Presented by Sterbick and Associates Law Firm: Tacoma’s Trusted Tax Resolution Experts
Managing tax debt can be incredibly stressful, especially when your financial stability is already on the line. The good news is the IRS offers a variety of relief programs, and with the right approach, you can tackle your tax debt without draining your finances.
At Sterbick and Associates Law Firm in Tacoma, we specialize in helping individuals and businesses resolve tax debt efficiently and affordably. If you’re struggling with back taxes or IRS notices, contact us today to explore your options and regain financial peace of mind.
Here are 10 strategies to resolve your tax debt while keeping your financial footing secure:
Get a Clear Picture of What You Owe
Before choosing a solution, it’s essential to understand your total tax liability. You can request a transcript from the IRS that details the taxes you owe, along with any accrued interest and penalties. Knowing exactly where you stand is the foundation for making informed decisions.
Explore IRS Installment Agreements
IRS installment plans allow you to pay your debt gradually through monthly payments. There are two main types:
- Short-term plans (up to 180 days) for smaller balances
- Long-term agreements for larger debts (may include a setup fee)
Although interest and penalties continue to accumulate, these plans can make the debt much more manageable over time.
Consider an Offer in Compromise (OIC)
An OIC allows qualifying taxpayers to settle their IRS debt for less than what they owe. This is typically granted when paying the full amount would cause undue financial hardship.
Because not everyone qualifies and the application process is complex, it’s wise to consult with a tax resolution expert like those at Sterbick and Associates to improve your chances of success.
Request Penalty Relief
Penalties can significantly increase your total debt. If you’ve encountered hardships such as medical emergencies or natural disasters, you may qualify for:
- First-Time Penalty Abatement
- Reasonable Cause Relief
Proper documentation is crucial, but if approved, these abatements can substantially reduce your tax burden.
Ask for Currently Not Collectible (CNC) Status
If you’re unable to meet your basic living expenses, you may qualify for CNC status, which halts IRS collection efforts (like wage garnishments or bank levies). Though interest will still accrue, this can give you temporary financial breathing room.
File Any Outstanding Tax Returns
Unfiled returns can lead the IRS to estimate your liability, which is often much higher than what you actually owe. Filing all overdue returns helps lower your debt and opens the door to relief programs like installment agreements or Offers in Compromise.
Protect Yourself From IRS Collections
To stop or delay IRS collection actions, consider the following:
Request a Collection Due Process (CDP) Hearing if you receive a Final Notice of Intent to Levy.
File Form 911 with the Taxpayer Advocate Service if you’re facing serious hardship.
Understanding your legal rights is critical. Sterbick and Associates can help you navigate these procedures to protect your income and assets.
Dispute the Debt Through Audit Reconsideration
If your debt originated from an IRS audit and you believe there were errors, you may request audit reconsideration. By submitting new or overlooked documentation, you can challenge the results. While not guaranteed, it’s worth pursuing if you have strong evidence.
Look Into a Partial Payment Installment Agreement (PPIA)
A PPIA is similar to a standard installment plan but allows you to pay less than the full amount owed. The IRS will re-evaluate your finances every two years to determine continued eligibility. It’s a good option for those with limited means and a stable financial profile.
Work With a Tax Resolution Professional
Tax laws are complex, and navigating IRS programs on your own can be risky. A seasoned attorney or tax expert can help you:
- Choose the best resolution strategy
- Communicate effectively with the IRS
- Ensure your application is complete and accurate
At Sterbick and Associates Law Firm, we have extensive experience helping clients resolve tax debts across Tacoma and beyond. Let us guide you through the process and help you move forward with confidence.
Tips for Success in Resolving Your Tax Debt
Act Quickly: The sooner you begin addressing your debt, the more options you’ll have.
Stay Organized: Keep your tax documents and IRS correspondence in one place.
Be Honest: Full transparency with the IRS is key to reaching a fair resolution.
Know Your Rights: You have the right to appeal and to be represented throughout the process.
Final Thoughts
Tax debt doesn’t have to be a lifelong burden. Whether you’re considering an Offer in Compromise, a payment plan, or simply need help understanding your options, there’s a solution out there that fits your needs and budget.
Sterbick and Associates Law Firm is here to help residents of Tacoma and surrounding areas resolve their tax issues with professionalism, compassion, and proven legal strategies.
