1. Make a commitment to resolve the issue. Say to yourself here and now that you're going to do whatever it takes to get the IRS off your back and make everything right again. Find out from the IRS what your outstanding balance is. You can either call the IRS and find out directly, or you can hire a tax attorney and have the attorney do it for you. The wiser of the two options is to let a tax attorney do the calling for you. A tax attorney knows the right questions to ask to get the information he needs to help you resolve the issue.
2. Don't get your hopes up. Yes, the IRS grants forgiveness in some cases, and in some cases allows taxpayers to pay a small percentage of what they actually owe. Don't assume that the same thing will happen to you. People whose debts are forgiven or who only pay a fraction of what they owe are able to show mitigating circumstances such as unemployment, catastrophic loss, disability, or limited income. If you can prove one of these things, you might also be forgiven or settle for much less than what you owe. If not, you will be expected to pay what you owe plus penalties and interest. However, a tax attorney will be able to help you pay the minimum amount legally allowed by utilizing an intimate knowledge of tax law and loopholes, so make sure that one is working for you.
3. Don't call them; they'll call you. If you know you owe outstanding taxes from more than three years ago and haven't heard from the IRS about it, talk to a tax attorney before contacting the IRS. Yes, everyone loves an honest taxpayer, but you need to know exactly what you're getting in to before you contact the IRS.
4. Honor your agreement. When you work out a payment plan, stick with it. An untold number of taxpayers default after coming to some sort of agreement with the IRS, and the default only makes the situation worse. If something changes in your financial situation, let the IRS know. Or let your tax attorney know so that he can inform the IRS. Your tax attorney has an unequaled ability to mediate on your behalf with the IRS, so you can be sure that whatever deal he makes on your behalf is the best one available. Don't mess that up by defaulting on your payments.
5. Hire a tax attorney. There's a common theme running through these points, and that theme is the use of a tax attorney. Tax attorneys can negotiate with the IRS on your behalf, help you create a payment plan with the IRS, and help you prepare your returns in the future so that you can avoid any other problems. And tax attorneys are bound by confidentiality so that nothing you tell them can be shared in court. Tax attorneys can also intercept any correspondence or phone calls from the IRS, which will save you a lot of time and frustration.
Make a commitment to resolving your tax problems instead of ignoring them. Call upon the expertise of a competent local tax attorney. Stick with whatever agreement you make with the IRS. And be sure that you continue to use tax attorney services in the future to ensure that the IRS gets out of your business and stays out.
