FINANCIAL ANALYSIS
“If you can’t afford to pay the IRS the minimum payment plan amount they’re requesting from you, it may be worth exploring disclosing your financials to the IRS so that you can pay them back only what you are financially able to."
-Greg Daer
It’s important to understand how the IRS evaluates your financial ability to pay.
The IRS takes a few things into consideration when you disclose financials to them: a) your monthly household income, b) your monthly household expenses (the IRS can limit the expenses they allow if they’re considered excessive or unnecessary), c) your assets and property (including cash, money in bank accounts, retirement accounts, crypto currency, and tangible assets like your house or cars). So, it’s not always advantageous to disclose your financial condition to the IRS if you don’t need to — they want to see what your ability to repay the back taxes truly is.
We can help you know exactly what the IRS will want to try to collect from you before calling the IRS, because we’ll go over your financials internally first. Then, we’ll come up with the best game plan to help navigate and negotiate it. It can be essential to have a tax professional go over your financials with you BEFORE disclosing them to the IRS. Once you disclose your financials, the IRS will generally want to try to collect the back taxes as much as your financial situation allows (or as little).
The IRS generally files tax liens as a standard procedure to secure their interest in the tax debt if a resolution is reached by disclosing your financials.