5 Strategies to Resolve Tax Debt with the IRS

Tax attorney consultation at Brotman Law

Key Takeaways

  • Keep in mind what the result is that you are seeking and try to steer the representative toward giving you that resolution.
  • Why put yourself through such misery.
  • Second, repeat the resolution back to the agent to make sure your understanding of the resolution is confirmed.

Dealing with the IRS is a royal pain, regardless of how much or how little you owe. If dealing with the IRS Automated Collection System (ACS) is making you pull your hair out, here are five strategies that you can use on your own to get through. The good news is that these techniques are simple and do not cost anything. All it takes is a little planning and a lot of patience.

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What Are the Consequences of Running from the IRS?

Tax attorney consultation at Brotman Law

Key Takeaways

  • Having tax issues with the IRS is extremely stressful, regardless of how you landed there.
  • Faced with all of this, when the “fight or flight” response kicks in, many taxpayers decide to flee.
  • There are exceptions to this three-year rule.

Having tax issues with the IRS is extremely stressful, regardless of how you landed there. First, there is the crushing worry about the financial implications. Nobody likes being in substantial debt, especially, when it threatens your standard of living or the stability of your home or business.

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Strategies for the IRS Automated Collection System

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Automated Collection Systems

Key Takeaways

  • Many taxpayers get frustrated when dealing with the IRS Automated Collection System (ACS). After what can be some long wait times, taxpayers are sometimes presented with seemingly inflexible options for resolving their balance due to the IRS.
  • While I do appreciate the business from prospective clients, I am sympathetic to their financial difficulties and encourage them to at least try to resolve their own tax issues before turning to professional assistance.
  • One of my favorite sayings is that you “win more flies with honey than with vinegar.” No truer is that statement than in my experience dealing with the IRS Automated Collection System.

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Can a Currently Non-Collectible Status Stop the FTB?

Currently Not Collectible Status

can a currently non-collectible status stop the ftb

Key Takeaways

  • If the FTB believes that in the future their collection efforts will be successful, a state lien will be filed against you before your account is officially declared CNC.
  • To obtain CNC status, you must be able to prove financial hardship.
  • If your account is placed on CNC status, it is taken temporarily out of collections. Wage garnishments, asset seizures, and bank levies will end or never be started.

Sometimes your financial fortunes take a turn for the worse, and you find yourself owing back taxes to the Franchise Tax Board. You don’t even have two coins to rub together, much less make installment payments, yet you are looking for an alternative to filing for bankruptcy. An Offer in Compromise is also off the table; you just don’t have the money.

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Income Withholding Order: How to Process an EWOT

Man handing over a check for ERC refund process 2025.

income withholding orders

Key Takeaways

  • As an employer, you may receive an income withholding order in relation to one of your employers.
  • If a higher priority order, such as a court ordered withholding order for child support or JWOT, is issued after an EWOT, it takes priority.  The EWOT will then be calculated as the remainder of 25% of the disposable income, if any.
  • If a second EWOT is issued when a first EWOT is in effect, the first EWOT remains in effect and is not displaced.  The second issuer should be notified that the first EWOT is in place and you are already withholding on that order.

Being served with an income withholding order can be a disconcerting experience as an employer. These orders can come from a variety of sources, but they are all legally binding and require careful handling. Understanding how these orders work, what your obligations are regarding them, and how to comply with them is very important. Failing to do so can have severe consequences for you and your business.

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FAST Act Give IRS Power to Revoke Passports for Tax Debt over $50K

Irs Passport Revocation

irs_passport_revocation.jpg

Key Takeaways

  • The recent passage of the FAST Act has some people worried about their ability to travel and live abroad because of their IRS liabilities.
  • As such, many Americans, both domestic and living abroad, are left wondering what the consequences of the new measure will be and how the government will enforce these new provisions.
  • Carve-outs in the law exist at the Secretary of State level for emergency situations or humanitarian objectives, but not for economic hardship or any other considerations.

