Tax Debt Attorney Virginia

There is an old quote that there are only two things that are certain in life: death and taxes. Written by Benjamin Franklin well before the establishment of the Internal Revenue Service (IRS), this saying is popular because, for many people, it rings true. If you don’t pay your taxes, the IRS will eventually take action.

When you owe taxes to the federal government, the IRS might seek to recoup the amount through wage garnishment, tax levies, and/or seizure of assets. Tax debt can be incredibly stressful, particularly if you don’t know how you will be able to pay back the amount that you owe. Our Virginia tax debt lawyers can help you explore options for resolving the matter, such as setting up an installment agreement, settling the debt through an offer in compromise, or other relief depending on your circumstances..

At Poole Brooke Plumlee PC we represent taxpayers throughout Virginia who are dealing with tax issues involving the IRS and/or state taxes including the Virginia Department of Taxation. We offer smart, effective legal counsel to individuals and businesses dealing with problems such as outstanding tax debts, IRS audits, tax appeals, and more. Contact our law firm today to set up a consultation with an experienced Virginia tax law attorney.

Options Available for Resolving Tax Debt

The IRS is responsible for collecting taxes on behalf of the federal government. If a taxpayer fails to pay their taxes, the IRS will take action to collect on the debt. While this may not happen immediately, the IRS will use its broad powers as an arm of the federal government to collect the money.

The IRS can use several tools to recover outstanding taxes. This may include issuing a levy to seize funds in your bank account, garnishing paychecks, and filing liens against your assets. In more extreme cases, the IRS may actually seize your assets such as a vehicle and/or real property.

When you owe money to the IRS, it can be tempting to ignore the letters and hope that the problem goes away. In many cases, people owe money to the IRS because they don’t have the resources to pay their taxes. However, ignoring the problem will only make it worse – and may ultimately lead to criminal charges. 

If you receive a notice from the IRS related to a tax debt, then you must act immediately to protect yourself. A Virginia tax debt attorney may be able to help you work out a plan to repay the debt or settle it for less than the full amount owed. As discussed below, several options may be available to you for resolving a tax debt depending on your specific situation.

Currently Non-Collectible Status

If you owe money to the IRS and do not have the income or liquid assets to satisfy the liability, then you may be eligible for temporary relief through currently non-collectible (CNC) status. It may be an option if any monthly payment to the IRS would create a hardship – such as being unable to pay for basic, necessary living expenses.

CNC status is a temporary reprieve. When you are on CNC status, the IRS won’t levy your bank account or garnish your wages. However, you will still owe the money to the IRS and it will continue to accumulate penalties and interest. Any tax refunds that you become entitled to while in non-collectible status will be applied to your tax debt. If your financial situation improves, then the IRS will require you to make payments.

Installment Agreement

If you owe money to the IRS and cannot pay it back at once, then you might be eligible for an installment agreement. With an installment agreement, you will make a monthly payments to the IRS to pay off your tax debt (plus any interest and penalties). You must have filed all required tax returns to be eligible for an installment agreement.

While an installment agreement is in place, the IRS cannot levy your bank account or garnish your wages. Setting up this type of arrangement may also help you avoid a tax lien. While you still owe taxes and are paying on an installment plan, any tax refund that you receive will be applied to the tax liability.

Offer in Compromise

An offer in compromise is a form of tax relief whereby the IRS agrees to accept a lower amount to discharge your full tax debt. Importantly, the IRS only accepts an offer in compromise in limited situations. A Virginia tax debt lawyer can help you determine if you might be eligible to resolve your tax liability in this way.

Generally, the IRS will accept an offer in compromise in 2 situations: 

1. When the IRS doubts that it can collect the full amount of taxes owed; or
2. There is some doubt that a taxpayer owes the tax debt.

If you could pay off your tax debt over time – such as through an installment agreement – or have sufficient equity in assets to satisfy your tax debt then you probably will not qualify for an offer in compromise. The IRS will thoroughly examine your finances to determine eligibility before accepting any offer.

