Whom can I trust to help me with my owing IRS?
March 20, 2016 11:13 PM   Subscribe

I want to do the right thing: pay what I owe. Yet, I don't know who would be on my side! A tax preparer? An accountant, CPA, tax attorney, someone else? The years have caught up to me, true, but how will I live once I've acknowledged my debt? Can I pay my bills and the person/company helping me before the IRS freezes or sucks money out of my account? What if my "income" comes not from a job, rather a will/trust account? Add to this Obamacare and recently, a state tax. I am frightened. I figure I'll pay until the day I die. How many years will that be?

I have no qualms with discussing further details, but know this is going out over the internet and that its forever 'out there'. I am afraid. I am simply seeking SOME information, SOME direction with which to steer. I have received a "Notice of intent to levy, Intent to seize your property or rights to property...on or after March 25, 2016." Today is March 20th. Any assistance, guidance, even compassion would be monumental in helping me save myself. Thanks.
posted by anonymous to Law & Government (21 answers total) 6 users marked this as a favorite
Start with an enrolled agent http://www.naea.org/taxpayers/what-enrolled-agent
posted by Sophont at 11:46 PM on March 20, 2016 [3 favorites]

This is serious, I'm guessing you've ignored several mailings so far. Do not sleep this one out.

As from the URL above, call a tax person or people tomorrow and tell them what's up: how much, how many years, whether you've been filing, etc. They can get you on a payment plan, and if they can't, call another tax person. AFAIK, 99% of your options are: payment plan. The IRS doesn't do anything like "Hey, can you chill out for a while and call again in a year?"

Alternatively, if you are all caught up on your filings and just have a chunk of money to pay, you can also get on a payment plan by calling the IRS directly. The minimum monthly payment is $X/60, as 5 years is the maximum length of a payment plan. The person on the other end of the line will know your total. Typical hold times at the IRS are 45-60min, and if you call them you will definitely wonder this at some point.

I have been through all of this and more. Your trust fund situation might complicate things, but a tax person will tell you call a tax lawyer if it turns out to be necessary, and I think you can trust that progression. If you get a tax lawyer, ask about making an offer, which will be some fraction of what you owe that serves to settle the whole thing. You'll have certain responsibilities about filing and staying paid up, but aside from that it will get the whole deal off your back.

Good luck!
posted by rhizome at 12:14 AM on March 21, 2016 [12 favorites]

You are doing the right thing and even if your monthly payment is very high, you are going to feel a lot better after setting it up. Once you know the amount you need to pay and what your financial situation really is, you might want to post here again and we can help you with your new budget.
posted by chaiminda at 3:11 AM on March 21, 2016

Either a tax attorney or a CPA would work. You can also deal with the IRS individually but it sounds like you need someone who has some experience to help you sort this out. If you're in the Cleveland area by any chance I have a name for you.
posted by chesty_a_arthur at 4:29 AM on March 21, 2016

How much are we talking about? Under $10,000 call the IRS and establish a payment plan with them. I've found them to be helpful and courteous about helping. Back in my wild days, I owed the IRS, and they negotiated a monthly payment that, while not a pittance, still allowed me to live.

Honest, they're not out to get you.

If you owe more than $10,000, you should probably work with a CPA/Tax Attorney (who IS a CPA.)

Even if you're getting a lawyer, call the IRS, acknowledge that you're taking action and establish lines of communication.
posted by Ruthless Bunny at 5:21 AM on March 21, 2016 [9 favorites]

+1 on talking to the IRS. Call them. They will not yell at you.
posted by chesty_a_arthur at 6:02 AM on March 21, 2016 [1 favorite]

+2. I owed almost $20,000 (which I finally paid off last month, yay!) and dealt directly with them after receiving a notice that my paycheck was going to be garnished. It took me several panic attacks to get through it, but that wasn't because of them. They were perfectly pleasant and respectful every time I dealt with them. Zero scolding.

