IRS Back Taxes Misconceptions (Part 1)


If you owe the IRS back taxes, chances are you’re stressed, uncertain where to turn for help and worried about your future. You might feel like you’ve been backed into a corner. In recent years, the economy has shifted radically, in ways many of us never saw coming. Sadly, it’s become all too easy – and too common – for good people to fall into trouble or out of luck. Please, don’t feel like you’ve done something wrong, or that you’re alone out there.

Many times, it’s not your fault.

Millions of Americans owe back taxes – it’s an epidemic. Fortunately, there’s a cure. First, let’s put your mind at ease and give you some perspective on what you’re dealing with. Our job is revealing the little-known truths about owing the IRS.

We will explain how you can put your IRS problems and worries behind you, and get back to living a normal life. A life where you’re no longer “looking over your shoulder,” feeling hunted by the taxman. Should you have any questions, we’re available and easy to reach.

IRS Misconception #1:  The IRS Will Never Stop Trying To Collect My Tax Debt

This may be hard to wrap your mind around, but the IRS has a special program if you can’t pay your full tax liability or doing so creates a financial hardship – it’s called “an Offer in Compromise ”, or OIC. Once you are granted OIC status, the IRS will take no further action to collect your debt and you’re under no obligation to pay as long as you file and pay all future taxes on time. Your past debt will be “dismissed,” and you will be left in peace.

However, to keep your file in OIC status, you must be up to date on your current year’s taxes, with no exceptions. Failure to pay raises a red flag that will cause the IRS to reopen your closed file and (perhaps aggressively) attempt collection.

Are you eligible for an Offer in Compromise?

To obtain an Offer in Compromise, you must:

  • Meet IRS requirements which prove you don’t have the money to pay all your tax debt
  • Fill out ALL the necessary and relevant IRS forms
  • Know the exact language to use when communicating with the IRS

The reality is simple: The only way you can learn what IRS agents know is by moving up the ladder in the IRS collection department. Oddly enough, there is no opportunity for advanced tax education on any level, at any institution, anywhere in the United States that teaches you how to work with the IRS. However, IRS Revenue Officers have specialized knowledge that they are permitted to use as retirees. These retired IRS Revenue Officers are experts at negotiating and obtaining an Offer in Compromise for most people who owe back taxes – of any amount – large or small. Once your offer has been accepted, you can stop worrying about paying your entire past tax debt and pay only the offer settlement amount. Sometimes it’s just a fraction of what you really owed. It’s a huge relief, a real weight lifted off your shoulders.

IRS Misconception #2: I Only Get One Payment Arrangement With The IRS. I Have to Accept My Current Situation

Not true. In fact, you have clear and certain rights with the IRS. One of these rights is your ability to request changes to any existing arrangement. If you currently have an arrangement with the IRS, you can apply to change that arrangement. At any time, for any reason. Changing your arrangement, or having your offer in compromise file submitted properly is the surest path to settling tax debts you’re unable or can’t afford to pay. In fact, if your financial circumstances changed right this instant, you could call the IRS and request a different resolution.

For example, say you arranged a payment plan with the IRS yesterday. Today you come into work only to be handed a pink slip and told “thanks and good luck.” You can call the IRS right then and there and secure a more affordable payment plan. Ideally, we’d prepare and file an Offer in Compromise on your behalf. Once it is accepted that means you DO NOT HAVE TO PAY THE FULL AMOUNT OF WHAT YOU OWE.

And here’s another shocker: The IRS will agree in virtually every instance where you qualify, if you know exactly what to present and how to present it. Here at Taxpayers Clinic, that’s exactly what we do for our clients. We work proactively on your behalf to take control of your IRS situation and get the resolution that is right for you.

IRS Misconception #3: The IRS Doesn’t Waive Back Taxes, Ever.

Not true. Every single day of every single year, the IRS waives the collection of past due taxes for people who can’t afford to pay. The job of our professional staff – retired IRS Revenue Officers – is to present the IRS with a factually accurate representation of your inability to pay, and negotiate and obtain an Offer in Compromise for you. At Taxpayers Clinic, our retired IRS Collection Revenue Officers convey your situation to the IRS, in the way they require. If you don’t deliver the information in exactly the right way, you can almost hear the rubber stamp slamming down, imprinting “REJECTED” on your file.

IRS Misconception #4: The IRS Will Stop at Nothing to Get My Money and/or My Assets

Not true. If you can prove to the IRS, on their terms, using their forms, their language and their standards, that you cannot afford to pay, they have the ability to relieve you of your obligation to pay. And, they actually want to do that. Read that sentence again. The IRS actually wants to relieve you of your burden to pay IF you’re unable to pay. The IRS prefers to spend their time and resources chasing down people who can make payments. It’s a waste of their time and resources to keep running after people who don’t have the ability to pay them. Of course, the IRS will do everything and anything in their power to get you to pay. But as the old saying goes, you can’t get blood from a stone. And, they don’t want to waste their effort attempting to do so. If you truly can’t pay, they want to turn their attention elsewhere (what a huge relief for you, right?)

Hear this: the IRS is NOT out to destroy you financially. That’s why there are very clear and specific procedures for evaluating who can pay and who can’t. For those who can, they will work out a (reasonable) payment agreement. For those who can’t, the IRS will work with us to negotiate and obtain an Offer in Compromise for you. Note: If you have a payment agreement in place currently that you can’t afford to pay, we can help you negotiate a lower payment, or perhaps no payment at all. Our retired IRS Collection Revenue Officers are not only familiar with the process – it’s very simple for them to walk through it on your behalf. They have the experience and the know-how and, not only do they know exactly what the IRS wants to hear, they know how to present it so the IRS can take positive action on your behalf.

IRS back taxes tax misconceptions
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