When our clients come to us, it is usually not a good time in their life. Usually, they are either dealing with serious medical problems, job losses, death in the family or other life-changing circumstances. These instances not only affect our clients emotionally but can affect their financial situation.
One of our clients was caring for his disabled daughter and his wife with Alzheimer’s when he was diagnosed with cancer. Due to the diagnosis and being the only caretaker, our client couldn’t work and ended up having to withdraw money from his 401(k) and retirement accounts to help pay the bills and make ends meet.
When our client came to us, he owed over $10,00 to the IRS and had liens filed against him. We first wanted to look at amending his tax return to see if the retirement withdrawals were reported correctly as that is where his large tax balance stemmed from.
After making sure everything was correct on his past return, we then filed his two missing tax returns to make sure he was fully compliant with the IRS. If you have missing tax returns, the IRS won’t work with you to resolve your tax issue, so it is important that you are fully compliant before you try to negotiate a resolution!
While we were filing his tax returns, our client got hit with a tax levy. We quickly got our client’s financials together to present a resolution to the IRS. When trying to negotiate a resolution with the IRS, they will want to see bank statements, bills and other proof of expenses as they take expenses into account when determining how much you as a taxpayer could afford to pay.
When taking all our client’s medical and living expenses, we saw that he had no disposable income left over, in fact, he was barely making it month to month. We took this information to the IRS and so they gave our client a First Time Penalty Abatement that lowered our client’s tax debt by almost $3,000. They also released his social security levy, allowing him to have full access to his money.
We then presented our financial analysis to the IRS showing that our client was barely making it month to month and couldn’t afford a tax payment. They agreed and placed our client into Currently Not Collectible status. This meant that our client did not have to make any payments to the IRS, and as long as his financial situation did not change, he wouldn’t have to worry about paying the tax debt back. This allowed our client to focus on taking care of his family and move forward. In the end, our office was able to save him almost $13,000!
If you need help settling a tax debt and don’t know where to start, Polston Tax is here to help! Our team of tax attorneys and tax accountants can help you get your tax debt settled and move forward. Give us a call at 844-841-9857 or click below to schedule a free consultation!