At Ashley F. Morgan Law, PC, we help individuals and small business owners get relief from all types of State and Federal tax problems.
Here at Ashley F. Morgan Law, PC we help clients manage many different types of debt; one of the most difficult types of debt for most individuals to handle is tax debt. Owing any money to the Internal Revenue Service (IRS) or any state taxing agency, such as the Commonwealth of Virginia, can be stressful. Government entities have certain rights to collect on back taxes that other creditors do not have. For example, the IRS can garnish all or nearly all of your paychecks and can put a lien on any of your property (personal property or real property) without going through the court system.
If you do have tax debt, the team at Ashley F. Morgan Law, PC can help you figure out what options you have available. There are many factors that we consider when reviewing your situation, including: the type of tax debt you have, the age of the tax debt, your income, your assets, other additional debts, etc. Having an attorney negotiate and represent you with the taxing authorities can help ensure you have an advocate who understands the process. We can clearly explain the pros and cons to your options, while also walking you through the required steps.
Some of the available options include:
Installment Agreements – Negotiate a low monthly payment plan to pay back the tax debt over the course of multiple years. These agreements can either be set up on manual payments, direct debit from your bank account or from a payroll deduction from your employer. Straightforward as it may seem, the IRS will attempt to get a higher monthly payment than what is required by their guidelines. We know the guidelines and can help make sure you get the lowest monthly payment available to your situation.
Financial Statements – When the liability is too much to pay back in a standard Installment Agreement the IRS will require taxpayers to provide a financial statement to determine what the taxpayer can afford to pay. These statements are complex and should be handled by a professional to make sure taxpayers get the best agreement with the IRS as possible.
OIC – Offer in Compromise is the most complex resolution offered by the taxing authorities. This is because you are asking to settle your liabilities for a much lower number than you owe. The taxing authorities do not like to approve these agreements and taxpayers should have a professional by their side guiding them through all steps of the case.
There are three different situations where the IRS will consider accepting an offer in compromise.
Doubt as to Collectibility
Allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship
Doubt as to Liability
Applicable when doubt exists that the IRS assessed the correct amount of tax liability. This method only applies if you can prove you do not owe the tax assessed, not because you are unable to pay the tax liability
Effective Tax Administration (ETA)
An ETA offer is made when a taxpayer agrees with the delinquent tax amount that the IRS is seeking to collect and would be able to pay the full amount owed, but an exceptional circumstance exists that may cause the IRS to consider the taxpayer’s offer. To be eligible for compromise on this basis, you must demonstrate that the collection of the tax would create an economic hardship or would be unfair and inequitable.
If you already have the IRS or taxing authority taking aggressive measures please call our office. Levies can attach to your personal property, most frequently bank accounts. If acted on quickly enough it is possible to save your bank account before all the funds get submitted to the taxing agency. Garnishments against your pay can be hassle for everyone involved, including your employer. Please contact our office to go over what is needed in order for us to help you get that garnishment removed as quickly as possible.
Knowing exactly what types of options are available to you is the first step in getting your tax situation fixed. Please contact our office to set up a free consultation to go over your situation. Do not hesitate as the taxing authorities are not.