Owing back taxes to the Internal Revenue Service (IRS) or the California Franchise Tax Board (FTB) can be stressful and overwhelming, especially for individuals who aren’t familiar with federal and state tax laws and the various settlement options available to taxpayers with a delinquent tax balance, and it doesn’t take much for these tax debts to become insurmountable, especially if they accumulate over several years. If you owe back taxes to the IRS or California FTB and you want to be proactive in resolving the debts and avoid harassing collection actions, our seasoned debt relief attorneys may be able to settle your tax debts for less than what you owe. At Resnik Hayes Moradi LLP, our knowledgeable debt relief attorneys have earned a reputation for protecting the rights of clients in Los Angeles and throughout Southern California and helping them resolve their tax debt and tax settlement issues. Contact our law firm today to schedule a free initial consultation with our team of trusted Los Angeles tax settlement attorneys.
Skilled Los Angeles Tax Settlement Attorneys
Despite what you may want to believe, problems with the IRS do not go away on their own, which is why you must be proactive and take the appropriate action to settle your tax debts. In fact, waiting for the IRS to contact you about unpaid back taxes can result in additional problems that will only exacerbate your already problematic financial situation, possibly including wage garnishment or the IRS levying against your bank account to collect on the unpaid debt. That is where the skill and expertise of a seasoned Los Angeles tax settlement and debt relief attorney comes in handy. It is our primary goal at Resnik Hayes Moradi LLP to accurately assess the nature and extent of your tax issues and help you achieve the best possible outcome for your specific financial situation, whether that means negotiating a tax settlement on your behalf or eliminating an IRS wage garnishment action, IRS bank levy or IRS tax lien. Our debt relief attorneys understand that every tax settlement case in Los Angeles is different, with unique circumstances that require our individualized attention and legal expertise, and we can answer any questions you have about the tax settlement and debt relief options available to you in Southern California.
What is Tax Settlement?
When it comes to collecting unpaid back taxes owed to the IRS or the California Franchise Tax Board, a tax settlement is an agreement between the tax authority and the taxpayer that allows the taxpayer to settle an outstanding debt for less than the total amount of the debt owed or to find some other means of paying back the unpaid taxes over time. This type of agreement is possible in situations where certain extenuating circumstances prevent the taxpayer from paying back the debt in full, in which case the taxpayer has the opportunity to pay a lower amount to the tax authority or secure more time to pay, while avoiding tax liens, wage garnishment, bank levies, and other collection actions.
A tax lien is a legal claim the government makes against a property you own when you are delinquent on a tax debt you owe the IRS. With a tax lien, the IRS does not seize your property or assets, it merely makes a claim against your home or other property to protect its interest against the tax debt you owe. With the help of our knowledgeable tax settlement attorneys, you may be able to deal with an IRS tax lien without having your properties and assets seized by the IRS.
If you have a delinquent balance with the IRS, you could end up facing an IRS tax levy, which can be issued against any property or assets you own or have the right to own, including your home, vehicle, wages, bank accounts, and retirement funds. There are two main types of tax levies in Los Angeles: wage garnishment, in which the IRS can withhold funds from your paycheck each pay period, and a levy on your bank accounts, in which the IRS can access and withdraw funds directly from your accounts to pay off your tax debts. If you fail to pay your overdue taxes, the IRS has the right to issue a tax levy and seize your property and assets in order to satisfy your outstanding tax debt.
Los Angeles Tax Settlement Solutions
If you owe unpaid federal or state tax debts to the IRS or the California Franchise Tax Board, you may think that your only option is to pay the unpaid taxes in full. On the contrary, there are a number of state and federal programs in place that allow Los Angeles taxpayers who don’t have the assets or income to pay off their tax debt in a reasonable amount of time, the opportunity to settle the debt by paying less than the full amount owed, or by paying the taxes back over a period of time. If you are faced with significant tax debt and you don’t have the means to pay it back, there are five main ways in which you can settle your tax debts with the IRS or the California Franchise Tax Board.
Offer in Compromise (OIC)
Offer in Compromise is a debt relief program for Los Angeles taxpayers who want to settle their tax debts with the IRS or the California Franchise Tax Board for less than the balance that was originally due. In order to qualify for an OIC, also known as a tax settlement, you must meet certain financial criteria, which our debt relief attorneys can help you determine. If you owe back taxes to the IRS and you don’t have the income or assets to pay the amount you owe, your best course of action would be to consult an experienced Los Angeles tax settlement attorney to discuss your legal options. You may be able to settle your tax liabilities by paying less than the total amount due if the tax authority agrees to an Offer in Compromise tax settlement.
If you can’t afford to pay the taxes you owe to the IRS or the California Franchise Tax Board in one lump sum, you may be eligible for an installment plan, which allows qualifying taxpayers to pay back their tax debts by making payments over a specified period of time, typically no longer than 60 months, without the threat of collection actions.
