Everett Tax Attorney
Reduce or Eliminate Your Tax Debt in the Greater Seattle Area
Do you owe money to the Internal Revenue Service (IRS) that you simply cannot pay? Know that you are not alone: In 2020, the IRS collected more than $60.3 billion in revenue on unpaid tax returns. The IRS can be very intimidating when you owe them money, and the government has more powerful tools to collect than those available to ordinary collectors.
Our Everett tax lawyer at The Law Office of Ken Schneider, P.S. can negotiate directly with the IRS on your behalf and obtain a settlement that will get your life back on track. We have helped Washingtonians implement effective tax debt resolution strategies since 1993 and are ready to put our decades of experience to work for you.
What to Do When You Receive a Letter from the IRS
Receiving a letter from the IRS that claims you owe money to the government can be frightening, especially if you cannot currently pay the stated debt. After all, the IRS has a great deal of power, and the agency can utilize a variety of damaging collection strategies. Failure to pay IRS debt can result in garnished wages, bank liens, and even foreclosure on your home.
You must understand that most tax debts are not dischargeable through bankruptcy. Some tax liabilities can be discharged through bankruptcy under certain circumstances, and we can assist you with determining how filing will and will not impact your tax debt.
If you owe money to the IRS but realize you only need a flexible payment plan or cannot pay the debt at all, you do not necessarily need the help of an attorney. Currently, the IRS is fairly reasonable if you only need a simple payment plan or if you need to have your account put into “uncollectable” status. In other words, you can probably directly communicate with the IRS without legal representation.
You will most likely need a lawyer if the IRS refuses to negotiate an acceptable settlement or you believe you do not owe money to the government at all. Our Everett tax attorney can review your circumstances and advise how best to move forward.
Stopping Government Liens and Garnishments
Ignoring a tax debt will not make it go away, even if you believe you do not legitimately owe the debt. When you fail to pay or settle your tax obligations, the IRS will eventually resort to damaging collection actions, including wage garnishments and liens. Unlike a private company, the government does not need to obtain a judgment against you before garnishing your wages or seizing your assets.
When the IRS places a lien on your property, they gain the right to use the encumbered asset as collateral. If you try to sell property with a lien on it, the IRS will forcibly take what you owe out of the proceeds. When a lien encumbers an asset, the IRS also has the right to seize and sell that property. The government can put a tax lien on your real estate properties, vehicle, artwork, and any other type of valuable asset.
A lien on your property is a matter of public record and can negatively affect your ability to secure future employment, housing, and credit. If a prospective employer performs a background check on you or if you apply for a line of credit, they will likely see your lien, and you may be consequently denied an employment or credit opportunity.
If a lien is placed on your property, you have the right to a hearing. You must apply for this hearing within 30 days of the institution of the lien. Our team can fight for your rights and interests in this hearing.
When the government garnishes your wages, they take a portion of your paycheck until your debt has been settled. Private creditors with a judgment can typically only garnish up to 25% of your wages, but the IRS can often take a much larger portion.
The only way to stop a government lien or garnishment is to communicate directly with the IRS. You will need to take steps to settle your debt. Once a compromise has been reached and implemented, the IRS will generally release liens and cease garnishments.
Tax Settlement Strategies
Several different resolution strategies are available to tax debtors. When you agree to a “120 Arrangement,” you promise the IRS that you will pay your tax debt in full within 120 days. By committing to this arrangement, you will only have to pay your tax bills (plus penalties and interest). You do not have to pay any additional fees.
A 120 Arrangement is one of the easiest means of resolving tax debt, and you will most likely not need legal representation to negotiate this type of settlement. However, if you owe a significant amount of money to the IRS – more than you can reasonably hope to repay – it is probably not realistic.
If you feel that you can pay back what you owe to the IRS but cannot do so within 120 days, you may be able to negotiate an “installment agreement.” In this arrangement, the IRS will review your pay stubs and current income to determine what a reasonable monthly installment would be. The goal is to implement a sustainable plan with a monthly amount tied to your current ability to pay.
If you believe that you will never be able to repay what you owe, you may wish to seek an “offer-in-compromise.” This settlement involves paying only a portion of your tax debt, and the rest is effectively forgiven. The IRS will only agree to an offer-in-compromise if they are convinced that they will get more money through the settlement than they would through ten years of collection efforts. To qualify for an offer-in-compromise, you must have filed your taxes for every year of the period in question. Our team will also need to prove that your current financial circumstances are unlikely to charge.
In situations where you are struggling to pay basic living expenses and have no means of addressing your tax debt, you may want to consider requesting “Currently Not Collectible” status. The IRS will issue this status when they are convinced you cannot pay your tax debt or basic living expenses. Proving this involves providing an exhaustive level of financial documentation. We can help determine if you are likely to qualify for this designation.
Our Everett tax lawyer at The Law Office of Ken Schneider, P.S. can provide you with knowledgeable guidance and work to secure a settlement that will stop garnishments and release liens. We are familiar with how the IRS handles direct negotiations and can leverage our over 25 years of experience to obtain a favorable outcome in your case.
In addition to helping you reduce and eliminate tax debt, our firm can help you utilize estate planning tools to minimize your future tax liability. We also assist businesses with a wide variety of legitimate tax avoidance strategies.
“Ken Schneider is a great attorney. He helped me and my family get through one of the toughest times in our lives. He was able to guide us and help pick the best plan that fit my family. I have recommended him to others and will continue.”- Reese
“I not only have come away with the best scenario in a difficult situation, but I also have come away with peace of mind and hope. He came highly recommended and I can highly recommend him to others.”- Melanie
“Ken was right on the case, knew the complex facts quickly and accurately, and was successful at holding the trustee accountable to bankruptcy law.”- Mike
“Ken has a vast knowledge of Chapters 7 and 13 and will counsel you and make sure that he guides you to help you make the right decision. We know of at least 2 other friends that have hired Ken and they are very happy with Ken’s results and knowledge.”- Shaun
“I cannot say enough good things about Mr. Schneider. He is so kind, upfront, and intelligent.”- Stacy