Jay Freeborne

by Jay Freeborne, Enrolled Agent

When you are an individual taxpayer that owes 1040 taxes, 941 taxes for a sole proprietorship or Trust Fund taxes from a closed corporation, what you owe the IRS often pre-determines how your case will be resolved.

0 to $10,000 taxes owed

Unless you are a serious financial hardship case -- balances this small are NOT going to be resolved by Offer in Compromise - they will usually end up being EITHER "currently not collectible" if you can prove hardship or an installment agreement with a penalty abatement request.

$10,000 to $25,000 taxes owed

If you can show that you won't be able to pay the debt back before the taxes expire, you might be able to do an Offer in Compromise on a balance this size. Uncollectible Status and a Payment Plan/Penalty Abatement request are also normal solutions. Balances this small ALSO can be sorted out by a "Streamline Installment Agreement" which doesn't require any financial disclosure.

$25,000 to $50,000 taxes owed.

It is quite normal to do an Offer in Compromise if you can't pay this debt off before the taxes expire or get it placed as uncollectible or make an installment agreement/penalty abatement request on it. Very recently - you can ALSO set up a streamline payment agreement on balances due $50,000 and under -- However, you should expect to give full financial disclosure on balances due this high.

$50,000 to $250,000 taxes owed

Balances this high can be settled using all of the tricks of our trade: Offer, Uncollectible, Payment Plans and Penalty Abatement. You should expect to give full financial disclosure on balances this high.

$250,000 and higher - taxes owed

Recently, balances due this high became the new threshold for having your tax case assigned to an IRS agent in the field. These cases will require big-time financial disclosure but all forms of tax resolution will be available to you.

For 30 years, WATAX has been solving every kind of tax problem. Call us at 1-888-282-4697 or email a description of your tax issue and we’ll contact you.

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