I’m Way Behind on My Taxes – What Can I Do?

I’m Way Behind on My Taxes – What Can I Do?

If your tax debts are becoming overwhelming, there are a number of options you should be aware of.

If You’re Behind on Federal Taxes

You do NOT want the IRS to come after you. In order to get paid, the IRS can:

• Garnish your wages
• Freeze your bank accounts
• Seize and sell your house, your car, and any other personal property

If you haven’t filed your taxes for years, you could be looking at prison time and up to 0,000.00 in fines. The IRS has no time limit in collecting what they are owed (taxes penalties, and fines). If you have filed your taxes, but have not paid what you owed, the IRS has a 10-year statute of limitation to collect. But don’t think you have 10 years to pay – as soon as the IRS issues a “notice of deficiency”, they can start the collection process which includes the lien on your house and the levy on your wages.

If you are ready to try and get your federal tax debt under control, working with the right tax settlement lawyers can make all the difference, especially now. Before the pandemic, the IRS was understaffed and over worked. COVID made this problem much, much worse, leaving people trying to negotiate their own tax repayment programs in a very dangerous place.

Attorneys that specialize in tax debt negotiations have all the necessary systems in place to help you with any of the following was to help:

• Extension to Pay – agreement plans that provide taxpayers an additional 120 days to pay the IRS debt owed in full. This allows the taxpayer to avoid any late payment penalties.
• 72-Month Installment Agreements – payment plans that provides the taxpayer 72 months (6 years) to pay back the IRS. These plans are available to taxpayers with up to ,000 in tax debt owed. The IRS may require financial documents, but typically do not require a complete financial statement.
• 84-Month Installment Agreements – payment plans that provide taxpayers 84 months (7 years) to repay their IRS debt.  These plans are available to taxpayers with over ,000 but under 0,000 owed to the IRS. The IRS may require financial documents, but typically do not require a complete financial statement. Finally, the IRS will likely also require this payment plan have automatic payments set up prior to finalizing this plan.
• Partial Pay Installment Agreements – payment plans that provide an alternative to taxpayers who cannot afford either 72- or 84-Month Installment Agreements. The Partial Payment Installment Agreement is a plan which is based on your financial statement, which considers your income and expenses. Overall, this is an affordable option for those taxpayers who qualify.
• Currently Non-Collectible (CNC) – an option that requires financial statements to be provided. This option allows eligible taxpayers to avoid a monthly repayment plan while allowing the taxpayer to be in good standing with the IRS. The IRS will likely require financial statements every year to continue to have the taxpayer’s debt in a Current Non-Collectible status.
• Offers in Compromise (OIC) – payment plans that allow taxpayers to settle their entire IRS debt for less than the total owed. The IRS will not accept an Offer in Compromise if the taxpayer is believed to have an ability to pay the debt either as a lump sum or in a repayment plan offered.

If you have ignored your federal taxes too long and have received a Final Notice of Intent to Levy and a notice of your right to a hearing, it is important to call our office immediately to handle this matter for you. You do not want to fight the IRS on your own.

If You’re Behind on New York State Taxes

In some ways, New York State can be scarier than the IRS. Not only can they garnish your wages, freeze your assets, and seize and sell your property, they can also suspend your New York driver’s license.

As soon as New York State realizes that you haven’t you haven’t paid your taxes, they can file a tax warrant against you, without warning you in advance. There is a 20-year statute of limitation to collect that starts on the day the tax warrant is filed. Once filed, New York State can then begin the collection process, including garnishing 10% of your income until the tax liability is fully paid.

As with federal tax debt, the right tax settlement attorney can help negotiate your debt with the state. They can help with the following resolutions:

• Installment Payment Agreement (IPA) – under the NYS Taxation Department, IPA provides taxpayers with a balance of ,000 or less the option to pay off their balance over time. New York State allows installment agreements are available only up to a maximum of 36 months (3 years).
• Offer in Compromise (OIC) – this allows qualified, financially harmed taxpayers to resolve large tax liabilities. The state analyzes if payment in full of the debt creates an undue economic hardship in solvent taxpayers (such as if the taxpayer is unable to pay reasonable living expenses). 

If you have never filed your New York State taxes before, your best option is the NYS Tax Department’s Voluntary Disclosure and Compliance Program (our office can apply on your behalf). This can help you avoid fines and possible criminal charges. We will explain to the state what taxes you owe, which you’ll then have to pay (immediately or over time). 

What to Do First

If you’re looking for more information how to handle your tax debt, see our overview on Tax Debt Negotiations and Settlements https://www.ny-bankruptcy.com/services/mortgage-modifications-and-negotiations/tax-debt-negotiations-and-settlements/

Or if you’d rather talk directly to a compassionate, knowledgeable, human being, reach out to New York tax settlement lawyer Ronald Weiss for a free consultation. He can tell you if tax debt negotiation is right for you, and help you get the process started. Call 631-203-1730 and take the first step to a fresh start.