Financial problems can be extremely stressful. If you owe back taxes, the pressure only worsens with mounting IRS penalties and interest accruing on your tax debt. Eventually, you might have aggressive collection actions pursued against you: the IRS can redirect your wages, take money directly from your bank accounts, and even seize your property.
But there is no need to let things go this far. Whether you are an individual or a small business owner, tax resolution services can defend you against the IRS. Our experienced IRS-enrolled agents help you navigate the complexities of the US tax code to find favorable solutions, get the IRS off your back, and save thousands of dollars on your taxes.
Will I Go to Jail for Unpaid Taxes to the IRS?
The threat of imprisonment weighs heavily on the minds of anyone with unpaid taxes. In 2022, the Internal Revenue Service launched 2,550 criminal investigations with a 90% conviction rate.
Those taxpayers found guilty of tax fraud or tax evasion face five years behind bars and must repay every cent owed, plus severe fines. But fraud and evasion are not the same as unpaid taxes, which might be due to financial difficulties or an honest mistake.
When You Do Not Need To Fear Criminal Charges
It’s important to separate civil IRS penalties from criminal penalties. If you’ve been filing your tax returns in good faith, but you made a calculation error, or you haven’t paid because you simply don’t have the money, then you have little risk of facing jail time.
The IRS will fine you and put pressure on you to pay back taxes. They might offset a tax refund, use wage garnishment, which diverts a portion of your wages to the IRS or issue federal tax liens and levies, which allow them to seize your money and property. But these are all civil penalties. Financial hardship and human error aren’t illegal, and the IRS is very unlikely to instigate a criminal investigation when no criminal intent was demonstrated.
What Constitutes Tax Liability-Related Crime
Fear of prosecution is more warranted when a taxpayer has intentionally committed tax fraud or evasion. This includes having multiple years of unfiled tax returns, destroying or hiding financial records, falsifying invoices, lying during an audit, and various other activities designed to misrepresent taxable income and evade paying taxes in full. These are considered criminal acts.
Does the IRS Allow Payment Plans for Tax Resolution?
For anyone facing IRS tax debt, the good news is you can set up a payment plan provided that you meet certain eligibility requirements. For many, a payment plan is a perfect solution to their tax problems. Smaller monthly payments are easier to manage than a single lump sum, bringing the situation back under your control.
And as long as you keep up with your monthly payments, the IRS won’t dip into your wages, savings, or property without permission. They will, however, keep charging fines and interest until the tax liability balance is paid in full. Our tax lawyer can provide tax relief services to help you find your best option.
Timeframes for IRS Payment Plans
If you have less than $100,000 owed in total tax, interest, and fines combined, then you are eligible for a short-term payment plan. Short-term plans last less than 120 days and have no setup fees.
Taxpayers with under $50,000 owed are eligible for long-term plans, which last over 120 days and up to 72 months. You can negotiate to arrange the optimal monthly payment and plan duration for your financial situation.
Have a Tax Lawyer Negotiate Your Installment Agreement
When negotiating without professional guidance, most taxpayers agree to a payment plan that puts a heavy burden on their monthly finances. Rather than resolve the situation, a bad payment plan fee structure can sometimes make problems even worse. Without knowledge of tax laws, most people are unaware of how much leeway they have for negotiation.
It’s far better to have an experienced tax attorney negotiate tax resolution for you. They can push for the absolute minimum monthly payment amount. This can make all the difference to your quality of life over the coming months and years.
How Tax Relief Services Can Help You
Given the enormous complexity of the US tax code, dealing directly with the IRS can be intimidating and overwhelming for self-employed individuals and small business owners alike. But there’s no need to face the IRS alone. An experienced tax lawyer can permanently resolve your tax problems and save you thousands of dollars via penalty waivers, tax relief programs, offers in compromise, and an overall effective IRS tax strategy.
Whether you need help resolving unpaid back taxes, reducing your fines, working out a complex payroll tax issue, finding IRS tax relief programs, negotiating offers in compromise, planning and filing your tax returns, or resolving any other kind of tax problem, our tax attorneys can handle it for you. The following are some common issues a qualified tax professional can help you resolve:
Remove Pesky Tax Debt Penalties
It’s a pleasant surprise for many to learn that you can sometimes get rid of IRS tax penalties without paying them. With a good tax resolution firm by your side, there’s a chance of qualifying for a tax penalty waiver. Enrolled agents can gather the requisite documents, draft a compelling argument, and negotiate for you to receive one of two types of waiver.
