WHAT DO I DO TO REPAY MY TAX DEBT IN MY BEST INTEREST
Taxpayers have six options in dealing with a tax debt. These options include an agreement to pay the taxes over time, commonly referred to as an installment agreement.
The taxpayer may propose paying less than is owed. This is commonly called an Offer In Compromise. Frequently, you will see a reference or advertisement to settle your liability for cents on the dollar. Don’t be misled. Any settlement is for cents on the dollar. An offer in compromise requires disclosure of the financial assets of the taxpayer. An offer is very time consuming and there are many factors to consider that may extend the time the Internal Revenue Service or other taxing authority has to collect the taxes. Not all offers are accepted. Most are rejected. A successful offer will result in a contract between the taxpayer and the taxing authority that when completed resolves the debt and liens. The offer in compromise will take time for the Internal Revenue Service or other taxing authority to process.
Rarely will there only be tax debt. Usually, tax debt is the tip of the iceberg. The entire financial picture should be considered. Failure to consider all of the financial situation may result in the loss of property to other creditors, lawsuits, and pressure from creditors not being paid..
The taxpayer may also file a bankruptcy. There are three types of bankruptcies filed to aid a taxpayer with a tax debt. These are Chapter 7, Chapter 11, and Chapter 13. All of these types of bankruptcy are under the United States Bankruptcy Code. Each has advantages and disadvantages. An attorney experienced in bankruptcy is needed to advise you.
William F. Kunofsky is experienced in the area of bankruptcy as well as taxation and is able to help you understand which bankruptcy is best for you.
When you owe tax debts you should consider the qualification of the person representing you. Installment agreements and Offers in Compromise may be filed by enrolled agents, certified public accountants, and attorneys. However, only an attorney should advise you in the consideration of the filing of bankruptcy. Certified Public Accountants and Enrolled Agents are limited by law in the areas in which they may represent you. The advice received from one of these professionals does not normally consider all of the options available to the taxpayer. An attorney should evaluate your financial problem prior to deciding on what option to consider on paying your tax debt.
William F. Kunofsky is not certified by the Texas Board of Legal Specialization. William F. Kunofsky may be a debt relief agency that files bankruptcy under the United States Bankruptcy Code.