We see a lot of our clients going through a very difficult time when they come to us with their tax problems. Sometimes it is after a loved one has past or it is during a difficult divorce.
This specific client came to us after they had finished a hard divorce and was trying to pick up the pieces. He was working a job when the IRS started aggressively levying him, so much that he was barely taking home any money and was struggling to pay the bills.
Our client hadn’t filed a few tax returns and so the IRS filed Substitute For Returns for them. When the IRS files these substitutes, they don’t take any deductions or tax credits and so you are likely to owe a lot more than if you were to file them yourselves. That’s why it’s important to file your return, even if you can’t pay the amount you owe.
Our client came to us so he could get his tax problem under control and try to get a resolution set so he could move forward. We were able to get speak with the IRS and show how the levy was creating hardship for our client. Once our firm proved the hardship, we then put together his financials so we could try to see which resolution would be best for him.
We decided that his monthly disposable income was low enough that he could qualify for an Offer in Compromise. So we put together all the paperwork and sent it to the IRS and then had to wait almost a full year before the IRS would even review it. As a firm, we cannot speed up the process as the IRS sets the dates of review, and it is usually around 9 months from when they receive your application.
By the time the IRS reviewed the Offer, our client had gotten a better job and could now afford to pay more of his taxes. The IRS then rejected his offer. His tax attorney decided a payment plan would be the best route for our client. While our team was getting the paperwork for the payment plan, our client had a stroke and wasn’t able to work which led to him losing his job.
While our client worked to get healthy again, our firm decided that now would be a good time to try and file another offer in compromise as our client had no income and was borrowing money to survive. His Polston Tax team filed the offer and waited.
When the Offer Specialist contacted us, they didn’t believe that our client wasn’t able to return to work. Our firm was able to provide a doctor’s note, that detailed our client’s medical history and why he wasn’t able to return to work. After a lot of back and forth, the IRS finally approved the offer allowing our client to submit the payment and settle his tax liability once and for all! We ended up saving our client over $58,000!