If you ever failed to file a tax return or paid less than the Internal Revenue Service (IRS) says you owe, you are probably receiving collection notices.
The IRS expects that you will pay the tax immediately, allowing them to close your file with minimal effort and expense. However, you might have legitimate reasons for nonpayment, perhaps financial strain prevents you from paying, or you do not actually owe the underlying tax.
A Vienna IRS collection lawyer understands the process and could advise you on your options for addressing the situation. A reliable tax lawyer understands how the IRS operates and what you need to do to resolve your outstanding debt.
The IRS has broad powers to collect unpaid taxes. Penalties and interest start building from the moment the unpaid amount is due, and interest compounds daily. Once there is unpaid tax, the IRS has a tax lien on the taxpayer’s property and can choose to file a tax lien in the public record at any time.
When it first notices unpaid tax, the IRS will send a letter explaining the unpaid balance and demanding immediate payment. If the taxpayer does not pay the balance or make a payment arrangement, the IRS continues to send letters which warn of enforcement actions like garnisheeing wages, seizing bank accounts, or even placing a tax levy on a home.
Although the IRS has the power to take these actions, it rarely does so because most tax collection cases resolve through other, less drastic means. A Vienna attorney could explain the options that might be available to someone when they are facing an IRS collection effort.
The IRS tries to collect the money it is owed in the most inexpensive and efficient way possible. The agency offers multiple alternatives to taxpayers to assist them in satisfying their tax debt.
No matter what, a taxpayer should never ignore communications from the IRS, as that will only compound the problem. An IRS collections lawyer in Vienna can explain the benefits and evaluate eligibility of the various payment plans.
Sometimes, the IRS will accept less than it says a taxpayer owes. A legal professional might convince the IRS to accept a percentage of the outstanding balance as payment in full. However, there are only a handful of situations that qualify a taxpayer for this option.
When taxpayers do not dispute how much they owe but cannot pay it at once, the IRS often will allow them to pay their debt in installments. There is a fee to set up the agreement, and penalties and interest continue to accrue, so this option will cost the taxpayer additional money. Additionally, if a taxpayer cannot afford an installment agreement that will result in a full payment, the IRS may allow the taxpayer to enter into an installment agreement that will result in a partial payment. However, if they make the monthly payments on time, it is a way to resolve the debt without worry that the IRS will take any other collections action.
If a taxpayer is experiencing financial hardship, the IRS might suspend collection activities temporarily by designating Currently Not Collectible status. The IRS is not eliminating the debt but acknowledging the taxpayer does not currently have the means to pay it. Penalties and interest continue to accrue while the suspension is in effect. The IRS will monitor the taxpayer and resume collection efforts when the taxpayer’s financial situation improves.
If a taxpayer disputes the amount that the government says they owe, the formal IRS dispute process allows an attorney to have a conference with an IRS Appeals Officer. The attorney presents the specific issues the taxpayer believes led to an excessive tax bill. The Appeals Officer has the power to compromise regarding the amount due.
There is some flexibility when it comes to paying your overdue tax debt. A Vienna IRS collection lawyer could explore multiple options to address your situation that would satisfy the agency and relieve the pressure on you.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Vienna, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.