If you have the means to work with a lawyer or CPA to negotiate terms, by all means do so. But if you're not able to, don't feel like you can't talk directly to the IRS. When you talk to them about a payment plan, the first question they will probably ask you is how much you *think* you can pay each month. You'll probably end up paying more than that, but they don't want to break or starve you. They just want you to pay them back over time.
posted by mudpuppie at 6:57 AM on March 21, 2016 [6 favorites]

Notice of intent to levy, Intent to seize your property or rights to property

I've gotten these, and I wasn't even that behind. The IRS is desperately underfunded and likes to light a fire under people. Which isn't to say you should downplay this at all but just to say... it will be okay and it happens to a lot of people. They did not take my house, at all. I called them and said "OK what do we need to do to make this right" and we worked out a plan.

So, in this case I'd be calling the IRS today and just saying "I got your letter, I am talking to a professional, let's talk about the timeline here...." and then finding a tax person to help you straighten out what you owe. Think about what you could pay them every month. Just making the call and starting the process will stop the "We will take your house!" letters from coming.

Keep in mind that you may need to have this same conversation with the state tax people as the federal tax people. Keep good notes. Write down who you talked with and what they said and what you agreed to. The most nervewracking thing for me was that they said "OK we have a payment plan, we'll send a letter" but that letter was due AFTER the time when they would (supposedly) come take my house. It's scary as fuck but there's a certain amount of trusting that needs to happen which I was totally not ready for but did wind up working out.

It will be okay. Make the call today.
posted by jessamyn at 7:29 AM on March 21, 2016 [7 favorites]

Tagging on to Jessamyn: Having the information will be less scary than what's going on in your deepest fears. Having the correct information is always always always better than imagining what the information might be. Because then you can make a plan to deal with it.

Call the IRS today. The number on the letter. Tell them you're calling a CPA/tax attorney next, because that is exactly what you need to do next. You can do it. I know you can. I've been there too. No one scolded me--not the IRS or the CPA. You're going to set yourself free just by making the plan, ok? And then you'll make the payments, and it'll be alright.
posted by ImproviseOrDie at 8:00 AM on March 21, 2016 [2 favorites]

Another thing to keep in mind is that your actual taxes are likely to be significantly less than what the IRS is assuming in the letters you have received. If you do not file, then they assume the worst case, that all of the unreported income is taxable and that there are no deductions. They have to assume that because you have given them no information to assume otherwise. So get a tax preparer to do your returns and you might find that you owe much less than you think.
posted by JackFlash at 8:27 AM on March 21, 2016 [2 favorites]

We had a mixup with the IRS two years ago that led to them sending us a demand for $20k of taxes owed when paperwork related to our IRA went astray and they didn't send us a replacement before tax time.

It took a while on the phone, but every IRS agent I spoke to was helpful and courteous and efficient, and we got it sorted out in the end. It was more of a hassle than anything else. So yes, just hop on the phone now, before the wait times get tied up nearer to April.
posted by vickyverky at 9:31 AM on March 21, 2016

Just to add to what everybody is saying:

The people who work at the IRS are civil servants. They work for you. They audit and deal with the taxes of people who are not wealthy, but the only people they're trying to "get" are the big tax cheaters and malevolent players. There are no high-fives at the office for nailing a couple who owes $5,000. They always try to work with taxpayers when they can; they don't want to take you to court if it can possibly be avoided.

I know people have been making the IRS to be a big scary organization who hates regular people for years, but it's just not true. The IRS is full of people who believe in what they do, which is more focused on preventing the theft of your money, because tax money is your money too: when some company pulls shenanigans and doesn't pay $200,000 in taxes, that's your money being stolen. They don't have malice towards you. If they sound scary sometimes, it's because people have been fomenting hostility towards them for years.
posted by Strudel at 10:06 AM on March 21, 2016 [2 favorites]

I work in corporate taxes, and honestly, as jessamyn states: these notices are not uncommon. The initial notice gets sent to the registered agent, or a work site, and gets misplaced. They need to enter the court system to get an officer to track down the right person, but they also don't want to incur the fees of the court system.

As long as they know the right person is addressing the issue, they're typically more than happy to take it off the list that's being entered into court.

