rs-irs-tax-debt-resolution Archives - Page 7 of 10

What Does the IRS Appeals Process Look Like?

May 25, 2026July 10, 2020 by Brotman Law

So IRS appeals is supposed to be an independent body that is neutral and that’s designed to resolve disputes with the IRS prior to going to tax collections. In reality Appeals is staffed with a bunch of former auditors and a bunch of former collection agents however we’ve had a lot of positive experiences in the course of Appeals in this firm so I like dealing with appeals. I find the appeals process is generally fair and impartial and generally yields a pretty good result depending on the circumstances. Now the good news with appeals is that the auditor is not involved in the process at all. The auditor has taken

Key Takeaways

So IRS appeals is supposed to be an independent body that is neutral and that’s designed to resolve disputes with the IRS prior to going to tax collections.
the time to prepare and submit an audit report which gets forwarded to appeals, but you have the opportunity before the case gets to the appeals officer’s desk.

What Happens If I Owe Money at the End of an IRS Audit?

May 25, 2026July 10, 2020 by Brotman Law

So if you owe money at the end of an IRS audit it’s like owing liability on your taxes. You can pay the liability, you could work out a payment plan or you can go into collections and work out a resolution. Generally speaking what happens is the auditor will close the audit. That bill will be an issue and if you don’t appeal that bill, you’ll go directly into collections. The best thing to do is to speak with the auditor and see if you can negotiate a straight handoff to collections. It’s not possible in all cases particularly where the liability is small but if you discuss things with the auditor they may be able to shortcut the process into collections and allow you to work out a resolution of the liability. This also tends to happen in cases where they’re a large audit. The auditor will pass you off to a revenue officer and you’ll start working with that revenue officer immediately to try and collect the liability but in either case if you owe money, don’t worry there’s a lot of things that you can do on the IRS side to mitigate that liability and to work out terms that you can potentially deal with.

Key Takeaways

Topic: What Happens If I Owe Money at the End of an IRS Audit?
So if you owe money at the end of an IRS audit it’s like owing liability on your taxes.
You can pay the liability, you could work out a payment plan or you can go into collections and work out a resolution.

Dealing with an IRS Audit?

Every audit has a scope — and what you produce in response sets the direction of the examination. Whether you’re just opening an audit notice or already in correspondence, a brief review can clarify where you are and what your options are.

Discuss My IRS Audit → Or call: (619) 378-3138

Generally, What Is Brotman Law’s Strategy in IRS Audit?

May 25, 2026July 10, 2020 by Brotman Law

Key Takeaways

Generally, what is Brotman Law’s strategy in an IRS audit?
So when we look at a return in the context of an audit.
In doing that and in identifying the areas we think are at most risk, that’s where we devote our focus and attention to the audit.

Generally, what is Brotman Law’s strategy in an IRS audit? So the strategy that we have in the firm for IRS audits is essentially what I call seeing the playing field. It’s really important in an IRS audit because of the way that tax returns get audited, to understand what you’re dealing with going into the audit.

So when we look at a return in the context of an audit. We’re constantly trying to figure out what about this return is special? Why did it get audited? Where does the IRS see the large propensity for an adjustment?

In doing that and in identifying the areas we think are at most risk, that’s where we devote our focus and attention to the audit. We certainly want to prepare for everything, but by focusing on the areas that we believe the auditor is going to focus it on, we can help mitigate a lot of the client’s risk.

Again, the goal is to control the scope of information and to make as good of a presentation to the auditor in order to minimize the time spent in the audit and get out as quickly as possible. We’re trying to maximize efficiency, we’re trying to minimize risk, and we’re trying to conclude the audit as quickly as we can. That’s the way our firm handles IRS audits.

Dealing with an IRS Audit?

Discuss My IRS Audit → Or call: (619) 378-3138

What Is the IRS Collections Process?

May 25, 2026July 10, 2020 by Brotman Law

People not paying their taxes is a very serious issue for the IRS. It’s something that we as taxpayers call the tax gap. The IRS collection process is an increasingly serious step of collection measures designed to get people in compliance and make sure they stay in compliance. One of the reasons people complain about penalties and interest so often is they’re a deterrent that the IRS uses to make sure that you don’t owe money on your taxes. When you see liabilities rise by 25, 30, 40 % or even higher, it’s going to make you think twice about not paying your taxes, but the IRS doesn’t just issue penalties and interest.

Key Takeaways

People not paying their taxes is a very serious issue for the IRS. It’s something that we as taxpayers call the tax gap.
The IRS starts by taking increasingly serious actions such as garnishing your wages, levying your bank accounts, putting liens against your property and a whole host of other measures designed to force you back into compliance.

What Are my Options If I Owe More Money Than I Can Pay to the Government?

