With the outbreak of COVID-19, the IRS revealed they will be backing off collections for a short period of time. If you owe taxes, you likely breathed a sigh of relief and put solving your tax problems even further on the back burner. But is this too good to be true? Is the IRS simply being generous to taxpayers during this time? Maybe. But here’s a more likely explanation.
When you decide to tackle your tax problems and (hopefully with the help of an experienced tax attorney) attempt to settle with the IRS, your “monthly disposable income” or MDI is considered when determining how much your payment plan or settlement will be. Because many businesses and bank accounts have been affected by COVID-19, it’s likely that your ability to pay is lower than ever. This is bad news for the IRS – as they want the most money possible in the repayment of your tax debt. How can they get water from a well that has run dry? Simple answer – they can’t! So why should they try now? Why not wait until the economy starts to recover, and you have more HARD-EARNED money to give them?
The IRS didn’t forget about the taxes you owe, and they don’t care that because of this hard time, your bank account might not fully rebound for years to come. Even worse – the government has been giving enormous amounts of relief money to Americans, which puts them in need of more cash than ever. The time is soon coming when collections will not only resume but will likely be more aggressive than ever because of these reasons.
BUT FOR YOU – the best time to resolve your tax problems is NOW when your income is at it’s lowest. You can use these last few months of devastation to your advantage and get into a resolution that reflects your past several months of income. Waiting until you’re making more money will likely mean that settlement or payment plan will go up.
Our advice? Act now. Don’t get caught wishing you solved this problem when your income was low and your chances of an affordable resolution were high. Give us a call at 844-841-9857 or click below to schedule your free consultation!