When it comes to filing your taxes, there are many obstacles in life that can cause you to file late, or just not file at all. Penalties and interest begin to accumulate, and it is alarming to see how quickly your tax liability can increase in short amounts of time. If you have years of unfiled tax returns or owe back taxes to the IRS and State, there is nothing more relieving than knowing you’ll have a fresh start going forward.
We often have clients come to us who have not filed returns in years, and have substantial tax liabilities with both the IRS and the state they live in. In this case, these clients were a married couple who filed bankruptcy on a business they previously owned. They did their own taxes for years, but things became more complicated and were too much for them to handle on their own. The husband worked in construction and had just opened a brand new business with their son, and he was expecting a significant increase in profit. The wife was receiving no income at the time because she was a retired teacher- but was not eligible to draw retirement yet. She was also diagnosed with cancer and was going through treatment for it, which is extremely expensive. Together, they had a low monthly disposable in-come amount- but they knew once the construction business took off, that their income was going to go up.
When these clients first came to us, they were actively in an Installment Agreement with the IRS- but received notice that their monthly payment amount was increasing due to an additional year of taxes owed. They could not afford the amount in which their payment plan increased, so they came to our office looking for help in re-negotiating with the IRS to get their monthly payment amount decreased before their income went up. Our office jumped in immediately to get this goal achieved for our clients. After investigating their accounts with both the IRS and the Oklahoma Tax Commission, we found that there were several years of unfiled tax returns that needed to be taken care of, plus a previous return that needed to be amended. Our office prepared and filed all their missing returns in addition to filing their amended return. Once these were processed by the IRS and OTC and we got them back into compliance, we were able to begin negotiating for our clients.
On the state side, the clients had never been in a formal agreement with the OTC. They owed about $9,000 including penalties and interest which had accumulated over the years. We were able to negotiate with the OTC to get them into an affordable monthly payment plan, and also achieved getting the majority of their interest removed from their account! On the IRS side, the couple had faced many threats from the IRS of levying their bank accounts and seizing their assets if they did not comply with their current Installment Agreement of $300/month. After much negotiation and proving to the IRS our clients needed something more affordable, they accepted our proposal of $25/month! In the end, our office was able to save our clients over $103,000!
If you need help settling your tax liability with the IRS or State, our team of experienced Tax Professionals at Polston will help you get the best resolution possible and solve your tax problems once and for all!