Dealing with IRS Tax Debt

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Do you Owe Back Taxes? If you owe the IRS back taxes, this course is for you. Dealing with IRS Tax Debt teaches everything you need to know about your unpaid federal income taxes. Before you contact a representation firm, consider our course which will provide you a working knowledge of your options and the process for dealing with your IRS Tax Debt.

From the Instructor – Read Before Contacting IRS Rep Firm: This course is the product of the twenty-five years I have helped clients deal with federal tax debt. Many spend thousands on tax-problem Fixers found on the TV, the radio, or the internet before they come to me.

One client exemplifies the others – let's call him Jim. Jim hired one of these firms to help him with his tax problem. At first, Jim owed roughly $8,000 in back taxes, penalties, and interest. The IRS was garnishing his wages, and he didn't have enough money to pay his bills. So, Jim put $2,300 on a credit card to pay for help. The firm stopped the garnishment by working out a payment plan on Jim's behalf. But now, Jim had another problem. He still couldn't pay his bills and make the payment to the IRS. He was digging himself deeper and deeper into debt.

Making matters worse, Jim now owed the IRS for another tax year and couldn't pay. In IRS-speak, this meant Jim's payment agreement was in default. Now, he owed the IRS over $12,000 and didn't know what to do. He definitely couldn't afford another $2,300 and was afraid. Another garnishment would break him. If he couldn't pay, was he going to jail?

I sat in stunned silence as Jim shared his story. When he finished, it took me a moment to recover. “You paid the rep firm $2,300?...to stop a garnishment?… And, now owe over $8,000 in tax?”

Jim nodded sheepishly. “Yes, I…-”

“First, you're not going to jail,” I interrupted, waving away the thought. “When it comes to back taxes, your greatest threat is your imagination.”

I then proceeded to ask Jim a few questions. After he answered, I told him to go home and call the number on the last notice he received. I also told him what to say when the IRS finally answered. He did.

Ultimately, things ended as I assumed (and should have for the $2,300 Jim paid for help). He got placed in what the IRS calls Currently Not Collectible Status because of his income and bills. All collections activity stopped, at least until he could afford to pay. Then, Jim could work out a payment plan that would not break him.

The deal was a win-win: Jim handled his IRS tax debt, and I earned a reasonable fee for helping him out.

Jim's outcome reflects how we work with clients with uncomplicated tax debt. Often, they resolve the debt on their own for a tiny fraction of what representation costs. If their efforts don't work, we can take over from there.

The success of our policy is why we created this course.

Do you Owe Back Taxes? If you owe the IRS back taxes, this course is for you. Dealing with IRS Tax Debt teaches everything you need to know about your unpaid federal income taxes. You will learn:

How and when income taxes get assessed
How long the IRS has to collect back taxes
Abatement of penalties and interest
When the IRS will stop collection activity & if these rules apply to you
Your payment options, including the Fresh Start Initiative that representation firms tout as the magic tax cure-all.

This course is a MUST BUY if you’re considering contacting a representation firm for help. In many cases, you will be able to handle the debt yourself, saving potentially thousands in fees. If not, it will provide a working knowledge of your options and the process, ensuring your representation dollars get put to good use.

Are You Looking to Help Clients with Back Taxes? Dealing With IRS Debt is also for you. If you or your employees are new to IRS representation, they will learn everything they need to know to start helping taxpayers with IRS tax debt. Our course includes tons of resources and study materials. It also comes with a free exam and answers guide. Even a certificate for those who complete the course!

Due to the nature of this course and federal regulations around representation, our instructors are not able to answer questions regarding this course.

Lesson Listing

Here is a list of the lessons in this course and a brief description of what you'll learn in each lesson.

Introduction & Overview
Learn about your instructor, whether this course is for you, and the topics covered by the class.
Tax Assessment, Penalties, & Interest
When and how taxes get assessed, the most common penalties assessed on unpaid taxes, and how interest accumulates on balance owed.
Collection Statute of Limitations
Learn how long the IRS has to collect your tax debt, how the collection period gets extended, and the statute’s importance in tax-payment strategies.
Working with IRS - Tools and Tips
This lesson covers transcripts you may need to deal with your tax debt. It also includes some tips to help you negotiate with the IRS, IRS employees you may encounter, and the authority of third-party tax collectors.
How IRS Applies Payments & Getting Penalties Abated
Learn the order in which the IRS applies tax payments to taxes due and how to override that order. You will also learn about penalty abatement and four ways to have them abated.
Allowed Living Expenses - Part One
The IRS uses allowable living expenses to determine your ability to pay your tax debt. These living expenses are essential, especially for those who do not have liquid assets (such as cash, savings, or stocks) to pay their debt outright. This lesson introduces Allowable Living Expense and covers the national standards for food, clothing, personal items, and out-of-pocket medical costs.
Allowed Living Expenses - Part Two
This lesson continues our discussion of Allowable Living Expenses and covers housing, utilities, vehicles and transportation, and other monthly bills the IRS will often allow before calculating the payment you can make on your tax debt.
Allowed Living Expenses - Two Examples
Many taxpayers enter into payment agreements they are not financially able to pay according to IRS standards. This lesson shares two examples; one single individual and a family of four, and how much income they must earn before the IRS requires payment.
Payment Options, Tips & Forms You May Need
We review the various ways to pay your tax due. We also introduce the various payment agreements available to taxpayers, including the Fresh Start Initiative representation firms sell in their ads. Lesson nine also discusses some of the forms you may need to complete when settling your tax debt.
Current Not Collectible Status & Partial Payment Installment Agreement
Currently Not Collectible Status is an essential representation tool. It’s available to those whose income is not above their Allowable Living Expenses. The Partial Payment Installment Agreement is a payment plan in which taxpayers pay what they can but not enough to pay the debt in full before expiration of the collection statute.
Fresh Start Program Intro & Guaranteed Installment Agreement
The 2011 Fresh Start Initiative did a lot to help taxpayers more easily deal with their tax debts. This lesson will provide an overview and discuss how to apply for the Guaranteed Installment Agreement, available to those who owe $10,000 or less in back taxes.
Fresh Start - Streamlined Installment Agreements
There are two forms of the Streamlined Installment Agreement. One agreement is available for those who owe $25,000 or less in taxes, penalties, and interest. The other is for those owing between $25,000 and $50,000. In this lesson, we’ll tell you how to apply for both!

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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