Most offers are based on the first scenario – the IRS is unlikely to collect the full tax due. In this situation, the IRS will examine your reasonable collection potential to decide whether to accept your offer. A seasoned Virginia tax debt attorney can help you determine if you may qualify for an offer in compromise and come up with an offer amount that is likely to be accepted by the IRS.

It can take up to 18 months for the IRS to process an offer in compromise. While the IRS is reviewing the offer, they cannot levy your bank account or garnish your wages. However, the  IRS might file liens to secure its interests.

Penalty Abatement

A penalty abatement does not change the amount of taxes that you owe. Instead, penalty abatement will remove or reduce the penalties that you owe for failure to pay your taxes. This will reduce the total amount that you owe to the IRS.

Tax penalties can add a significant amount to your tax debt. For example, if you filed your tax returns on time but did not pay your taxes, you might be assessed a penalty of up to 25% of the tax due with interest. 

Penalty abatement may be granted if you have “reasonable cause.” If you don’t have reasonable cause, then you might be able to have some of the penalties abated if you haven’t had a similar penalty for the past 3 tax years and have made arrangements to pay the tax due.

Bankruptcy

It may be possible to discharge income tax debt through bankruptcy. This option is only available if you have filed a tax return, your tax debt is for income taxes and is at least 3 years old, and you did not commit tax fraud or evasion. If you are contemplating bankruptcy, contact a qualified Virginia bankruptcy lawyer to discuss your options.

When Should You Contact an Attorney?

When the IRS determines that a taxpayer has outstanding taxes, it will pursue that money using the might of the federal government. There is a multi-step process that the IRS follows, with notices sent to taxpayers before any action is taken. If you receive a notice of a tax debt from the IRS, it is important to act quickly.

Tax debt will not go away if you ignore it. Reaching out to a Virginia tax debt lawyer as soon as you receive a notice from the IRS is the best way to protect your interests. Your attorney will review the notice and other paperwork and will help you determine the best course of action based on your particular situation.

Tax law is incredibly complex. It is often difficult for the average taxpayer to understand their rights and options under the tax code. If you received a notice from the IRS about a tax debt, contact our law offices immediately to protect your rights.

How Our Law Firm Can Help

Getting a letter from the IRS can be panic-inducing – especially if you know that there might be an issue with your taxes. Fortunately, there are often options for resolving tax debts. The key is to act before the IRS takes action to levy, garnish, lien, or seize your assets.

At Poole Brooke Plumlee PC we have years of experience representing taxpayers in state and federal tax matters. We offer skilled, compassionate legal representation, with the understanding that it can be easy to let your taxes get ahead of you. To learn more or to schedule a consultation with a Virginia tax debt lawyer, call our law firm at 757-499-1841 or fill out our online contact form.

If I Can’t Pay My Tax Debt, Should I Still File My Tax Return?

Yes. You should always file your tax returns regardless of whether or not you can pay the full amount of taxes due. Failure to file tax returns will actually limit the options that you have available to you to resolve your tax debt. For example, the IRS won’t consider an offer in compromise if you haven’t filed a tax return. 

If you are having difficulty paying taxes, the best approach is to be proactive. Contact Poole Brooke Plumlee PC today to talk to a Virginia tax debt lawyer about your tax issue.

Can the IRS Really Seize My Property to Pay My Tax Debt?

Yes. The IRS does have the authority to seize a taxpayer’s assets and then sell them to resolve a tax debt. This is a more extreme step, but it can happen and especially when a taxpayer completely ignores IRS notices and makes no attempt to resolve a tax debt. Generally, cooperating with the IRS and making arrangements to resolve your tax debt will reduce the chances of the agency seizing your assets.

Owing money to the IRS can have serious consequences. If you are dealing with outstanding taxes, reach out to Poole Brooke Plumlee PC today to schedule an appointment with a Virginia tax debt attorney.