Currently Not Collectible (Hardship)
Many taxpayers in Los Angeles who have outstanding tax debts are also facing significant financial hardship. That is why the IRS has a hardship program in place that goes into effect when an account enters “Currently Not Collectible” (CNC) status. This essentially means that paying the tax debt would adversely impact your ability to cover essential living expenses, such as rent, groceries and utilities. When your account is classified as CNC under the IRS hardship program, the IRS will hold off on collecting the unpaid taxes for a period of time, and during that time, will no longer pursue collection actions against you (i.e. wage garnishment, tax liens or tax levies) in an effort to settle the tax debt.
Partial Payment Installment Agreement (PPIA)
For taxpayers who are unable to pay the full amount of taxes they owe to the IRS, a partial payment installment agreement (PPIA) may be an option. Similar to a regular installment agreement, a PPIA allows you to make monthly payments for back taxes owed to the IRS, with one major difference: you will only end up paying back a portion of the taxes you owe, rather than the full balance due on your account.
Filing for Bankruptcy
Because of the stigma associated with filing for bankruptcy, many taxpayers struggling with significant tax debts consider bankruptcy as a last resort – an option to contemplate when all other debt relief options have failed. On the contrary, bankruptcy is a viable solution for the financial hardship many individuals in Los Angeles and throughout Southern California face due to tax liability and other debts. Although priority tax debts, or tax debts that have been due for less than three years, are not dischargeable in Chapter 7 bankruptcy, credit card debt, medical bills, non-priority tax debts, and other unsecured debts are, and if you can get these debts discharged, it may help you pay back the priority taxes you owe to the IRS. If you file for Chapter 13 bankruptcy in Los Angeles, you can have your tax debts reorganized into a manageable repayment plan that allows you to pay back your tax debts over the course of three to five years. When you file for Chapter 7 or Chapter 13 bankruptcy in Los Angeles, an automatic stay goes into effect, which protects you from harassing creditor calls, foreclosure, debt collection lawsuits and other collection actions for the debts you owe.
Statute of Limitations for Collecting on Tax Debts
Much like credit card debt, there is a statute of limitations on collection actions for unpaid tax debts in Los Angeles, meaning the California Franchise Tax Board and the IRS only have a certain amount of time to collect an outstanding tax debt from you. Pursuant to a bill passed in 2006, the FTB has 20 years to collect a tax debt, which is double the amount of time the IRS has to collect on an unpaid tax debt. The statute of limitations for collecting tax debts begins on the date the tax liability becomes due and payable, otherwise known as the statutory lien date, and there are certain actions that can suspend or extend the statute of limitations, including a bankruptcy filing or an approved tax debt installment agreement.
Why Hire a Debt Relief Attorney?
If you owe back taxes to the IRS and you don’t have the means to pay your tax debts in the foreseeable future, you may be able to settle your tax debts for less than what you owe the IRS with the help of a knowledgeable Los Angeles debt relief attorney. Many people think they can handle their tax debt problems on their own, but this is one area where it pays to have a professional handling your case for you. Our attorneys at Resnik Hayes Moradi LLP can represent you in your tax debt case and help you negotiate a tax settlement agreement for the unpaid back taxes you owe the IRS while putting a stop to wage garnishment, bank levies and other damaging collection actions that can end up putting you further in debt.
Significant tax debt is something that can affect every aspect of your life and even if you decide you want to deal with the debts you owe the IRS once and for all, it can be difficult to know which debt relief option is right for you, especially if you don’t have a clear understanding of the intricacies of California tax law, IRS practice and procedure, bankruptcy filings and debt relief options. Our reputable legal team at Resnik Hayes Moradi LLP is experienced in all areas of Los Angeles bankruptcy and debt relief and offers prospective clients a free initial tax settlement consultation, which means you can discuss your tax debt case with knowledgeable Los Angeles bankruptcy attorneys and debt relief attorneys at no charge or obligation to you.
Contact Our Los Angeles Tax Settlement Attorneys Today
Los Angeles taxpayers who are unable to pay back outstanding tax debts or those struggling under the burden of other overwhelming debt may be able to negotiate a favorable tax settlement agreement with the IRS or the California FTB to pay back less than they owe or to pay their unpaid tax debts over time. No matter how dire your tax debt situation may seem, you are not alone, and you have options for settling your debt. Our skilled and compassionate debt relief attorneys at Resnik Hayes Moradi LLP have extensive experience helping clients in Los Angeles and the surrounding area resolve their tax debts and we can negotiate the best possible tax relief solution for you based on your specific financial circumstances. Contact Resnik Hayes Moradi LLP today to find out how we can help.
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