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When Your Spouse Owes the IRS

Have you always relied on your spouse to prepare your tax returns?

Have you received a letter from the IRS about back taxes due that surprised you?

Were you aware of a windfall of income but your spouse didn’t tell you the correct amount?

If the answer to any of the above questions is yes, you may be able to get relief from the penalties and the taxes due by your spouse so that your credit is not ruined and you can get on with your financial life. 

Provisions for Innocent and Injured Spouses

Sometimes life is full of surprises.  You just got a letter from the IRS demanding additional taxes from your last year’s tax return.  You have always relied on your spouse to prepare your returns.  After all, your spouse has an important job in finance.  Worst of all, you do not understand how the IRS thinks you did not report an additional $50,000 of income.  Now the IRS wants $20,000 for back taxes, penalties and interest.

In this situation and many others, you can apply for innocent or injured spouse relief. (Injured spouse means financially injured, not physically injured, in this case.) First, you must meet certain conditions to qualify for this relief. 

We can help you determine if innocent spouse relief will work for you.  We will review your situation to determine if there was an unreported income item that you did not know existed.  You spouse might have hidden additional income from you.  Or the situation just might not be fair to hold you responsible for the additional tax.

The IRS will review your application for innocent spouse relief and will determine if there were situations where:

  • There was an erroneous deduction claimed by your spouse
  • You had no actual knowledge of the erroneous deduction or item when you signed the return
  • It would be unfair to hold you liable for the tax once the facts and circumstances are known
  • You have not transferred or received property from your spouse to avoid payment to a third party or to pay taxes.

We understand that is a difficult time for you. There are many things to consider.  We are here to help you determine if you meet the requirements for innocent spouse relief. 

How We Can Help

If you feel you might be in the situation where the IRS is trying to collect money from you and it is your spouse that should have the debt, then we may be able to help.  Here are the ways we can help an innocent or injured spouse with IRS tax debt:

  • We can consult with you to assess your situation
  • We can explain the options you have for applying for tax relief
  • We can act as your representative to the IRS to handle your case
  • We can complete the forms necessary to apply for relief
  • We can access your IRS file to understand the records they have about your situation
  • We can negotiate your case with the IRS officer

To get started with us, please contact us to arrange for a convenient time to discuss your specific situation.  We will handle your situation in a discreet and confidential manner.  Your privacy is important to us.

Do You Owe the IRS Money That You Can’t Pay? 

It can happen by accident. You may not have withheld enough from your paycheck in the past year and wind up with a whopper of a tax bill in April. It could be you came into some money, spent it, and didn’t realize that a big chunk of it was owed to the IRS in taxes. 

If your debt has been piling up for a while, it can be overwhelming and extremely stressful. You might feel stuck or frozen, not knowing what you should do or how you are going to get out of your situation. But the worst thing you can do is nothing. The penalties and interest just keep adding up, sinking you further and further into trouble.

The IRS takes their money seriously! They will seek every legal way to collect the money they are owed. They can seize your assets, freeze your bank account, garnish your paycheck, and even restrict your passport.  They can file levies and liens on your property. We hope this hasn’t happened to you yet, but it will if you don’t act fast enough. 

Failure to Pay Taxes

If you owe money to the IRS but can’t pay, there are several options available to you depending on your circumstances. One of the most important things is to start paying you current taxes first. You must be all caught up with filing your income tax returns and paying your current taxes before most of these remedies are available to you.

Here are some of the options the IRS provides to taxpayers who owe money.  Whether these are applicable to you depends on your circumstances. 

  1. Installment plan

This is where you work out a payment arrangement with the IRS.  There are several forms of agreements, including regular, partial-pay, and streamlined.  Which one you should use is highly dependent upon your current financial situation and the amount you owe. 

  1. Offer in compromise

An offer in compromise is where the IRS agrees to accept less than the full amount owed.  The IRS does not have to accept an Offer, but if the Offer is presented so that it meets the IRS guidelines, it increases the chance that the IRS accepts the Offer to resolve the outstanding balance.

Not all tax professionals know the ins and outs of preparing an Offer that has a good chance of getting accepted.  It’s important to look for a professional who has an excellent track record of getting Offers accepted by the IRS. 

