There is a tax myth, widely believed among many of our new clients: that anybody can settle taxes.
Let’s take an extreme example: Bob the Billionaire. Bob has billions of dollars in the bank, and could write checks for amounts that most people couldn’t imagine having. Now let’s say Bob files his tax return and owes $100,000 one year. He does not pay it for two years–he gets notices from the IRS but ignores them. Question: Do you really think that Bob can pick up the phone, call the IRS and say something like “if I pay you now, will you settle taxes at sixty cents on the dollar?” and that the IRS officer on the other end will say yes?
Of course they won’t! If it were that easy, then EVERYBODY would settle taxes that way and nobody would pay the full amount. Accountants would advise their clients not to pay taxes for several years, because when they wait they pay less.
OK, but you’re not a billionaire, right? Maybe you struggle to pay the mortgage every month, or you have credit card debt. No matter how much money people make, KCTM has never come across a client who believed they made more than enough money.
Now, the IRS will settle taxes with taxpayers, but only if they have determined that the taxpayer is unable to pay their taxes. In order to settle taxes this way, a taxpayer must provide financial statements that show an inability to pay. A professional who is familiar with the IRS collections process can help you get your allowable expenses as high as possible and make it more likely that you can successfully settle taxes.
If you’re interested to know whether you qualify to settle taxes, call Kansas City Tax Mediation today to discuss strategies in a free, face to face consultation. Kansas City Tax Mediation: Let’s get through this together.