Resolving Collections Cases
The typical way to resolve a collections case is to agree to pay the tax. This can be done through an Installment Agreement, which allows you to pay the balance due over many months. An installment agreement is ideal for someone who cannot currently pay their tax, but who anticipates being able to pay it off over several years. When an installment agreement is negotiated by your tax attorney, it can often be coupled with a reduction in penalties.
Sometimes, the IRS will agree to accept an amount that is less than the balance due. This is called an Offer in Compromise and is a good option for those who cannot afford to pay the tax owed in the foreseeable future, or do not agree with the amount owed. An offer in compromise can take many months to be accepted, but the wait time is worth it if it results in your tax liability decreasing.
IRS Tax Lien
A tax lien is a legal claim to your property. A federal tax lien is not limited to the property you had before the lien was filed, but can apply to all property. Aside from the lien itself, there will also be a Notice of Federal Tax Lien in the public records. This allows anyone performing a credit check, or anyone perusing the case search database, to see that you have a lien filed against you by the IRS. It also notifies your creditors that the IRS has a claim to your property. Since the lien may appear on your credit report, it can harm your credit rating and prevent you from getting a loan. Once a lien is filed, the IRS generally will not release the lien and withdraw the Notice until the tax (along with all penalties and interest) is paid in full. If you meet certain requirements of the Fresh Start Program, however, the IRS may make an exception and withdraw the Notice of Federal Tax Lien if you enter into direct debit payment agreement.
IRS Tax Levy
A lien can be intimidating, but a levy is even worse. A lien secures an interest in your property; a levy actually takes the property to pay the tax debt. The IRS can levy your wages, bank accounts, Social Security benefits, retirement income, and even your physical property. The physical property will then be sold to pay your tax debt. Due to its immense power, the IRS may levy your income and property without gaining prior approval from the courts. Luckily, levies can be avoided and resolved through open communication and cooperation with the IRS, and Mr. Frost can handle this for you. If you have already been levied, we will work hard to have your levy released so you can go back to living your life without so much stress and financial difficulty.