  1. “Currently Not Collectible” status

This status allows you to defer your debt.  The debt does not go away; you still owe the IRS money. But you’ll stop the process of getting your bank accounts levied or other collection efforts if you are granted this status.  This often happens when you don’t have enough income to cover your current living expenses. Once your income rises, the IRS will re-evaluate your situation. 

  1. Bankruptcy

Bankruptcy can be extremely useful to stop IRS collection efforts, potentially discharge income taxes that are old enough, and force repayment plans on an otherwise unwilling IRS.  Tax penalties may also be discharged through the bankruptcy.  Since this is such a complex area, your best bet is to consult with several professionals – an accountant, a tax resolution professional, and an attorney that is expert at bankruptcy issues. 

Getting Help

A tax resolution professional can help you:

  • Respond professionally to any IRS correspondence you receive
  • Contact the IRS on your behalf so that you don’t have to face them directly
  • Represent your case before the IRS
  • Get you caught up on filing back tax returns that are late
  • Understand the IRS Collections process and your rights
  • Negotiate penalties, interest, and taxes due to lower your debt
  • Work out a payment plan on any money you owe to the IRS
  • Fight for you on issues that come up, such as innocent spouse situations or positions taken on tax returns
  • Help you get levies and liens removed from your assets. 

Solutions for Resolving Your IRS Debt

Contact us at no obligation to you so we can understand your specific tax situation and provide advice on the options available to you.  Your tax issue is handled with the utmost confidentiality and privacy.

Are You Behind in Your Payroll Tax Filings or Payments? 

You have a good business, but sometimes your cash flow gets a little low and the payroll tax deposit doesn’t get made on time.  Or maybe you just got busy and missed your quarterly payroll tax return filings.

Whatever the reason, you’re now behind in your payroll tax filings or payments or both.

You might feel like you’re temporarily borrowing the money from the IRS until your business gets back on track, but the IRS doesn’t see it that way at all.  The IRS needs that money to make Social Security payments among other things and takes late payroll tax payments more seriously than just about any other tax problem.

Being Late on Paying Payroll Taxes Is Serious

To the IRS, a late payroll tax payment is considered stealing money from the government, and they have really put some teeth behind enforcement.  The most important thing you can do is to get help from a tax representation professional as soon as possible. 

Penalties can add up fast. There’s a failure to file penalty, a Trust Fund Recovery Penalty, interest on the taxes that are late, and the taxes themselves.  It can be easy to get into a hole really fast with back payroll taxes due.  Plus, it’s taxing on your peace of mind to have this kind of burden weighing you down. 

The Internal Revenue Service, state tax agencies, and local entities will send a letter if one of the following happens:

  • You miss a payment deadline for payroll taxes due. 
  • You miss a deadline for filing payroll tax reports.
  • An amount paid is short or over what the IRS or another tax agency calculates as due.
  • The agency notices a discrepancy on your payroll tax returns and needs an explanation.
  • You have been selected for an audit.
  • You fail to respond to previous correspondence.

Please note: The IRS will never send you an email about any of the above situations. They always send physical letters.  If you get an email, it’s a scam.

If you don’t respond to the initial IRS letters, the IRS and other tax agencies can apply liens, levies, garnishments, and seizures in an attempt to collect payment. You don’t want it to escalate to this level. 

It’s a great idea to get a tax professional working on your payroll tax problem. They can help you:

  • Respond professionally to IRS correspondence
  • Get you caught up on filing back tax returns that are late
  • Understand the IRS Collections process and your rights
  • Negotiate penalties, interest, and taxes due to lower your debt
  • Work out a payment plan on any money you owe to the IRS
  • Fight for you on issues that come up, such as a “responsible persons” situation
  • Help you get levies and liens removed from your assets 

Responsible Person

If you worked for a company that did not file their payroll tax returns or pay their payroll taxes on time, the IRS may have designated you as a “responsible person.” Do NOT ignore this correspondence! 

The IRS aggressively goes after anyone they can when it comes to payroll taxes, even if you’re not the owner of the business. If you have a relationship with the business that is of a particular status, duty, and authority, the IRS can blame you for not paying payroll taxes. And in this case, you are guilty before proven innocent.

It’s best to contact a tax representation professional who can argue your case and get your “responsible person” status dropped. 