First-Time Penalty Waiver
Whatever your tax problem, everyone’s entitled to one mistake. If granted, this first-time penalty waiver dismisses the oldest of your penalties, granting you a clean (or cleaner) slate. This first-time waiver only applies if you had no other penalties in the three years preceding the relevant penalty.
Waiver for Reasonable Cause
If you can show that you exercised ordinary prudence and care but were still unable to file your return or pay your taxes, then you can receive a penalty waiver for reasonable cause. Occasionally taxpayers experience state tax issues, unfiled returns, or another tax situation because of natural disasters, civil disturbances, fires, or something else outside of their control.
Strong Candidates Only
Be forewarned that while analyzing your tax case for penalty abatement, your tax attorney must first determine whether or not you’re a suitable candidate. Successfully receiving a waiver is by no means guaranteed. And it’s unwise to trust any IRS tax resolution services that promise otherwise.
Avoid Wage Garnishment and Levies
When the IRS issues a Notice of Levy, you must act quickly to protect yourself. A levy allows the IRS to pay your tax debt by seizing a portion of your wages, bank account balances, social security benefits, or physical property, including business equipment. If a levy is carried out, you might wake up one morning to find your bank account emptied: this happens more often than you’d like to think.
Just 21 Days to Request a Levy Release
Receiving a Notice of Levy can be nerve-wracking, embarrassing, and hugely disruptive to your life. Once the initial notice is received, you have only 21 days to request a release of levy. It’s best to have a tax lawyer negotiate this for you. Better yet, have your enrolled agent prevent a levy from being issued against you in the first place by securing a collection hold.
Appeal Federal Tax Liens on Your Property
When the IRS places a federal tax lien on your property, they gain a priority claim on your house and other assets. All other creditors are notified that they no longer have priority on the collection of any such debt collateral with you.
In doing so, a lien damages your creditworthiness, as creditors are less likely to trust you again. It also disrupts any house purchases that might be in progress.
Just 30 Days To Appeal a Lien
Liens are notoriously difficult to remove once enacted. The key is to prevent them with an appeal but, once again, you must act quickly. After receiving the notice, a taxpayer has only 30 days to file a Collection Due Process Hearing Request. To successfully appeal a tax-related lien, you’ll need an IRS-enrolled agent with a deep understanding of your legal rights in this matter.
Resolve Complex Problems With Payroll Taxes
Some of the most complex IRS problems to iron out are payroll-related tax issues. IRS officers take payroll tax cases very seriously and pursue collection aggressively.
A business-owning taxpayer can fall afoul of the IRS by failing to file or make payroll tax deposits and payments by the 15th of each month. This results in heavy fines that can rapidly accumulate. In addition to unfiled returns, you will also run into trouble for failing to withhold tax from your employee wages, failing to issue a quarterly IRS Form 1099 for subcontractors, and incorrectly reclassifying employees as subcontractors.
Don’t Tackle a Payroll Tax Problem Alone
Digging your business out of an existing payroll-related tax situation can be an uphill struggle. In fact, it’s one of the hardest tax resolution issues to handle alone. It’s best to hire a tax attorney who understands small business cash flow and has a great deal of experience resolving similar payroll tax issues.
Gain Currently Not Collectible Status
With the help of tax relief services, someone with IRS tax debt can often gain a period of respite from collection enforcement activity. Your tax relief options include the right to request Collection Not Collectible (CNC) status, which typically lasts for one year.
While penalties and interest will continue to accrue during this period, there won’t be any wage garnishments, levies, or seizure of your assets. In some cases, this might be enough to save your home or business.
Gain Breathing Space To Recover
CNC status is only permissible for those who can prove they can’t currently pay their IRS tax debt: they either have no income or their gross income doesn’t exceed their allowable expenses. If you’re eligible, CNC status can provide invaluable breathing space while you get your finances in order.
Reduce Tax Debts With an Offer in Compromise
Under certain conditions, tax resolution involves acquiring an Offer in Compromise from the IRS. This means you’re legally exempt from paying your total tax debt: a wonderful boon for many struggling taxpayers.
Before granting an Offer in Compromise, the IRS will first need to see that your IRS tax debts are greater than your reasonable ability to pay. They might also allow it when there’s a genuine dispute as to the correct tax debt owed, when a full repayment would cause you undue economic hardship, or when it would be unfair and overly harsh for some other exceptional circumstance.
Choose the Right IRS Tax Resolution Services Law Firm to Help
Rather than applying for an Offer in Compromise alone, it’s wise to hire a law firm offering IRS tax resolution services that know the ins and outs of the offer process and understands how IRS Offer Examiners review each application. Also, ensure that your attorney has a proven track record and a high acceptance rate with client applications.