May 25, 2026July 10, 2020 by Brotman Law

So assuming that you can’t full pay your liability, you have a couple of different choices. First if you only need a temporary solution, you can request the IRS give you up to a hundred and twenty day extension to pay your taxes. The IRS will usually do so with little fuss. If you need more than that, the IRS is going to mandate that you get on a payment plan:

Key Takeaways

So assuming that you can’t full pay your liability, you have a couple of different choices. First if you only need a temporary solution, you can request the IRS give you up to a hundred and twenty day extension to pay your taxes.
what we call an installment agreement. The IRS is going to want to see measurable progress towards paying off your liabilities based on your financial circumstances and the amount that you owe.

Will I Go to Jail If I Owe Money to the IRS?

May 25, 2026July 10, 2020 by Brotman Law

Owing money to the IRS will not send you to jail. The IRS is a collection agency, not a prosecution machine — and the overwhelming majority of people with tax debt never face criminal charges of any kind.

That said, the distinction between owing taxes and committing a crime is real and worth understanding. Not paying a tax bill is a civil matter. Lying to the IRS about what you owe is potentially a criminal one. Those are two different situations, governed by two different parts of the tax code, and the IRS handles them very differently.

The Legal Difference: Failure to Pay vs. Tax Evasion

Failing to pay taxes is a civil penalty under IRC § 6651. Tax evasion is a federal crime under IRC § 7201.

Under IRC § 6651(a)(2), the IRS imposes a failure-to-pay penalty of 0.5% per month on unpaid tax, up to a maximum of 25%. That’s expensive — but it’s a financial consequence, not a criminal one. The IRS assesses it by mail and collects it through the normal civil process.

Tax evasion under IRC § 7201 is different. It requires the government to prove willful conduct — that you knew you owed taxes and deliberately tried to avoid paying or reporting them. Conviction carries a potential sentence of up to five years in federal prison plus substantial fines. But conviction requires a criminal prosecution, a grand jury, a trial, and proof beyond a reasonable doubt. The bar is high. Most people with tax debt never come anywhere near it.

How Rare Criminal Prosecution Actually Is

The IRS Criminal Investigation (CI) division opened approximately 2,500 criminal cases in its most recent fiscal year, out of more than 150 million individual returns filed.

That’s a prosecution rate of roughly 0.0017%. CI focuses its resources on fraud cases with clear evidence of willful conduct: false returns, hidden offshore accounts, unreported income from illegal sources, structured cash transactions designed to avoid reporting thresholds. A taxpayer who fell behind on their tax bill and got in over their head is not the CI target profile.

The IRS prefers to collect money. Criminal prosecution is expensive, slow, and it collects nothing. The IRS has strong financial incentives to work through the civil collections process first.

What Actually Happens When You Owe Back Taxes

When you have unpaid taxes, the IRS follows a standard civil collections sequence: notices, then a lien, then collection action.

The process typically starts with a CP501 balance due notice, followed by a CP503 second notice, and then a CP504 — which is the IRS’s intent to levy. If you still don’t respond or pay, the IRS can file a Notice of Federal Tax Lien (which attaches to your property) and issue levies against your wages, bank accounts, or other assets. All of this is civil. None of it is criminal.

You have rights at each stage. You can request a Collection Due Process (CDP) hearing under IRC § 6330 to challenge the collection action or propose an alternative resolution. The IRS cannot levy while a CDP hearing is pending.

Behaviors That Shift Civil Cases Toward Criminal Investigation

The conduct that draws criminal attention is not falling behind — it is actively lying or concealing.

Specific patterns that tend to attract CI referrals: filing returns that materially understate income; holding assets through nominees to hide them from the IRS; maintaining unreported foreign accounts in violation of FBAR requirements; diverting payroll trust fund taxes for personal use; and structuring bank deposits to avoid the $10,000 currency transaction reporting threshold. These involve affirmative deception, not just unpaid bills.

If you have any of these facts in your background — even old ones — that changes the conversation and you should talk to a criminal tax attorney before doing anything else with the IRS.

What to Do If You Owe Back Taxes

The civil resolution options for back tax debt are real and the IRS uses them regularly.

Form 9465 — Installment Agreement Request — is the most common path. The IRS typically approves streamlined installment agreements for balances under $50,000 without requiring detailed financial disclosure. For larger balances or hardship situations, an Offer in Compromise (OIC) settles the debt for less than the full amount owed if you can demonstrate that the IRS cannot collect more. Currently Non-Collectible (CNC) status pauses collection when you genuinely cannot pay your basic living expenses and the tax bill. None of these require a courtroom.

Frequently Asked Questions

Will I go to jail for not filing my taxes?

Willful failure to file is a federal misdemeanor under IRC § 7203, carrying up to one year in prison — but criminal prosecution for non-filing is rare and typically reserved for people who repeatedly and deliberately fail to file while earning significant income. If you have unfiled returns, filing them late is almost always better than continuing to ignore them. The IRS has a voluntary compliance framework that generally results in civil penalties, not prosecution.