Solutions for Your Payroll Tax Challenges

Contact us at no obligation to you so we can understand your specific payroll tax situation and provide advice on the options available to you.  Your tax issue is handled with the utmost confidentiality and privacy.

Are You Being Audited by the IRS? 

Have you received a letter or notice from a tax agency and don’t know what to do next?  The response you need to provide might be simple, or it might be very complex. We can help you interpret what the IRS is asking for so you can respond to the letter appropriately and put this behind you. 

An IRS letter can be triggered in several situations: 

  • The agency notices a discrepancy on any of your tax returns and needs an explanation.
  • An amount paid is short or over what the IRS or another tax agency calculates as due.
  • You have been selected for an audit.
  • You miss a payment deadline for taxes due. 
  • You miss a deadline for filing tax returns.
  • You fail to respond to previous correspondence.

Please note: The IRS will never send you an email about any of the above situations. They always send physical letters.  If you get an email, it’s a scam.

If it’s a discrepancy letter or balance due, the response can be fairly simple to craft and send. It’s always a good idea to get a tax professional to review or develop any response you need to send to the IRS. 

If you’re being audited, you will need to get ready for your meeting. The IRS officer has probably asked for certain records.  A tax professional can help you get ready and can guide you as to what you should be willing to provide to the IRS and what you shouldn’t. One example is if the IRS asks for your QuickBooks file or online access and you have several years of data in there. You only want to provide the IRS officer with the year in question; otherwise you’ll open yourself up to more scrutiny than you want. 

An audit can be extremely nerve-wracking.  You can get relief by having a tax professional on your side, walking you through the entire process. 

Getting Help

We’ve represented taxpayers with audits before the IRS, and we can help you, too.  We can:

  • Respond professionally to any IRS correspondence you receive
  • Contact the IRS on your behalf so that you don’t have to face them directly
  • Represent your case before the IRS
  • Fight for you on issues that come up, such as positions taken on tax returns
  • Escalate your issue to other remedies if the solution feels unfair or extreme

Support for Surviving Your IRS Audit

Contact us at no obligation to you so we can help you navigate the IRS audit process to a satisfactory outcome.  Your tax audit is handled with the utmost confidentiality and privacy.

Are You a Year or More Behind in Filing Your Income Tax Returns? 

Sometimes life just gets in the way.  You feel too busy or have experienced a divorce, illness, job loss, or death in your family that sidetracked you from filing your tax return on time. Or you could just be overwhelmed with the whole process of filing your taxes. Perhaps you don’t have the money to pay your taxes and thought you should wait to file (this is NOT a good idea).

You may also have a special situation with your spouse if they promised to file and didn’t or they don’t file correctly or they don’t pay. In some cases, you can claim that you were the “innocent spouse” and get your account corrected. 

Whatever your situation, we are here for you when you are ready to get caught up, and the sooner, the better.  We can help you relieve that huge psychological burden so you feel lighter and free from all that stress.

Failure to File Your Tax Return(s)

The IRS is very aggressive about coming after non-filers and non-payers. So even if you don’t owe that much, you’ll want to file right away to stop the penalties and interest from adding up. 

IRS debt can add up fast. There’s a failure to file penalty, interest on the taxes that are late, and the taxes themselves. The failure to file penalty can be as much as 25 percent, so that’s a debt you don’t want to have pile up on you. 

The most important thing about filing back taxes is to get them filed as soon as possible whether you can pay them or not.  Filing back tax returns will stop the failure to file penalty and is the first step on the road back to compliance for you. 

It’s never a good idea to have the IRS estimate and complete your return for you. You are better off hiring a tax professional to get you caught up and to represent your case before the IRS to work out a way to pay your back taxes that won’t leave you bankrupt or suffering financially.

We know there are many national chains out there that would like to help you with your tax problems, but all of the clients we have worked with say they prefer to hire a local tax professional in their own neighborhood. 

A tax professional can help you:

  • Respond professionally to IRS correspondence
  • Help you collect records and receipts and get your bookkeeping caught up so you can file accurate returns
  • Prepare and file any delinquent income tax returns
  •  Explain the next steps you need to take to continue getting back into compliance with the IRS.

Solutions for Your Delinquent Income Tax Return Filings

Contact us at no obligation to you so we can understand your specific tax situation and provide advice on the options available to you.  Your tax issue is handled with the utmost confidentiality and privacy.