Every month we have clients come to us asking for help resolving their tax issues. They owe the IRS or the state or both. Owing taxes is a lot more common than people think. No case is the same and each resolution looks different for our clients. Here are two cases we were able to close this month.
Case #1: Losing a job can lead to a loss of income and when you have no income coming in, it can be impossible to pay your taxes. That is what happened to our client. He was laid off from his job and when the time came around for him to pay his taxes, he was unable to. He was hit with a tax lien on his property and knew things would only get worse, so he came to our office. Our first goal was to get his financials together so we could see what his financial situation was. Our client had a few tax returns that weren’t filed so we prepared and filed those first before we tried negotiating with the IRS. Next, we put together financials to try and get our client into Currently Not Collectible status. Due to our client owning his home, the IRS believed he had too much equity and wouldn’t approve the status. We then attempted to set our client up in an Installment Agreement. We waited for confirmation of the agreement but never heard from the IRS. When we contacted them, the agreement had never been sent to their manager for approval. Our client was being levied and so we knew we had to get them into a resolution. We put together new financials and were able to obtain a loan denial letter from his bank. It showed that our client could not borrow against his house to pay off his tax liability. The IRS agreed with our financials and approved a $25/mo Partial Payment Installment Agreement. This meant our client would save over $124,000 and resolve his tax issues.
Case #2: Medical problems are one of the most common causes of tax issues. For our next client, they had to withdraw money out of their 401k because they did not have enough money to pay their living expenses. Our client’s wife had been diagnosed with stage 4 brain cancer and he was dealing with medical problems of his own and neither were able to work. As a last result, they chose to withdraw from their 401K. They thought they would have enough deductions to cover their withdrawals but they did not. The IRS started to send them threatening letters and so they came to us for help. We put them into Currently Not Collectible (CNC) status as they had no income left over after they paid their monthly living expenses. A few years later, the IRS came back after them because they filed their tax returns and owed more money. Their situation hadn’t changed much and they were still barely getting by. We worked out a new financial proposal to include all tax years that they were behind on. The IRS pushed back against our CNC proposal, so we provided proof showing our clients’ high medical bills and limited income. The IRS agreed and put our client into CNC status again. This ended up saving our client over $119,000!
If you need help settling your tax liability with the IRS or State, call Polston Tax Today! Our team of Tax Attorneys, CPAs, Case Managers, and Tax Accountants will help you get the best resolution possible and solve your tax problems once and for all! Call 405-801-2146 or visit www.PolstonTax.com to schedule a free consultation!