Tax Debt Resolution
The IRS and local taxing authorities have multiple tools to collect delinquent taxes. They are very effective and they include levies, where the government takes property, and Notices of Federal Tax Lien, where the government notifies the world and destroys credit scores. A tax levy is an extremely harmful collection tool as it authorizes the IRS or the state to garnish wages and take money directly from bank accounts. The good news is that our Denver tax attorneys can help resolve your outstanding tax liabilities and put an end to tax liens and levies.
Our Denver tax attorneys will use the IRS and state collection process to protect you and pay your taxes according to your ability to pay. We will determine the best possible resolution for your case and secure the most advantageous payment plan, Offer in Compromise, or in some cases a status called “currently not collectable” where the IRS agrees to leave you alone.
One important tool in resolving tax debt is the Collection Due Process hearing. This administrative process gives taxpayers a timeout from IRS collections to allow them to challenge a tax liability if they have not before and to work out a collection alternative like an installment agreement or offer in compromise. The right to a CDP hearing is provided by IRS Notice after the filing of a Notice of Federal Tax Lien and 30 days before the IRS is allowed to levy a bank account or paycheck. Sometime these notices, and the rights they give, are difficult to understand and, even when they do make sense, the path forward is complicated. We can help.
There are two basic kinds of installment agreements – full pay and partial pay. A partial pay installment agreement allows taxpayers to pay according to their ability to pay, over the remaining time on the Collection Statute of Limitations and that amount, like an Offer in Compromise, is less than the full liability. Full pay Installment Agreements, on the other hand, allow taxpayers to pay the full liability off over a period of time – often 6 years. Our Denver tax attorneys have secured numerous favorable payment plans that were reasonable and acceptable to our clients. The IRS and the state provide for monthly installment agreements to allow taxpayers to pay their delinquent taxes. But one size does not fit all. Our Denver tax attorneys will present your financial situation in the most advantageous way allowable, in order to secure a payment plan that does not result in a hardship.
Offers in Compromise
Offers in Compromises allow qualified taxpayers to settle their delinquent taxes for a fraction of the total amount due. The process, however, is not as simple as the commercials claim when they say, “settle your taxes for pennies on the dollar”. Nevertheless, when skillfully presented by an experienced tax attorney, a taxpayer’s financial situation may qualify her or him for a reasonable offer in compromise wherein a portion of the tax liability is forgiven.
Offers are generally based upon a taxpayer’s ability to pay or Reasonable Collection Potential (“RCP”) also known as a “doubt as to collectability” offer or upon other circumstances that warrant consideration even if the taxpayer can pay such as age or illness.
Working with our Denver tax attorneys will allow you to determine if you are eligible for an Offer in Compromise, payment plan, a tax time out known as “current not collectable” or some other collection alternative. The process is complicated and the IRS Forms 433 require full financial disclosure to determine Reasonable Collection Potential. If RCP exceeds the amount a taxpayer owes, the Offer in Compromise will be rejected; if it is less, an offer of some kind could be possible. Of course, other factors are also taken into account such as the amount of time left on the collection Statute of Limitations (the period in which the IRS can exercise its Lien and Levy powers). To determine whether you qualify for an Offer, our Denver tax attorneys are prepared to advise you and, if so, present your Offer in Compromise in the most favorable light allowable.