My finances are a mess, an absolute mess. And my taxes? Even worse! I’ve done exceptionally well in real estate these past two years and used my profits to pay off debts I’d accumulated from previous failed business ventures. Now, after following bad tax advice from a neighbor, I’m discovering that my gains weren’t tax-free. I’m in the hole $55,000 in back taxes, and there’s no way I can pay it! I just got finished paying off my old debts. What can I do?
I know how you feel. It’s as if you thought you solved one problem only to discover the cure for the old problem has its own disease. But first, calm down. Things aren’t nearly as bad as you might think. You have many options available to you.
The first thing you should do is consult a qualified tax professional. He or she will review your previous tax returns to ensure that the $55,000 you believe you owe is the right amount. After all, why pay Uncle Sam any more than he legally deserves?
Now, considering that you’re saying you do not have the resources to pay the tax debt, the Offer in Compromise program is probably your best bet. Believe it or not, this program allows taxpayers to reduce their debt by a significant amount! Why? Because over time the IRS has learned that working with taxpayers is a more effective way to collect taxes than beating down doors.
Here’s how the Offer in Compromise program works:
Once your qualified tax professional knows exactly what you owe, he or she will approach the IRS with an offer – a reasonable amount that you can pay. Oftentimes, the IRS will accept an amount significantly less than the full amount!
It’s really that simple, and it’s a program more taxpayers would take advantage of if they knew it was available to them.
We deal with Offers in Compromise daily. That’s our job — We are IRS Problem Solvers. For a confidential, FREE and no-risk consultation, call our office at 303-753-6040 or contact us.