The recent passage of the FAST Act has some people worried about their ability to travel and live abroad because of their IRS liabilities. Although Congress has long toyed with the idea of tying tax compliance to international travel privileges, the new law now codifies the ability of the government to restrict passports of anyone who owes the IRS more than fifty thousand dollars in outstanding and unresolved tax liability.

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What is the Taxpayer Advocate?

The Taxpayer Advocate helps taxpayers resolve problems with the IRS. The Taxpayer Advocate also recommends changes to help prevent problems in the future. The advocate handles those tax problems that are causing significant financial difficulty; when you or your business are facing immediate, adverse threat; and when you have tried to contact the IRS repeatedly to no avail. The Taxpayer Advocate is a member of the Taxpayer Advocate Service (TAS).

Key Takeaways

  • The mission of the Taxpayer Advocate Service is to help taxpayers resolve their tax problems and recommend changes to help prevent future tax problems.
  • You must qualify to receive help through the Taxpayer Advocate Service. The next section outlines the eligibility requirements of the service.
  • The Taxpayer Advocate Service is a free service. The assistance is tailored to meet each taxpayer’s need and it is available for businesses as well as individuals. Each state houses at least one Taxpayer Advocate.

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IRS Taxpayer Advocate – What it Does

The IRS Taxpayer Advocate helps taxpayers resolve problems with the IRS. The Taxpayer Advocate also recommends changes to help prevent problems in the future. The Taxpayer Advocate handles those issues when the tax problem is causing significant financial difficulty; when you or your business are facing immediate, adverse threat; and when you have tried to contact the IRS repeatedly to no avail.

Key Takeaways

  • The IRS Taxpayer Advocate helps taxpayers resolve problems with the IRS. The Taxpayer Advocate also recommends changes to help prevent problems in the future.
  • The IRS Taxpayer Advocate will particularly help you if the IRS has failed to respond by the date promised.
  • It is important to note that the IRS Taxpayer Advocate will not handle all of your problems or attempt to resolve all of your difficulties.

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Who Qualifies for Legal Aid – Part One

A list of free legal clinics is available on your local and state Bar Association website and through Volunteer Attorney programming. Local entities also offer neighborhood legal services and legal aid clinics. In addition, university law programs offer free legal aid. Consult your local websites and universities for more information. In general, qualifying for free legal aid is based upon a number of factors related to income, health status, safety, location, and civil and/or criminal issues. The following sections provide insight into those categories that are specific to qualifying for legal aid.

Key Takeaways

  • A list of free legal clinics is available on your local and state Bar Association website and through Volunteer Attorney programming. Local entities also offer neighborhood legal services and legal aid clinics.
  • If you have been accused of a crime, you may qualify for legal aid. You may be eligible to receive legal services from a court-appointed attorney or public defender.
  • If you are poor or needy, as defined by the appropriate court, you may qualify for “indigent representation.” “Under indigent representation, you may have to partially reimburse the court for the cost of legal services given to you” (HireALawyer.com, FindLaw.

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Who Qualifies for IRS Legal Aid?

Click here for the previous section about legal aid.

Disabled Veteran Status

If you are a disabled veteran, you may qualify for free IRS legal aid. Eligibility is based upon issues that may range from rental assistance to child visitation matters. To determine if you are eligible, contact your local veterans association. The association will help you to determine if you or a member of your household qualifies for a number of services and free legal aid.

Key Takeaways

  • If you are a disabled veteran, you may qualify for free IRS legal aid. Eligibility is based upon issues that may range from rental assistance to child visitation matters. To determine if you are eligible, contact your local veterans association.
  • Most agencies and organizations offer free IRS legal aid services to immigrants and noncitizens that need help with visa applications, green cards, deportation proceedings, and work authorizations (“Do You Qualify for Free Legal Aid?”).
  • You may be eligible to receive free IRS legal aid if your issue falls under civil rights, or lack thereof.

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