You will probably need a tax preparer to prepare and file your prior year returns. A CPA is not necessarily the right person for this, since you don't need income tax knowledge to get your CPA. Find someone with experience filing amended returns. Once you do this, JackFlash is right, the amount will probably come down. They are estimating your liability at the highest possible amount.

If the number is still significant, you might want a tax lawyer to negotiate. But ask their assessment of your position. With a trust, you have a much weaker position than most. At the very least, request penalty and interest be waived.
posted by politikitty at 10:55 AM on March 21, 2016 [1 favorite]

Forgot to add:

Call now. Don't worry if you don't have your ducks in a row. Just pick up the phone and say that you've received the Notice to Levy. Ask what years it is for. Ask them what they need from you. Ask them when they need a response to avoid a Lien being put in the system.

Let them know that you are reaching out for help, and you will get back to them by that date.
posted by politikitty at 11:01 AM on March 21, 2016 [1 favorite]

Yeah, just call the IRS. I did just that, they're very helpful. I got a payment plan, and used www.officialpayments.com to automatically remit payments every month. It was so easy and painless I felt a little silly over freaking out beforehand.
posted by monospace at 11:11 AM on March 21, 2016

Also, you imply that your only income has been from a trust. In that case you should have been receiving Schedule K-1 from the trustee or fiduciary each year, which is equivalent of a W-2 from an employer. If you don't still have these forms for each year, then you can request copies from the trustee, or worst case directly from the IRS.

The good news is that a K-1 is a very simple document and means that your tax returns should be very simple. You don't owe payroll (FICA) taxes. You only owe simple income tax. It is likely that at least some of the income you received from the trust is qualified dividends which are taxed at a lower rate than earned income.

If you haven't filed a return, the IRS can technically go back 10 years, but in practice, the IRS only goes back 6 years worst case.
posted by JackFlash at 11:29 AM on March 21, 2016 [1 favorite]

Nth-ing everything above. Call the IRS. Talk to an enrolled agent.

The thing to take away from this thread is that you are not the only person that's done this. When I first started receiving notices from the IRS about the years that I was behind, one of the biggest parts of my panic attacks was "oh, god, no one else will understand what's happening, how can I talk to anyone and get advice?". You're not alone. A bunch of people have gone through, are going through, or will go through the same thing. You can totally do this.
posted by hanov3r at 12:27 PM on March 21, 2016 [2 favorites]

I used the tax law firm behind IRSMedic.com. Can't vouch for the entire firm but the folks who worked with me were great.
posted by Bella Donna at 1:33 PM on March 21, 2016

+1 on talking to the IRS. Call them. They will not yell at you.

This is true, but they will also want you to sign up for some kind of resolution RIGHT NOW PLEASE, without any consideration of whether you'd like to explore your options. They will not detail your options, only the one that is quickest to get you on. Sure, you'd have to sit on hold again, but you have to be able to say, "let me call you back," if you don't quite yet have your ducks in a row.

CPA is overkill for this. Tax lawyer is overkill until someone who knows more tells you to go there. Seriously, you don't email Tim Cook when you have trouble getting your email, you don't need to become a client at $500/hr just yet. OP is in a dire predicament, but it's one that has well-mapped solutions.
posted by rhizome at 1:39 PM on March 21, 2016 [1 favorite]

if you get a tax lawyer, ask about making an offer, which will be some fraction of what you owe that serves to settle the whole thing.

Yes. It's called an OIC ("offer in compromise") and is common enough that it has its own acronym. They'd rather get something than nothing, so don't assume you have to pay the whole amount, or agree to off the bat.
posted by drjimmy11 at 5:02 PM on March 21, 2016

Call them and ask them to put a hold on collections while you sort this out, especially if you are behind on filing past year returns and the amount owed might change. I have had to talk to the IRS about many things with regards to a family member's estate, including penalties, and I have received letters like this while various returns and appeals have gone back and forth in the mail. Every time, I have called and asked them to put a hold on collections until the return is processed or the appeal is decided, and every time the very friendly, nice agent has done so.

Call the number on the notice. Do it today. Then call a CPA and ask for help. If you are in NY State, feel free to MeMail me for a CPA recommendation.
posted by bedhead at 10:17 AM on March 22, 2016 [2 favorites]

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