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Case Studies: Unpaid Taxes & IRS Collections
We provided case studies to illustrate the types of situations where we believe we can offer valuable assistance. These are real client situations that we have worked on in the past, but we have altered the names and removed identifying details to protect our clients’ privacy. Please note that past results are not necessarily indicative of what can be achieved in your case.
Self-Employed With Unpaid Tax Debt
James is a self-employed individual who failed to file his taxes for the years 2007-2015. As a result, the IRS filed substitute returns on his behalf and he now owes a total of $1 million in unpaid taxes, penalties, and interest. James has a significant unpaid tax debt and is currently unemployed, but easily employable, with no assets or income. He is unsure of how to proceed in resolving this debt and is concerned about the potential consequences if it remains unpaid, and, given the size of the balance, James is worried about criminal tax problems.
Our tax attorneys reviewed James’ filings and his goals. The first step for resolving his tax debt was for James to file returns for the years 2007-2015 in order to replace the substitute returns filed by the IRS. This allowed us to help James explore tax deductions and tax credits that significantly lowered the amount owed. We had to do this to reduce the balance to minimize the chance of criminal tax issues given the high balance. Once these returns were filed, our tax attorneys explored the possibility of an offer in compromise, which involved asking the IRS to lower the tax debt amount due to James’ inability to pay.
By filing the returns and pursuing an offer in compromise, James was able to lower the amount owed and avoid penalties and interest accumulating on the larger debt while we worked on the offer. After negotiations, our tax attorneys secured an offer in compromise that worked for both James and the IRS.
James’ unpaid tax debt was a significant issue that required immediate attention. By working with our tax attorneys and taking the necessary steps to file returns and secure an offer in compromise, we were able to resolve the tax debt and avoid further penalties and interest. As long as James remains compliant going forward, he has the so-called “fresh start” that he needed to move forward.
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