Tax Debt Attorney

What a tax debt attorney does that a tax relief company does not

The difference is who is on the file: a licensed attorney who signs Form 2848 and answers to the State Bar, or a salesperson who quoted you a settlement before anyone looked at your bank statements. Form 2848 is the IRS power of attorney, and only the person named on it can speak to the IRS about your account. At most tax relief companies the person who took your call is not on the 2848, the file goes to an enrolled agent or a preparer you have not met, and the “pennies on the dollar” figure came from a script. The IRS lists offer in compromise mills among its Dirty Dozen tax scams, and the Federal Trade Commission and the California Attorney General have both sued tax relief companies over settlements they could not deliver.

An attorney is different in three ways. What you tell us is privileged, which matters when there are unfiled returns behind the balance. We can take the case past the agency, to IRS Appeals and, in a Collection Due Process case, to the Tax Court. And we run the numbers before we recommend anything, because an offer the math does not support costs you the deposit, the fee and a year. Call it a tax relief attorney, a tax resolution attorney or a back taxes attorney; the work is the same.

The notices that mean collection has started

The IRS tells you in writing before it takes anything, and the letters arrive in a fixed order. CP14, CP501 and CP503 are the bill and the reminders. CP504 is the Notice of Intent to Levy under section 6331(d) of the Internal Revenue Code, which reaches only a state tax refund. The letter that matters is the LT11 or Letter 1058, the Final Notice of Intent to Levy and Notice of Your Right to a Hearing under section 6330, which opens a 30-day window to request a Collection Due Process hearing on Form 12153. Letter 3172 does the same for a lien filing under section 6320.

The stakes are set by statute. Under section 6321 a federal tax lien attaches to everything you own once the tax is assessed and unpaid, under section 6331 the IRS can levy wages, bank accounts and receivables after the notices above have run, and under section 6502 it has ten years from assessment to collect, the Collection Statute Expiration Date. The FTB’s Notice of State Income Tax Due (FTB 4963) is the demand, there is no California version of a CDP hearing, and under Revenue and Taxation Code section 19255 the FTB has 20 years from the date the liability became due and payable.

The IRS menu: seven ways a tax debt gets resolved

Every IRS balance ends one of seven ways, and each has its own form, financial test and effect on the ten-year clock.

• Installment agreement under section 6159. Owe $50,000 or less with every return filed and you can set one up online, with no financial statement and up to 72 months to pay. Above that it is Form 9465 with a Form 433-F financial statement. A pending request stops levies under section 6331(k).
• Partial payment installment agreement. Same statute, different math: the payments will not retire the debt before the statute expires, and the rest dies with it. This is the quiet workhorse of collections practice.
• Currently not collectible status. When the Standards leave nothing to pay with, the IRS stops enforcement. Nothing is forgiven, interest runs, refunds are kept, and the clock keeps moving.
• Offer in compromise under section 7122: Form 656, Form 433-A (OIC), a $205 fee and a 20 percent deposit. The IRS accepts when the offer meets your Reasonable Collection Potential, and the math is on our offer in compromise attorney page.
• Penalty abatement. First-time abatement removes the failure-to-file and failure-to-pay penalties for one period when the prior three years were clean, usually by phone. Reasonable cause under section 6651(a) takes a written showing of what happened, on Form 843.
• Collection Due Process hearing. Form 12153 within 30 days of the LT11, Letter 1058 or Letter 3172. Enforcement stops while Appeals reviews the case under section 6330(e), and a bad determination goes to the Tax Court within 30 days.
• The statute itself. The ten years under section 6502 pause while an offer, a CDP hearing or a bankruptcy is pending, so every filing above costs months. Sometimes the right answer is currently not collectible status and patience.

The California versions

California’s three agencies offer installment agreements, hardship relief and offers in compromise, and none of them work the way the IRS programs do. The FTB grants installment agreements under Revenue and Taxation Code section 19008: you can apply online if you owe $25,000 or less, can pay within 60 months and have filed the last five years, for a $34 fee and a possible lien. The FTB’s offer in compromise (FTB 4905PIT for individuals, FTB 4905BE for businesses) has to be a lump sum, and the FTB may keep collecting while it is pending. The FTB modifies garnishments and levies for hardship but does not reduce the balance.

The EDD’s offer program under Unemployment Insurance Code section 1870 is for closed businesses and for owners assessed personally under section 1735, and it requires showing that your income cannot cover more than the accruing interest plus 6.7 percent of the balance a year. The CDTFA’s offer (CDTFA-490) is likewise built for closed accounts, with a narrow exception through January 1, 2028 for operating businesses. When you owe more than one agency we build one set of numbers so that what you pay the IRS is counted when the FTB looks at your budget. The state side is in our guide to FTB collections.

How the engagement runs, stage by stage

We stop the enforcement first, get the numbers right second and file for the option that fits third, because filing in the wrong order is how people end up with a rejected offer and a fresh levy. In the first week we file the powers of attorney (Form 2848 for the IRS, FTB 3520-PIT, the EDD’s DE 48 and CDTFA-392), pull your account transcripts and compute the statute date for every year. The transcripts often show a number the IRS got wrong or a penalty that first-time abatement removes with one call, and if a levy is running that call happens the same day.

In weeks two through six we build the financial statement, so you gather three months of bank statements and pay stubs, the mortgage or lease, vehicle loans, insurance, medical costs and child support. Then we file. A streamlined agreement is usually approved within days, currently not collectible status takes a few weeks, an offer takes six to twelve months and sometimes more, and a CDP hearing typically reaches a determination in six to nine months. Those are ranges rather than promises. Every option, with its trade-offs, is laid out in our tax debt resolution guide.

How much does a tax debt attorney cost?

Most of our collections engagements are a flat fee quoted before we start. Defined projects start at $3,500, and our most common structure is a monthly flat fee, also from $3,500, spread into equal payments that pause while we wait on the agency. The full breakdown is on our tax attorney cost page.

Can the IRS really settle for less than I owe?

Yes, through an offer in compromise under section 7122 of the Internal Revenue Code, but only when your Reasonable Collection Potential is below the balance. The IRS accepted 5,464 offers in fiscal year 2025 against 38,797 proposed. If you own a home with equity or your income is rising, an installment agreement or hardship status usually beats a rejected offer.

How long does the IRS have to collect back taxes?

Ten years from the date of assessment under section 6502 of the Internal Revenue Code, paused while an offer in compromise, a CDP hearing or a bankruptcy is pending. The FTB has 20 years from the due-and-payable date under Revenue and Taxation Code section 19255, so waiting out the state is rarely a plan.