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What Are My Options If I Owe More Taxes Than I Can Afford? 

Law Office of Scott N. Tisevich  Nov. 3, 2022

Woman Filling Us 1040 Tax Form 2018 YearU.S. citizens or lawful permanent residents living and working in the United States are required to file their income tax returns annually. Failure to file or pay taxes may result in potential penalties, interests, and other legal actions against you. However, many individuals often fail to delay filing their taxes because they owe the IRS more than they can afford to pay. A strategic Nevada tax attorney can walk you through your options to achieve tax debt relief when overwhelmed with back taxes.  

The Law Office of Scott N. Tisevich can provide straightforward legal direction and reliable advocacy to clients in tax-related matters. Attorney Scott N. Tisevich can discuss your specific circumstances, explore your options to pay past due taxes, and devise a suitable plan to help resolve your tax issues. The firm is proud to serve clients across Reno, Las Vegas, Carson City, Lyon County, Churchill County, Douglas County, and Story County, Nevada. 

The IRS Collection Process 

The IRS may be eligible to take some legal steps or actions to recover tax debts from individuals and businesses that fail to pay their past-due taxes voluntarily and on time. To commence the IRS collection process, the tax authorities will send a bill – indicating the tax debt, interests, and penalties – to the defaulting taxpayer. The bill will keep coming until the taxpayer: 

  • Makes full payment of the tax debts. 

  • Satisfies their tax accounts. 

However, once the collection period expires – usually ten years – the IRS will be unable to recover past due taxes legally. Here are the other steps involved in the IRS collection process: 

First Notice (Bill) 

The first notice (bill) is a letter from the IRS stating your tax debt balance, accumulated interests, and penalties. The bill will also include your available payment options. 

Payment Plan 

In the event that the defaulting taxpayer doesn’t have the resources to fully pay their tax debts right away, they may be eligible for a long-term or short-term payment plan. 

Final Bill 

Additionally, the taxpayer will receive a final bill if: 

  • They fail to settle the back taxes using the payment plan. 

  • They fail to respond to the notification or reach out to the tax authorities. 

However, the IRS may be entitled to take further legal action to recover the tax debt balance if the taxpayer ignores the final bill. An experienced attorney can evaluate your unique situation and enlighten you about your available payment options. 

Payment Options 

Here are your available options to seek tax debt relief when owing the tax authorities more than you can afford to pay in back taxes: 

Payment Plans 

Taxpayers who are unable to pay the full balance immediately may request additional time through a short-term and long-term payment plan. 

Long-term Payment Plan: A long-term payment plan or Direct Debit Installment Agreement (DDIA) is available to taxpayers owing less than $50,000 in combined tax, penalties, and interest. 

Short-term Payment Plan: A short-term payment plan is available for taxpayers owing $100,000 or less in combined tax, penalties, and interest. The plan lasts for 180 days or less. 

Offer in Compromise 

Offer in compromise (OIC) can be described as an agreement between the IRS and a taxpayer that permits the taxpayer to settle their past-due taxes by paying less than the actual amount owed. It involves negotiating with the tax authorities to pay an agreed-upon reduced sum. 

What’s more, an offer in compromise may be the ideal option for taxpayers who owe more than they can afford to pay or those who may face financial distress if they pay their full tax liability. 

Delay Collection 

Alternatively, through delay collection, the taxpayer may be eligible to request the IRS to withhold their collection efforts temporarily until they are financially stable enough to settle their past-due debts. Delay collection may be the ideal option for taxpayers who may experience difficulties or become unable to meet their basic needs and settle monthly expenses upon paying the full tax debts. 

An experienced Nevada tax attorney can educate you about the benefits and requirements for each option, determine the right one for your unique situation, and enlighten you about the potential penalties for non-payment. 

Non-Payment Penalties 

However, if you default or file to pay your back taxes, here are the possible penalties: 

  • Filing charges for a failure-to-pay penalty 

  • Fines of 0.5% per month. This can accumulate to a maximum of 25% of the balance due. 

  • Placing a levy on your financial accounts, property, and assets 

  • Placing a lien on your property 

  • Garnishing your wages 

  • Seize your property and assets. 

A dependable tax litigation lawyer can outline a strategic plan to settle your tax debts, reach out to the IRS to negotiate a feasible payment plan, and help you avoid any non-payment penalties. 

Turn to Reliable Representation 

Filing back taxes and resolving tax debts in Nevada often involve a lot of complex processes. However, your situation can become complicated very fast, especially if you are overburdened with tax debts. Fortunately, you may be able to seek tax debt relief through payment plans, offer in compromise, or delay collection. An understanding tax attorney can analyze your legal choices and help you make informed decisions.  

Scott N. Tisevich, Attorney at Law, has practiced his career advising and directing clients in complex tax matters involving filing past due taxes. As your legal team, he can tell you about the benefits and drawbacks of each tax relief option and help determine the right choice for your unique situation. In addition, Attorney Scott N. Tisevich will advise you through every legal process and attempt to negotiate a feasible payment plan or reduced payment with the tax authorities.   

Do you owe more taxes than you can afford to pay? Contact the Law Office of Scott N. Tisevich today to arrange a simple consultation. Attorney Scott N. Tisevich can offer you the clever advocacy and thorough legal counsel you need to navigate intelligent decisions when trying to settle your past-due taxes. The firm is proud to serve clients across Reno, Las Vegas, Carson City, Lyon County, Churchill County, Douglas County, and Story County, Nevada.