Writen by Sergio Melendez | Last updated 12/04/2024

If you owe money to the IRS, these are the six steps to fix your problem with the IRS

Need Help fixing your IRS Tax Problems? Call for a free case review: (949) 506-3457 or fill out the form!

Step 01: Account History, Balance & Root Cause: Complaince Review

The very first step is what's known as a compliance review or more commonly known as the compliance check. The compliance check is when you get the breakdown of the IRS, which is the balance that you do owe for the specific tax year, and you're also going to request what's known as a collection statute date or the CSED date. You literally get on the phone, ask the IRS when's the collection statute date. And they just blurt out the year of every single balance that you do owe. The reason that this is important is because when you request relief in the later on step, you would need to know the tax years and the specific amounts that you do owe

Step 2: Tax Filing Compliance

The second step here is known as compliance. You must be caught up with all your tax filings. This is broken out to two different parts. One part is to get caught up in all your filings. And if you're done with that, no problem, then go on to the second part, which is you must fix the error. If you keep owing because you don't have enough tax withholdings, you got to adjust your W-4 to make sure you have enough tax withholdings. You never want to get caught with your hand in the cookie jar again if you get yourself out of this mess. Now, if you're self-employed and there are no taxes taken out, you have to take that extra step of now making these voluntary deposits. They're also known as quarterly filings or the technical term is the 1040-ES payment.

Step 3: Calcualte Financial Based Ability

The third step is one of the most important parts now, because now you've broken down, you have the total amounts broken down by year by year, you're caught up in filings, and here's where now you want to calculate what it's known as your ability to pay, or what the IRS considers reasonable collection potential. The best form where you could do this is known as a 433-A. This has a breakdown of the equity and assets you have, your monthly household income, and your monthly household expenses

Step 4: Evaluate the Tax Relief Options

Step four is the part where you definitely want to evaluate what tax relief program you qualify for, based upon your ability to pay.

So here is where you say you have enough equity and assets to pay off the balance in full, or whether there's no way in hell the IRS can collect a penny from you, it's best that you go the offer in compromise route, or perhaps, maybe that based upon from step one, the compliance check, that the collection statute dates are so close that you do not want to go offer in compromise, that maybe the non-collectible route or the hardship payment plan is the best option for you. So here's where you kind of merge and evaluate everything in step four.

Step 5: Submit the IRS Tax Relief Program:

The 5th step, what you would want to do now is you want to go ahead and submit for your relief. When you submit for your relief, now you go ahead and get the packet ready that you best qualify for. Make sure you gather all your supporting documents, the appropriate IRS paperwork, and you submit for tax relief. The moment you submit, the moment you make contact with IRS requesting this relief, the IRS will then halt all collections, because now they're evaluating whether you do qualify for the program in itself. Now, the relief is only temporary, because they are going to just evaluate what you do qualify for. And if you get granted, then you'll get granted the full relief.

Step 6: Be Perisistent & Follow up with the IRS until Resolution is determined.

This is the most important part, and that is for you to be persistent. Keep following up with the IRS. If you submitted the offer in compromise program, that's a very lengthy program, so you have to always keep your eye out in the mail. If there's any circumstances that change, you change your mail, contact the IRS, forward your mail with the postal service. If it's one of the other programs like non-collectable status, hardship payment plan, generally, the IRS does have some delays, so it's important that you do follow up. And most importantly, because the IRS themselves, it's powered by people, people who make mistakes or people that are lazy, people that didn't do their work, whatever the case may be, that it's important if you follow up. By you following up, you could maybe catch something that's slipped through the cracks with the IRS, and it's just about be persistent to making sure that you do qualify.

Sometimes the biggest hurdle is taking the first step. If you need some guidance on solving your tax problems, my team is here to help. To get started, call (949) 506-3457. Rather have us call you? Click below to schedule a free case review.