There are many ways to deal with IRS debt, some more pleasant than others. Whatever you do, do NOT hire out-of-state accountants, alleged tax professionals or attorneys to represent you. If things go bad, you may need immediate relief from the collection actions of the IRS, which those individuals will not be able to provide.
IRS debt can be dealt with through Offers in Compromise, Installment Agreements, or having the IRS place you in Uncollectible Status… these solutions are outside of the bankruptcy process, and sometimes make sense. The tax relief which might be appropriate generally depends on the amount of the tax debt and how “old” the tax debt is.
Each approach has some prickly issues to deal with. Offers in Compromise may extend the period of time that the IRS has to continue to collect. Installment Agreements do not stop interest and penalties and are therefore often not effective in actually reducing the tax debt because the IRS accrues that interest and penalties at very high rates. Persuading the IRS to place you in Uncollectible Status has its short term benefits (i.e., they won’t harass you for maybe up to two years), but they will find you again and you will have to convince them all over again that you can’t pay the tax debt. This can continue for up to ten-plus years.
Getting Tax Debt Relief
Bankruptcy is sometimes a very attractive option because you can generally pay down the tax debt over a relatively long period of time, up to five years. The tax debt is paid without any further penalties or interest. It does get paid, but it gets paid down dollar-for-dollar. And it provides a “final” solution, meaning that once the bankruptcy case is over, the IRS issues are over also, forever.
Our firm is perfectly willing and capable of resolving tax issues in any way that makes sense and allows you and your family to breathe again financially and to relieve the constant stress and fear created by the IRS collection process.