work for a company that is behind with employment and/or sales taxes. Can the government pursue me and my personal assets?
Maybe. If you are an owner, officer, check signer or person with some control over the company’s financial decision-making, you may be at risk of being held personally liable. Consult with a tax professional experienced in dealing with back tax cases to see if you are at risk, and to see what can be done to reduce or eliminate that risk.
What is the difference between a lien and a levy?
A lien is a secured interest in an asset or assets. A Notice of Federal Tax Lien is a public record which notifies the world that a taxpayer owes taxes, and places a public claim against the assets of the taxpayer. A lien can affect a taxpayer’s credit, and can prevent the taxpayer from selling or transferring an asset subject to the lien. A levy is when the IRS actually takes an asset or assets from a delinquent taxpayer, whether it is the taxpayer’s wages, bank accounts, investment accounts, real estate or other assets