Can the IRS put you in jail for owing back taxes?

No. The IRS cannot imprison anyone. Criminal prosecution is handled by the Department of Justice on referral from IRS Criminal Investigation. The IRS’s own tools are civil: liens, levies, wage garnishments, and collection enforcement. Owing taxes — even a lot of them — does not by itself trigger a criminal referral.

What is the difference between tax fraud and tax evasion?

Tax evasion (IRC § 7201) is the criminal offense — willfully failing to pay or report taxes you owe, with the intent to evade. Tax fraud is a broader term that includes both civil fraud (IRC § 6663, a 75% penalty on underpaid tax) and criminal conduct. Civil tax fraud does not require prosecution; the IRS assesses it as a penalty. Criminal fraud or evasion requires a conviction in federal court.

If you’re dealing with back taxes and trying to figure out your options, our IRS tax debt resolution page covers installment agreements, Offers in Compromise, and when each makes sense — or book a free 15-minute call to talk through your specific situation.

Have a Tax Question or Notice?

If you’re dealing with an IRS audit, collection action, California state tax matter, or any other tax issue, we can review your situation in a free 15-minute consultation.

Schedule a Free Call → Or call: (619) 378-3138

How Much Is it Going to Cost for Brotman Law to Defend Me in the IRS Collection Process?

May 25, 2026July 9, 2020 by Brotman Law

In the IRS collection process, there’s a lot of answers to that and obviously my answer in terms of cost is going to be very fact dependent on how much you owe the IRS and what the situation is and whether or not you have a local agent chasing you and so on and, so forth. But I’ll generally say this. It’s situations where we can get our head around the issue, just pretty much every one of them and we formulate a plan in place, the steps to resolve that plan are usually not that bad. Resolving IRS collections is pretty straightforward because the IRS uses a formula for resolving collections matters in terms of what they’ll accept or not accept. If you understand that formula you can understand where the cracks are and you can navigate around it to the benefit of the client but the reality of the situation is, as I usually tell my clients, how much do you want to pay the IRS and how much could you pay them if you absolutely had to? So between those two numbers we usually get a range and the more reasonable

Key Takeaways

the client is willing to be with the IRS, and some are not willing to be reasonable, but the more reasonable it is, generally speaking, the closer and lower cost it will be to deal with the issue.
I like to take the position that IRS collection cases are a marathon and not a sprint so the idea is I need to be actively working with my clients to conserve their resources to make sure that we’re doing the best we can to get them over the finish line.

Generally, What Is Brotman Law’s Strategy in IRS Collection Cases?

May 25, 2026July 9, 2020 by Brotman Law

Key Takeaways

Topic: Generally, What Is Brotman Law’s Strategy in IRS Collection Cases?
Generally, what I tell my clients is “throw whatever the IRS wants out the window and let us focus on you and your situation.
There is a certain amount that you are going to need to provide for yourself, to provide for your family, and to live the life that you’re accustomed to living.

Generally, what I tell my clients is “throw whatever the IRS wants out the window and let us focus on you and your situation. There is a certain amount that you are going to need to provide for yourself, to provide for your family, and to live the life that you’re accustomed to living. And once we figure out a way to sustain that or sustain that as much as reasonably possible, then we can worry about massaging the IRS into the equation. Ultimately, IRS Collection cases come down to two basic decisions.

The Different Steps in the IRS Collections Process

May 25, 2026July 8, 2020 by Brotman Law

There is a lot of confusion among many of my clients about the IRS collections process and what actions the IRS is able to legally take against the taxpayer. People who owe see a series of increasingly threatening letters and I often get panicked phone calls from taxpayers who think that the IRS is going to take their house because of the $5,000 balance they have accumulated.

Key Takeaways

There is a lot of confusion among many of my clients about the IRS collections process and what actions the IRS is able to legally take against the taxpayer.
To help soothe fears, I wanted to trace the lifecycle of a balance due to the IRS in order to better educate you on exactly how the IRS collections process works.
Generally, it takes approximately four weeks for the IRS to process a current tax return and eight weeks for the IRS to process a return for an older year. In some cases, however, there are a number of things that may cause a delay in a return being processed.

How a Tax Attorney Can Help With Your Income Taxes

May 25, 2026June 15, 2020 by Brotman Law

Most of the time, taxpayers can handle personal income taxes without too much trouble but there are times when a tax attorney can be either a handy resource or a required partner.

Key Takeaways

The IRS vs. The FTB
Two Big Reasons to Hire a Tax Attorney
When to Hire an Attorney
Frequently Asked Questions About Tax Attorneys
What Is the Difference Between a Tax Attorney and a CPA?