Tax Debt 101 From A Philadelphia Tax Law Lawyer

As American citizens, there is an expectation that we will pay the government the taxes that we owe in order to provide funds for everything from our educational system to our public works, from paving our highways to keeping our military strong.  Unfortunately, many of us fail to make the payments that the government expects, and fall into tax debt. If you owe the IRS back taxes, you do have options available to you, and the experienced Philadelphia tax law lawyers at Erik B. Jensen Attorneys at Law are here to guide you through them. Contact our office today to set up an appointment so we can discuss the best way to approach your tax debt.

Depending upon how many years you are behind in paying your taxes and the amount that you owe each year, your tax debt may seem insurmountable. The truth is that the government is willing to work with those who owe back taxes, but it’s hard to know all of the choices that are available and which option works best for your particular situation. One thing is certain – the offers that are advertised on late-night television and radio, claiming that the IRS is willing to cut a deal in which you can pay an insignificant amount to make your tax debt go away are not realistic. The options that do in fact make sense include:

  • Installment agreements to pay back taxes – This arrangement offers several significant benefits, including the fact that once you have negotiated an amount and schedule of payment, the IRS no longer pursues collection actions on your account, and considers you compliant. The amount that can be negotiated is extremely flexible. The downside to this type of agreement is when you are unable to make payments that will significantly decrease your debt. Because interest on your tax debt will continue to accrue, it could take years to pay off your debt.
  • Amend past returns to lower liability – Many people ignore this as a possibility, but if you believe that one of the reasons that you are unable to pay your tax debt is that the amount that you owe was not reflective of your income, you can file an amended return to reduce the amount that you owe. This is also applicable in cases where the government estimated your tax obligation because you failed to file a return. When no return is filed the government files a substitute in return, and uses the lowest possibilities for deductions and exemptions. By amending and using actual figures, you can realize a much improved calculation.
  • Offer in Compromise – This is a program that the government provides, and which those late-night advertisements are referring too. There are some instances where the OIC program can prove to be a benefit. In order to qualify a taxpayer must have no outstanding returns, must have made estimated payments, and must not be in open bankruptcy. This program is generally most applicable for those with high liability and low ability to pay.

As experienced Philadelphia tax law lawyers, the attorneys at Erik B. Jensen Attorneys at Law are well-versed in all of the options available to you, and will be able to provide you with representation and counsel to make sure that you are protected and make the best choices. Call us today to set up an appointment to discuss your situation.

Learn more from our Philadelphia Tax Law Lawyer HERE.