Sarasota, FL: What To Do If You Can't Pay The Taxes

By
Services for Real Estate Pros with Suncoast Tax Solutions

I represent taxpayers in Tampa, St. Petersburg, Sarasota and throughout the state of Florida who have federal and state tax issues. Suncoast Tax Solutions is a full service tax resolution company helping clients resolve there IRS issues quickly and efficiently.

We know the story: things are tight financially, so you either 1) do not file the tax return or 2) file the return but don’t pay the balance due. But, do not worry, you tell yourself, next year will be better. Now it is 2 to 3 years later and a letter arrive from the IRS. The threats start. Maybe it has even gotten to the point of actual levy, lien and siezure activity. Now the IRS is wreaking havoc on your financial life and you simply do not know what to do.

We know. We have helped many clients through that exact scenario. Fear not, there is a light at the end of the tunnel.

As it turns out, the IRS is actually happy to work with taxpayers. However, there are some ground rules you need to be aware of and a roadmap to follow.

  1.        Tax Compliance

The first step in resolving your tax issue is to get into “tax compliance.” Compliance means that you have filed all tax returns due for the last 6 years and have made your current tax payments. Once you are in tax compliance, we can now work on resolving the back tax issue.

  1.        Collection Alternatives

There are 3 main collection alternatives to resolve a back tax debt: 1) Installment Agreement, 2) Uncollectible Status, and 3) Offer In Compromise.

Installment Agreement

An installment agreement is an agreement to pay the taxes back over time. There are 3 variations of the installment agreement: 1) Regular, 2) Streamlined, and 3) Partial Pay. The type of agreement that will work best for you will depend upon your personal circumstances and is something we can help you address when you are ready.

Uncollectible Status

Uncollectible status is when the IRS determines that you are unable to make current tax payments. When a taxpayer is deemed uncollectible, the IRS may still file a Notice of Federal Tax Lien to secure its position in the taxpayer’s assets but will not otherwise take enforcement action to seize (or levy) the taxpayer’s assets or income streams.

            Offer in Compromise

An Offer in Compromise is an agreement where the IRS agrees to accept less than the total amount owed to it and the taxpayer agrees to pay the amount negotiated as well as maintain his or her tax compliance for 5 years following the acceptance of the Offer in Compromise (“Offer”).

The basis for an offer is a formula referred to as “Reasonable Collection Potential” or “RCP”. RCP is effectively the net equity in assets plus the taxpayer’s excess future income for 12 or 24 months, depending upon how the Offer is structured. Significant planning can be done to help a taxpayer maximize the potential for the Offer’s acceptance.

If you, or someone you know, has an issue with paying their federal taxes and needs help to end their IRS nightmare, please contact us by either phone at 813-463-8348 or email at johnwood@suncoasttaxsolutioins.com.

 

John S. Wood, CPA

Suncoast Tax Solutions, LLC

1990 Main St., Suite 750

Sarasota, FL 34236

Phone: 813-463-8348

www.sunoasttaxsolutions.com

 

 

           

Comments (1)

Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

Great information.  Thanks for sharing and enjoy your weekend!

Mar 19, 2021 06:36 AM

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