Proven Chandler IRS Tax Collection Lawyers Ready To Fight For You
The Internal Revenue Service (IRS) is the branch of the United States Department of the Treasury that is primarily responsible for assessing and collecting federal taxes. Most of us take care to diligently fill out our tax returns. However, each year, there are hundreds of thousands of well-intentioned taxpayers who are surprised to find out that they owe a significant amount of back taxes. To be sure, this is an unwelcome surprise. However, ignoring the problem will only make it worse. It could potentially lead to the IRS placing a federal tax lien on individual or business assets. They may even seize assets through an IRS tax levy.
At Kaczmarek & Jojola PLLC, our team of Chandler IRS tax collection attorneys is immediately available to help you address your outstanding tax issue head-on. We advise Chandler clients who are facing IRS collection efforts, helping them get back into compliance so they can move on with their life and put their tax worries behind them. As former senior trial attorneys with the IRS, our lawyers know how the IRS views collection cases. We can help you resolve your tax issues before things spiral out of control. Whether it be assisting you with an installment agreement or offer in compromise or challenging an IRS tax levy, we can help. Unlike many other Chandler IRS tax legal team who handle any type of case that comes through the door, we are certified tax specialists who only represent individuals and businesses in tax-related matters. At Kaczmarek & Jojola PLLC, we have your back.
The IRS Collection Process Explained
If a taxpayer does not pay their taxes in full when they file their return, the IRS will send a bill outlining the amount of taxes owed. This begins the IRS collection process. The IRS will not cease its efforts to collect tax debt until either
- The taxpayer satisfies their tax debt, or
- The IRS can no longer legally collect the tax.
The first letter the IRS sends out provides the taxpayer with the total amount of back taxes owed and demands payment in full. The total account balance includes all penalties and interest that accrued since the tax was due. The interest on the account compounds daily. The IRS also imposes a monthly late payment penalty. In some cases, depending on when the tax was due, interest and penalties can be significant. That being the case, Chandler taxpayers should promptly address IRS collection letters.
Of course, most taxpayers are surprised to find out that they owe back taxes and may not have the cash on hand to pay off the debt immediately. Despite the understandable temptation to ignore IRS collection letters, doing so only makes the situation worse. The IRS will not forget about an outstanding tax debt, and discarding collection letters will certainly lead to bigger problems down the road.
Collecting outstanding tax debt is an IRS priority, and the IRS takes the position that it should also be a taxpayer’s priority. Thus, according to the IRS, those who cannot pay should consider “liquidating assets such as bank accounts, financial investment accounts, cars, boats, real estate, life insurance, 401(k) plan, etc.” to pay their tax bill. The IRS also recommends taxpayers take out a loan to pay what they owe. However, there may be less drastic measures to address outstanding tax debt. At Kaczmarek & Jojola PLLC, our Chandler IRS tax collection lawyers implement creative and effective solutions to help clients get back into compliance after learning that they owe back taxes.
Chandler Tax Legal Team Negotiate with the IRS on Behalf of Individual and Business Clients
While the IRS assumes that paying tax debt is a taxpayer’s first priority, it also understands that not all taxpayers can immediately pay the entire balance owed. Thus, the IRS will allow some taxpayers to make payments periodically. Repayment plans fall into two categories: those that require complete payment of all taxes owed and those that allow taxpayers to settle their tax debt for less than the stated amount.
For individuals and businesses who can pay down their tax debt over time, the IRS will consider placing the account on a short-term or long-term payment plan. Short-term payment plans require a taxpayer to pay the total amount owed in 120 days or less. There are no application fees for an IRS short-term repayment plan. However, interest and penalties will continue to accrue until the taxpayer satisfies the total balance. Long-term repayment plans provide taxpayers more time to pay down their balance. However, the IRS imposes a fee, ranging between $31 and $149, when you apply for a long-term repayment plan.
Of course, many individuals fall into the large category of taxpayers who cannot afford to pay the entire balance due, even over time. In these situations, the IRS may consider either a partial payment installment agreement or an offer in compromise.
Partial Payment Installment Agreement
Qualifying taxpayers can request that the IRS place them on a partial payment installment agreement (PPIA). A PPIA is a contract between the taxpayer and the IRS. The terms of the contract require the taxpayer to make regular monthly payments to the IRS over a set period of time. The amount of the payments depends on the taxpayer’s ability to pay and the total amount of tax due. The IRS has the right to increase the payment amount if the taxpayer’s financial situation improves. However, if the taxpayer complies with the terms of the PPIA, the IRS forgives the remaining balance.
To qualify for a PPIA, a taxpayer must owe at least $10,000 in taxes and have filed all previous years’ tax returns. In addition, the taxpayer cannot currently be in bankruptcy and cannot have previously benefited from an offer in compromise.
Offer in Compromise
An offer in compromise is similar to a PPIA; however, there are crucial differences. Like a PPIA, an offer in compromise is a contract between the taxpayer and the IRS where the taxpayer agrees to make regular payments. However, unlike a PPIA, the payment amount under an offer in compromise is fixed. It will not change even if the taxpayer’s financial situation improves. For this reason, the IRS prefers PPIAs, and offers in compromise are more challenging to obtain.
To qualify for an offer in compromise, a Chandler taxpayer must fill out IRS Form 433-A. This is an eight-page form that asks the taxpayer to provide the following information:
- Business asset information,
- Business income and expense information,
- Employment information,
- Monthly household income and expense information,
- Personal asset information,
- Personal information, and
- Self-employment information.
The IRS will use this information when deciding whether to approve the taxpayer for an offer in compromise, as well as to determine the payment amount. As with a PPIA, the IRS will not review an application for an offer in compromise if there are any outstanding tax returns or the filer has not made all estimated tax payments.
Delaying the Collection Process
Chandler taxpayers who cannot currently afford to pay any of their back taxes can request the IRS delay the collection process. Of course, even if the IRS approves the request, the tax debt does not go away. In fact, the total amount of taxes will increase, as the IRS will continue to impose penalties and interest until the taxpayer pays the entire balance. The IRS will typically file a notice of federal tax lien to protect its interests during the delay.
Once the IRS grants a taxpayer’s request to temporarily delay the collection process, it will periodically review the taxpayer’s financial situation. If the taxpayer’s finances improve and the IRS determines they can pay their tax debt, the collection process will resume.
At Kaczmarek & Jojola PLLC, our Chandler IRS tax legal team helps individual and business clients reduce their tax obligations through various means, including by submitting applications for currently not collectible status, for partial payment installment agreements, and offers in compromise. Not only can we help with your application, but we will work with you and the IRS to negotiate the lowest possible payment amount. With our help, you can take the first step toward putting your tax issues behind you so you can begin to move on with your life.
Reach Out to a Chandler IRS Tax Collection Attorney for Help with Your Tax Issues
If you are receiving threatening letters from the IRS, do not ignore them. Doing so will only delay the inevitable and put you in a worse position. Instead, give the IRS collection lawyers at Kaczmarek & Jojola PLLC a call. We can help you resolve your outstanding tax issues.
When you bring us on your team, we will begin by taking an in-depth look at your overall tax situation. We will then come up with a comprehensive plan for addressing all your tax-related issues. Depending on your circumstances and preferences, we can help you apply for a partial payment installment agreement or put together a compelling offer in compromise. Our skilled Chandler IRS tax collection lawyer will also negotiate the lowest monthly payment so you can continue to support yourself and your family. If the IRS already started the collection process by filing a notice of a federal tax lien, we can help to mitigate against any further financial harm.
To learn more and to speak with an attorney about your situation, give us a call today. You can also reach out through our online form, and one of our attorneys will contact you.