This means that the IRS is going to garnish your pay check for back taxes that you owe. There are a number of things that can be done to stop this from happening, depending on the details of your taxes and your current financial situation, including an Offer in Compromise, an Installment Agreement, and Bankruptcy. We handle this type of situation on a regular basis and are one of the few offices that handle both tax debt and consumer and business debt. This means that we may be able to help you explore options that are not readily available elsewhere.

Tax debt may be dischargeable through bankruptcy in certain cases, depending on what type of taxes are owed, when the taxes were due, and when the tax returns were filed. Even when tax debt is not dischargeable in bankruptcy, we may still be able to eliminate the penalties that have accrued, which in some cases may be a substantial portion of the debt. There are complex rules regarding handling tax debts, which apply to both federal and state taxes. This is an area of focus in our practice. We can discuss your options for discharging tax debt in bankruptcy, or using some other method to help you eliminate or get a handle on your tax situation if bankruptcy is not your best option.

A Distraint Warrant is issued when the taxes become delinquent and no payment is made in response to the delinquency notice. The warrant functions as a judgment against you and gives the state the right to garnish wages or bank accounts.

CNC or Currently Not Collectable Status may be obtainable from the IRS or state if you are able to demonstrate to their satisfaction that you are currently experiencing certain financial problems that would make it impossible to pay taxes due. This is something we may be able to help you with, and it is also something that tax payers are able to do on their own. Click here to go to our links page where you can find links for the IRS, and various state taxes boards.

No. Failure to file taxes is not a criminal act and you can’t be sent to jail because you have not filed your taxes. However, not filing taxes can lead to other problems. The IRS or state can put a lien on real property and garnish bank accounts or wages to satisfy outstanding balances. The cases you hear about where individuals have been sent to jail is where individuals knowingly committed acts such as tax evasion or fraud.

Yes, we can prepare and resubmit your offer. Often times an individual will qualify for an offer in compromise, but they don’t understand how the IRS analyses information or makes their decisions. Fortunately, we do understand. We have been able to get offers approved that were initially turned down. Your tax debt may also be dischargeable in a bankruptcy, or penalties may be eliminated through bankruptcy.

This is called a substitute return and can be filed by the IRS or state when an individual has not filed their own returns for several years. The income they show for you may not be accurate because they are only guessing at the amount of money you have earned and they will not credit you with any deductions. They obtain their information from various sources and this information may not be accurate. If you have had a substitute return filed for you and you now owe a significant amount of tax you should call us. We may be able to help you to resolve the situation.