The IRS wants what they think is theirs. You want to keep what you think is yours. So, how can those two intentions coexist when what the IRS thinks is theirs and what you think is yours is often the same thing – your money?
There are ways to protect your finances and keep them away from the IRS. No, we aren’t talking about tax evasion. We’re talking about legitimate, legal tactics that you can use to protect your hard-earned cash from IRS claims.
Understanding Form 433-A
When the IRS is investigating your finances and attempting to collect a debt, you will often be asked to fill out Form 433-A, the Collection Information Statement for Wage Earners and Self-Employed Individuals. This form along with certain financial documents provides the agency with a full overview of your financial circumstances.
You are more than welcome to fill out this form and proceed as the IRS asks you to, but there are situations that allow you to avoid filling out these forms and permit nondisclosure.
Spreading Out Your IRS Debt with Installment Agreements
Financial disclosures are not always necessary when you owe the IRS. One way you can avoid these disclosures is by committing to an installment agreement to pay off debts.
For streamlined installment agreements, the terms are:
- 72-month payment plan for debt $50,000 or less
- 84-month payment plan for debt between $50,001 to $100,000
Settling Debt Up to $250,000 Without Disclosures
For non-streamlined installment agreements, you can settle your debt without financial disclosures for tax liabilities totaling up to $250,000. Under these terms, you must pay off the debt in total before the “statute of limitations” on your tax debt. This will be ten years from the date of your tax assessment unless you receive an extension from the IRS.
Other than the maximum ten-year statute of limitations, there are no set timeframes to pay off debts between $100,000 and $250,000, but IRS officials will work with you to determine a reasonable payment amount. IRS officials may ask you to agree to additional terms in this type of repayment plan, including automatic draft payments to avoid missed or late payments in the future.
Over $250,000 in Debt Means You’re Out of Options to Avoid Disclosure
If your debt to the IRS is greater than $250,000, then you have no option but to speak with the IRS and discuss your financial situation with them. It’s important not to let it get this far, but if you are dealing with any amount of significant debt with the IRS, contact Robert V. Boeshaar, Attorney at Law, L.L.M, PLLC, for help getting out of trouble with the IRS.
Robert V. Boeshaar Attorney at Law, LL.M.,PLLC
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