I have helped clients handle their IRS tax debts for over twenty years - worked with countless individuals who have gotten behind with their tax obligations.  Most – I am happy to say - have been upstanding citizens.  The most common reason they owe back taxes is a financial problem that makes them unable to pay, at least for now.   

My decades of experience have also afforded a common-sense discovery.  Those who don’t have the money to pay their taxes don’t have the positive cash flow to purchase professional assistance.

Sadly, many – too many – clients arrive after going into debt to pay tax resolution firms.  They become clients for a variety of reasons.  For some, their tax problem remains unresolved.  For others, the fix was temporary and returned.  The remainder has new issues and cannot afford more crushing fees.  Helping these clients is how I discovered and perfected a win-win that became Overnight Accountant’s course, Dealing with IRS Tax Debt.

The Win-Win:  I am a teacher at heart.  I want clients to understand their situations and have a knack for distilling complex tax jargon into easy-to-follow action steps.  Once clients overcome their fear of the IRS and realize they will not go to jail or lose their homes, they breathe a sigh of relief and see their tax debt for what it is - a problem to solve.  Best of all - after a bit of education and coaching, many go on to handle their tax issue themselves.

Here’s the process: After an initial fact-gathering interview, I assess whether clients are good candidates for self-representation.  To those who are, my advice is this:  

“I can handle this for you if you like, but it can be time-consuming.  And, time-consuming translates into expensive.  But [and here’s the win-win], I think you can handle this on your own.  It’s worth a shot.  If you’re not successful, then you can pay me to help.” 

If the client agrees, I explain their options and tell them what to do next.  The result?  Very, very often – success!  But, even when it’s not, the education and experience provide a hands-on understanding of their situation and the collection process.  They also know that money spent on assistance is a necessary investment.

The success of the process inspired the Dealing with Tax Debt course I instruct on OvernightAccountant.com.   The course teaches everything you need to know about the IRS collection process, your options as a taxpayer, and how to utilize those options.  If you owe the IRS back taxes or know someone who does, check it out – preferably BEFORE you hire a tax resolution company. 

Making the Most from Dealing with IRS Tax Debt:  Understanding the collection process and IRS policies is priceless knowledge, regardless of the amount of tax you owe.  From my experience, however, those who make the best candidates for successfully handling their tax debt are those who meet the following criteria:

  • The Tax You Owe is Income Tax: You might need professional assistance if you owe other taxes, such as employee payroll tax.  These are called Trust Fund Taxes.  The IRS will aggressively pursue these amounts due and have a breadth of resources to collect them.
  • Have Filed all Required Tax Returns:  Until you have filed all income tax returns that are due, the IRS will not work with you to resolve your tax issues.
  • You Do Not Dispute the Tax Due: If you feel the assessment is incorrect, you have the right to dispute the liability.  The same is true if you filed jointly with a spouse or ex-spouse and feel you are unjustly liable for their taxes – contact a professional.
  • There is No Question of Fraud: If there is, hire a professional – an attorney, ASAP.
  • You Owe $50,000 or Less:  This course will help if you owe more, but it focuses on those with $50,000 or less in back taxes and the IRS Fresh Start Program (Initiative).

The Bottom Line:  If you owe back taxes, you owe it to yourself to learn IRS procedures and the options available to Deal with Your IRS Tax Debt.  If you meet the criteria above, there’s a good chance you can resolve the debt on your own.  Even if you hire representation, the education will make you more confident and better positioned to ensure you are not wasting money.  Either way, it’s an investment.  A Win-Win!

All courses and articles are for informational purposes only and do not constitute tax advice. Taxes are complicated - do not act on course information without consulting a professional. Always refer to treasury regulation before making any tax decision. Read the full disclaimer.

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