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Ask The Taxman: I Owe $48,000 in Back Taxes Due To Bad Advice From A Neighbor, What Can I Do?

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Ask The Taxman:  I Owe $48,000 in Back Taxes Due To Bad Advice From A Neighbor, What Can I Do?

Ask The Taxman:  I Owe $48,000 in Back Taxes Due To Bad Advice From A Neighbor, What Can I Do?

Question:

My tax situation is a mess.  I made some money in real estate and was told I could avoid the taxes by employing a strategy given to me by my neighbor.  Turns out he was totally wrong and I used the money to pay off credit cards.  Now I owe the IRS $48,000 and I do not have it.   I barely break even every month.  What can I do?

Answer:

The first thing you should do is consult a qualified tax professional. Have that person review the returns to make sure the $48,000 balance is accurate and you did not miss something.   While you’re at it, have that person review your last three years returns for any opportunity to amend and get a refund.  Now is the time to try to find some money.

Secondly, the fact that you are telling me that you do not have any disposable income (Quote- “I barely break even every month”) or have other resources to pay the debt (Quote-“I don’t have it”), tells me that you may be a candidate for the Offer in Compromise program. Your situation may allow for a significant settle.

Offer In Compromise in a Nutshell

An Offer in Compromise is comprised of two parts, Disposable Income times a factor and equity in assets.  Since you are tell me that your disposable income is very low, that portion of the offer should also be low.  You also mentioned that you do not have any equity in assets by stating you do not have it.  The only way to know for sure is to run a financial analysis.

We deal with The Offers in Compromise Program daily. That’s our job- We are the Rescue Squad for Overtaxed and Troubled Taxpayers. Give us a call at 800-829-7483 and let us run that analysis.

Ask The Taxman: I Was Wondering, If Overtime is Considered In An Offer in Compromise?

How Does The Collection Statute Expiration Date (CSED) Affect You?

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