A "friend" owes back taxes to the IRS, how can he get back in the good graces of Uncle Sam?

Question

He was out of work for four years with a medical condition. He wants to do the right thing but is afraid, any suggestions?

Wow it's amazing what idiot there are just saying "pay the back taxes". He's been out of work for FOUR years.......******* abound!

Answer 1

You need a competent tax advisor, not the clowns giving bad advice here. You can't just get an Offer in Compromise. You really need someone who has done them before (yes I have).

When we take on a client with a case like this, we first determine how much tax was owed in the first place. We try to minimize the taxes. It MAY be that you owe nothing but tax returns to the IRS! We can find out fast and inexpensively.

The IURS simply wants non-filers back into the system. The fearful taxpayers make the mistake of saying "I didn't file last year...so I won't file this year cuz I'll get caught for last year's boo-boo!" That's wrong-headed thinking friend. You have to break the chain!

Enrolled Agent
Tax Advisor

Answer 2

The first thing your friend should do is call the IRS and get the exact amount he owes. I wouldn't recommend seeking tax advice from a professional, because they'll charge him for it, and he's already in a financial bind.

Is he back to work yet? If he is, then I would try to set up some sort of payment plan with Uncle Sam. Also, if he's back to work, the IRS will probably take his refunds from this point forward until his back taxes are paid off.

If he's not back to work, and has no income, then it's going to be really hard for him to get those taxes paid off. As far as I know, there's no "waiver" of IRS liens out there for people - once you owe the IRS, they keep sending those letters until they get their money. Good luck :)

Answer 3

Depending on how much your 'friend' owes, there are 3 options.
1. Pay what they owe.
2. Enter an installment payment plan. This is basically financing the past due amount much like a car loan.
3. Submit an 'Offer in Compromise'. This amounts to saying 'I'll give you $x.00' now if you forgive to rest of what I owe.

The links below are IRS web pages relating to options 2 and 3.

EDIT:WealthBuilder's answer posted while I was typing. He knows what he is talking about.

Answer 4

Offer the IRS an Offer in Compromise. Just make sure your friend has the money avail.

Answer 5

By working out a payment plan.

Answer 6

Hmm,That's a tough one.Oh,wait,pay the back taxes? Nah,probably wouldn't work.