I gave a quick speech on "The Path to Resolution" with the IRS this morning. Just like I do with this blog, I always tell it straight. There's no easy, fast answers with the IRS after you owe Tax Debt. The process of removing Tax Debt is long, difficult, and stressful, but it's not impossible.
Step 1, Compliance: The first thing that has to happen is Tax Preparation, is the file in compliance? If not, the IRS will send it back to you and ask for all the tax years you're out of compliance for to be filed. This can be incredibly difficult when you no longer have all of the documents to do this.
Step 2, Finances: The IRS wants to know everything about your financial situation. They want to determine why you're not paying them, and how much you can pay them. They want to see your electric bill, mortgage, car statement, the works.
Step 3, The Waiting Game: For most people that owe, a manager personally has to review every file. This is incredibly time consuming, it could be weeks or months before you get a response. Sometimes the manager will send a letter requesting MORE documents to prove your financial situation, and that long process starts all over again. When you don't work with a professional, you have to expect these kinds of delays.
Step 4, The Sentence: After everything is accounted for, the IRS determines how much you will pay from here. Here at our offices this is our cue to speak directly with the manager or revenue officer to prove the financial situation and work out the lowest payment. It's not impossible to negotiate on your own, just be sure to do some extensive research before hand.
Step 5, The Resolution: Once you know how the debt will be resolved (monthly payments, settlement in monthly payments) it's your job to hold up your end of the deal. Make the monthly payments on time, work your hardest to raise funds, do what's required of you. You don't want to make a bigger mess with the IRS.
The Perilous IRS Journey: Of course, this is oversimplifying a bit, but I want taxpayers that owe to get an idea of the kind of work they're looking at when they start on The Road to Resolution. There will be delays, it will be hard, but it's not impossible with persistence.