Realtors® Who Owe Money to IRS

By
Services for Real Estate Pros with Tudor Financial Group, LLC

I must share some exciting news with you. This might benefit you or it might benefit some of your clients, friends or colleagues. Most of us have had clients unable to purchase or refinance a property because their tax debts with IRS have presented problems. It doesn’t have to be this way--we can help remove the obstacles.

Many self-employed individuals have had very profitable years in 2019 and 2020. Many of these people did not properly prepare to pay the additional taxes which go along with this windfall of earnings. Recently, we had a real estate professional contact our office after she had filed her 2019 Federal and Arizona income tax returns. She owes IRS about $115,000, and she isn’t able to pay the liability. However, because of changes IRS made (per IR-2020-248), we can now set-up an installment agreement without providing any financial or asset information and without having a tax lien filed. This is an exciting development which will help many people who are struggling with significant cash flow problems due to COVID.

The revised COVID-related collection procedures will be helpful to taxpayers, especially those who have a past record of filing their returns and paying their taxes on time. Among the highlights of the Taxpayer Relief Initiative:

  • Taxpayers who qualify for a short-term payment plan option may now have up to 180 days to resolve their tax liabilities instead of 120 days.
  • The IRS is offering flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted Offer in Compromise.
  • The IRS will automatically add certain new tax balances to existing Installment Agreements, for individual and out of business taxpayers. This taxpayer-friendly approach will occur instead of defaulting the agreement, which can complicate matters for those trying to pay their taxes.
  • To reduce burden, certain qualified individual taxpayers who owe less than $250,000 may set up Installment Agreements without providing a financial statement or substantiation if their monthly payment proposal is sufficient. 
  • Some individual taxpayers who only owe for the 2019 tax year and who owe less than $250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS.
  • Additionally, qualified taxpayers with existing Direct Debit Installment Agreements may now be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates.

Many of the states (including Arizona) are working hard to settle state tax debts as well. If you (or someone you know) have been feeling paralyzed when it comes to resolving tax issues, reach out to us and let us get started working on resolving your tax problems. You won’t even have to talk with IRS at all, we will do the work necessary to relieve a lot of your stress. There has never been a better time to tackle your IRS problems. The sooner you get started, the more options you have in settling your tax debt.

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Rainmaker
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Randy Tudor, EA, CTRC

Certified Tax Representation Consultant in Phoenix
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