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Tax Debt Relief Attorney

Posted in COVID-19,Debt Relief on April 4, 2020

Taxes are a reality of life, and for many individuals, so is debt related to tax payments. In fact, in 2018 there were more than 14 million tax-debt cases against individuals and businesses in the United States. If you find yourself stressed and worried about the tax debt you owe, you are not alone.

The Law Office of John W. Redmann, LLC can help you take the steps you need to reduce your tax debt and find relief from the financial stress caused by your tax obligations. Helping clients across Gretna and New Orleans, Louisiana, John Redmann and his team are committed to providing high quality legal representation to clients in need. Contact our firm today at (504) 500-5000 our at our website for a free consultation.

Do You Need Tax Debt Relief?

Any individual who owes taxes to the government may need help securing relief from that debt. There are some steps you can take to manage your tax debt if you can’t pay your obligations on time:

  • File for an extension. If you will be able to pay the full amount owed in less than 120 days, you can apply for a short-term payment extension. Even with an extension, you may still owe interest on the debt.
  • Request installment payments. Installment plans allow for payment of tax debt obligations in monthly installments. If you qualify for an installment plan, there is a one-time charge of $120, though this amount can be reduced to $52 if you opt for direct debit for your installment payments.

While both of the above options may help individuals manage their tax debt, neither reduces the tax obligation but instead require payment in full. If you do not believe you will be able to pay your tax obligations, even with an extension or through installment payments, you should consider tax debt relief.

How to Secure Tax Debt Relief

The process for securing tax debt relief is called an Offer in Compromise (OIC) or Form 656, which can be a very complicated process and is generally best managed with the help of an experienced attorney. An OIC, if accepted, becomes a binding agreement between the individual and the IRS to settle tax debt for less than the full amount that is owed.

There are a number of prerequisites to becoming eligible to request an OIC in addition to a $186 application fee:

  • Cannot be in bankruptcy proceedings
  • Must have filed all required federal tax returns
  • Must have made all required estimated tax payments
  • Submitted all required federal tax deposits

Each OIC is considered based on its own circumstances, and in order to gather necessary information, the IRS will require an applicant to submit a form meant to collection information on the applicant, whether an individual or a business. The factors that are considered include:

  • Ability to pay;
  • Income;
  • Expenses; and
  • Asset equity

You will need to be prepared to submit extensive information regarding your personal assets and monthly household income and expense information. If you are a sole proprietor or business owner, you will need to detail your business assets and business income and expenses. The IRS will review this information, and if it determines that the person is able to pay their tax debt through monthly income and liquidation of assets, they will likely reject the offer.

The Law Office of John W. Redmann, LLC can help you ensure you include all relevant information and that the facts and circumstances of your situation warrant an OIC.

What are the Risks of Requesting Tax Debt Relief?

It is important to ensure you have a strong case to receive an OIC because the offer requires up front monetary payment in addition to the application fee. There are two payment options you can propose in your OIC:

  • Lump Sum Cash: This method requires the applicant to present an offer that includes payment of 20% of the offer be paid with the OIC and payment of the remaining amount within five or fewer payments within five months of OIC acceptance.
  • Periodic Payment: The first payment must be paid with the offer, and the remaining payments must occur in monthly payments within 6 to 24 months depending on what your OIC proposes.

Regardless of which option you choose, payments made with the offer are generally not refundable. If your OIC is not accepted, the money will not be returned. There are not obvious exceptions for the requirement to provide the payment up front. An attorney can help you understand a reasonable starting offer based around an upfront payment that you can afford.

What Makes an OIC More Complicated?

An OIC for an individual or a business is complicated in its own right, but there are a number of factors that can make the process even more complicated. Examples of these situations include:

  • Married couples with joint tax debt when at least one spouse also has separate tax debt
  • Divorced couples who have joint tax debt when one person does not want to file for an OIC
  • Those with individual and business tax debt
  • Tax debt from a limited liability company
  • Seeking relief from tax debt for an estate

While using an attorney is recommended for any OIC, it is particular important to work with such an expert if you are confronting any of these scenarios.

Contact John W. Redmann and Team for Help Today

The team at the Law Offices of John W. Redmann, LLC work to utilize legal processes to secure fair results for our clients. We have more than 25 years of history in helping individuals in Louisiana relieve financial stress and burdens in their life.

We work with each client to analyze the facts of their case and to determine whether we can provide assistant in their legal matters, including tax debt relief. Our focus is to deliver successful solutions to our clients’ tax problems. John W. Redmann ensures that the firm’s tax relief services are affordable for any income bracket. Contact the firm today at (504) 500-5000 or through our website to schedule a free case consultation.