There are a lot of choices when it comes to finding a company to help with tax relief. However, not all of these companies are as helpful as they advertise themselves to be – especially when it comes to tax debt resolution.
In this case study, we’ll look at one particular case where the client was working with a tax relief company prior to working with Damiens Law. This case study will also explore what tax debt is, how it can be resolved, and what taxpayers can do if they find themselves in a similar situation.
An insurance agent came to the firm looking for help. The insurance agent’s company was not only behind on their payroll taxes and income taxes, but they were behind on pretty much everything. This had been going on for months and equated to tens of thousands of dollars in tax debt. Originally, they went with a large tax resolution company and were put on a monthly payment plan that spanned about 2 years prior to calling Damiens Law. In the month leading up to calling our firm, this client received a garnishment because there was no progress made on his case with the IRS. The IRS levied all of their bank accounts, including their client’s insurance premium account.
Time to call Damiens Law
After receiving notice, the insurance agent called Damiens law. Once they called – Damiens Law stepped in and got to work.
The first thing we did was evaluate the situation. Our team was able to get the funds released back to the client within 24-48 hours. From there they were able to set them up with a payment plan to get the tax debt paid off.
Once they had a handle on their payment plan for the IRS, they were able to make sure they had the proper tax planning in place to prevent this from happening in the future.
What went wrong?
Many people put their trust in these large national companies that promise their customers to help with tax debt. However, many get people locked into a payment plan and then never take any action on the case and continue to collect the monthly fee.
This large company was able to collect hundreds of dollars from the client each month, over the course of several months without making any real progress on their case.
In addition to this, at a point when these companies get so big, it is hard to make sure they are hiring people who know what to do for the clients – especially, in specialized cases. Therefore, nothing really gets done.
Because of the lack of action on the account or case, caused the IRS to take further actions, at the client’s and their business’s expense.
What is tax debt?
Tax debt is the total amount of money that a taxpayer owes to the government in taxes. This can include federal income tax, state income tax, payroll taxes, and even property taxes.
No matter a person or business’s financial situation, having a tax debt can quickly become overwhelming. This is especially true when the debt begins to accrue interest and penalties.
The IRS has a number of methods they can use to collect on unpaid taxes, including wage garnishment, bank levies, and asset seizure.
How is tax debt resolved?
Tax debt can be resolved in a few different ways. The most common way to resolve tax debt is by paying it off in full. However, this is not always possible for everyone.
Another way to resolve tax debt is through a payment plan with the IRS. This type of arrangement is called an “installment agreement.” With an installment agreement, the taxpayer agrees to make monthly payments to the IRS until the debt is paid off.
In some cases, taxpayers may be able to negotiate a “lump sum settlement.” This is where the taxpayer agrees to pay the IRS a lump sum of money that is less than the full amount owed.
Finally, in some cases, taxpayers may be able to have their debt “forgiven” by the IRS. This is typically only an option for taxpayers who cannot afford to pay their debt and meet certain other criteria.
How Damiens Law was able to help
At Damiens Law, we are focused on helping our clients resolve their tax debt as quickly and efficiently as possible.
When the insurance agent came to us, they were already behind on their taxes and had bank levies and garnishments in place. Our team was able to get the garnishment released, return the funds back to the accounts, and set up a payment plan with the IRS.
We were also able to provide tax planning services to help the client avoid this situation in the future.
If you are struggling with tax debt, we encourage you to give us a call. Our team of experienced tax professionals can help you resolve your debt and get you back on track.
Advice for avoiding tax debt
There are a few key things that you can do to avoid getting into tax debt in the first place.
First, make sure that you are filing your taxes on time. This seems like a no-brainer, but it is one of the most important things you can do to avoid tax debt.
Second, try to pay your taxes in full. If you can’t pay the entire amount owed, try to at least make a payment. This will help reduce the amount of interest and penalties that accrue on your tax debt.
Third, if you are self-employed, make sure that you are setting aside money each month to pay your taxes. This will help ensure that you have the money available when tax time comes around.
Finally, if you are having trouble paying your taxes, don’t wait to seek help. The sooner you get help, the easier it will be to resolve your tax debt.
Curious about if it’s time to hire a tax attorney? Read more here.
Advice for taxpayers in a similar situation
If you find yourself in a similar situation, the first thing you should do is call a tax professional.
At Damiens Law, we are here to help taxpayers resolve their tax debt. We understand the stress and anxiety that can come with owing money to the IRS. Our team of experienced tax professionals will work with you to find a resolution that works best for your unique situation.
Don’t wait to call us, the sooner you do, the sooner we can help you get back on track!
Call Damiens Law today
If you find yourself facing tax debt, call Damiens Law before calling a large national tax resolution company. Rather than getting charged a monthly fee to drag out the case, work with someone who is focused on solving the issue and getting you back on track with the IRS.