Sometimes, you just cannot pay everything you owe when it is due. There are several options available for past due taxes amounts with both the IRS and the State of California. Not all options are available for all types of taxes. The remedies available to you (detailed as applicable for IRS; CA rules vary) include:

Installment Agreements (IA)

• Automatic (not an application process) if you owe $25,000 or less
  • Use form 9465
  • Can be completed during preparation of the tax return
  • Must pay entire debt in 5 years
  • IRS charges a fee, and interest and penalties continue to accrue
  • Generally, minimum payment is the amount you owe divided by 48
• Regular Installment Agreement
  • For amounts owed greater than $25,000
  • Must submit detailed financial statements on the appropriate forms (433 series)
  • Payments are for the remainder of the statute of limitations on the tax or 5 years, whichever comes first
• Short Pay Installment agreement
  • If you cannot make the payment calculated on the other two options
  • Follow procedure for Regular Installment Agreement
  • Monthly payment amount is the MAXIMUM they can squeeze out of you following special rules
  • We are particularly helpful and skilled at strategizing with you to understand and control the monthly payment amounts

Offer In Compromise (OIC)

• Use when an installment agreement is deemed not feasible
• Submit detailed financial statements on the appropriate forms (433 series)
• Calculate assets minus secured debts
• Calculate installment payment amount over a period of times (varies with types of OIC filed)
• Add the two calculations together to determine amount to pay
• Requires comprehensive understanding of the rules regarding the calculation process to minimize the total amount due
• We are particularly helpful and skilled at strategizing with you to arrive at the lowest possible offer amount
  • Understanding the rules
  • Understanding variances to the rules that can be negotiated
  • Fighting the IRS in regard to “phantom” assets they claim to discover
  • Rapid response to their “clarification issues”
• Beware of the large chains advertising this service
  • This is the “pennies on the dollar” concept, but remember, 99 pennies on the dollar is still pennies on the dollar
  • Not every situation qualifies for an OIC – wwill not take your money and agree to submit an OIC unless you are a strong candidate for an OIC
  • We will keep you informed of our process every step of the way
• IN TODAY'S POOR ECONOMY, NOW IS THE BEST TIME TO CONSIDER AN OIC!

Currently Not Collectible (CNC)

• Uses a special internal IRS form not available to the public (53)
• Allows for no payment in times when none of the above options can be considered
• Updated and reviewed annually until the statute of limitations expires
• Not necessarily a permanent solution

Federal Statute of Limitations

• Federal only
• 10 years from date of tax assessment (this is an internal IRS date we can get)
• Proper investigation may substantially reduce the amount you will pay
• MUST HAVE ACTUALLY FILED THE RETURNS!

Bankruptcy

• We are not bankruptcy attorneys, but we can work with you and your attorney to determine whether or not your tax liability may be all or partially discharged in bankruptcy
• You CANNOT file bankruptcy and an OIC at the same time