Prior to the pandemic, if you owed anything over $50k to the IRS, you were required to disclose every detail of your finances. This includes all sources of income, expenses, and all assets.
For high income individuals especially, this is a nightmare.
If your “disposable income” comes out to $10k per month, that’s what the IRS would require. If you have a house with $100k in equity - the equity is up for grabs.
Under the new pandemic rules, things have changed…
Here's your Back Tax Pro Tip of the Day: Take advantage of the Taxpayer Relief Initiative where full financial disclosure is not required for balances of $250k and below.
After sufficient negotiation, and managerial approval, if the taxpayer can pay the IRS a monthly amount that will pay off the balance owed before the Statute of Limitations dates, the IRS very likely will agree to it.
The payment plan very well may turn out to be FAR less than what the IRS would require under a financial disclosure.
This change makes a huge difference for high income taxpayers who otherwise be forced to make exorbitant payments to the IRS and/or pull out equity in assets.
But there’s one caveat - the Tax Relief Initiative is temporary. We have no idea how long it will be in place. If you put your head in the sand, the rule may be gone by the time you come up for air and it will be back to full financial disclosure.
#BackTaxProTipoftheDay #TaxpayerReliefInitiative #TheWTaxGroup