Many clients have explained to me that a large IRS debt can feel so overwhelming that they can’t face it directly. I get that… and don’t judge.

The internet reminds them that if they don’t move, interest and penalty keep adding up, levies and garnishment are coming, and lien notices are going to be recorded. Despite this, many still find it difficult to move ahead.

Sometimes and strangely, the procrastinators actually come out ahead. Sometimes their decision not to act ends up benefitting them.

A few examples:

Example 1

Emma had $50,000 in IRS debt from an underwithholding issue. The debt grew as penalties and interest were added. She set up a time based installment agreement with the IRS and struggled as she made several payments. She also had other debt problems partially as a result of trying to make the installment payment to the IRS.

She knew she needed a better solution, but was overwhelmed and continued to end each month wondering how she was going to make it.

What she didn’t know, was that while struggling with the IRS debt, the time-frames necessary for her IRS debt to be “dischargeable” in bankruptcy were running, and eventually and unbeknownst to her the tax debt became eligible by date for discharge in bankruptcy.

The IRS payment plan eventually became too much. She stopped paying and the IRS levied her bank account.

She reached out to an experienced tax debt lawyer who reviewed her options and was surprised to learn that bankruptcy was available and would help her gain a real fresh start by removing the IRS debt and her consumer debt.

Example 2

Fred was retired. He’d been dealing with an IRS debt for several years, tried an IRS offer in compromise early on and it failed.

At one point he set up an installment agreement but the amount was difficult to pay each month and at during the Covid “shutdown” period at the IRS, he quit making the installment agreement payments.

As he didn’t hear from the IRS for a long time, he thought that perhaps the IRS was done trying to collect.

Unfortunately, the IRS sent him a “final” levy notice.

He cashed out part of his retirement to pay the firm a fee to help him solve the debt, felt sick about it and contacted a local, experienced, IRS debt attorney and found out that all the waiting had played out in his favor.

While waiting, the “collection statute expiration date” (the time the IRS has to collect the debt), had almost expired. Fred was actually just a few months from the IRS debt being removed from the system.

IRS DEBT GAME PLAN – FIRST STEP

Sometimes, waiting is the best option.

But if a real analysis isn’t done, you may not understand this, resulting in some sleepless nights, and possibly the payment of fees to someone who is treating everyone as “one size fits all” clients.

If you have been waiting…stop.

Take the first step and talk to someone who’ll review the facts and tell you the truth about your options.

You may not need to hire anyone… as the real solution may be relatively simple, or you may need to continue “waiting” to obtain the best outcome.