The IRS IS Coming: Tax Strategies To Beat Them (Legally)
In this Main Street Business Podcast episode, hosts Matt Sorensen and Mark Kohler warn listeners that ignoring tax debt is the worst option and lay out a step‑by‑step roadmap for dealing with both federal and state tax liabilities. They begin by stressing the importance of filing all required returns even when payment is impossible, then advise prioritising state tax issues because state agencies act faster than the IRS. The core tactical toolkit includes: (1) requesting a 180‑day “pay‑in‑full” grace period for debts under $100,000; (2) entering short‑term (≤180 days) or long‑term installment agreements, noting the $50,000 disclosure threshold; (3) using the Offer in Compromise (doubt as to liability or ability to pay) and the procedural nuances of negotiating a lump‑sum or 24‑month payment plan; (4) considering bankruptcy for tax debts older than three years, with a caution about long‑term credit consequences; (5) avoiding common pitfalls such as payroll tax non‑payment, which can trigger criminal enforcement, and (6) staying vigilant against scams, since the IRS never initiates phone calls. Throughout, the hosts blend practical, technical advice with emotional coaching—encouraging listeners to replace apathy with hope, communicate openly with the IRS, involve trusted advisors, and seek multiple professional opinions. The episode concludes with a reminder that these strategies can be combined as needed, and that help is available through their tax‑pro network.
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Let's just get it out there.
Okay.
You owe the government some money.
Yeah. In the States, they're actually not as patient as the irs. They. They're brutal.
The last thing you want to do is nothing. You got to make a plan, and you must communicate that to the irs because there's some options. They give you options to say, hey, work with us.
Having a path can give you some hope, and I'd rather you have a feeling of hope than one of despair.
Welcome, everyone, to the Main Street Business Podcast with Matt Sorensen and Mark Kohler. We're excited to be with you today, even though the topic is little tough.
Yeah. If you're listening to this, where you can either you're listening for a friend, a family member, maybe a client, and it could be yourself. So we want to be sensitive. Oh, gosh. We've got so much to say. This is going to be super helpful. We're not going to joke around too much. We got a lot to cover. So, I don't know, there's touchy feely issues, then there's some very important technical issues.
Let's just get it out there, okay. You owe the government some money and
you're okay as you're a good person. And I vote the government money.
And gosh darn it, people like you.
Yes. Yes, Matt. I also need to laugh. Both of us have had 15 blues where we're like, it's gonna. I'm gonna have to pay in December when I get. I've got a deal going down or I got some more rev coming.
Yeah.
So the important thing is you have to know that there is very, very. I'm calling myself successful at this point. Whatever. There's very successful clients of ours. And if you think we're successful, we're trying. Yeah, We. It's. It's common. Now. There's some very, very important things you don't do in this process and very important things you do do, but your biggest enemy is apathy or ostrich. You know, I'm just going to stick my head in the sand. It'll go away. I'll come up when I can solve it. No, no, no, no, no, no. Yeah.
Or let me just ignore this because I don't. I don't want to have to deal with it. That is the worst thing you can do with the IRS or these state tax collection agencies, which are a lot of times more aggressive than the irs. The last thing you want to do is nothing. You got to make a plan, and you must communicate that to the irs, because there's some options. They give you options to say, hey, work with us. They've got a lot of people that owe them money, too. You're not alone. And they have programs and options. We want to make sure everybody knows. What are the ways you can work with the IRS to cut a deal, buy yourself some time, and avoid some of the costly mistakes that can happen? Because let me tell you what's going to happen if you do nothing. You're going to get a federal tax lien. If you owe the IRS money and you just stick your head in the sand, you're going to not only get some nasty letters coming your way, but eventually you're going to get a federal tax lien. And you know what? That hits your credit. You know how long it's going to take to recover from that thing hitting your credit. How many banks want to lend someone money that has a federal tax lien?
Yeah. Not a lot. Yeah. And just to fit a little bit fear of the Almighty in you, too. If you got problems with irs, you probably have problems with the state as well.
Yeah.
In the states, they're actually not as patient as the irs. They. They're brutal.
Yeah.
And those states have come hard and fast at bank accounts with garnishments and all that. Now, let me. Again, I want to say this from another mindset perspective. Let's just think. When you have a thought that I'm in a hole, I don't know how I'm going to get out, that thought creates a feeling. And that feeling could be fear. It could be one of, well, I'm a loser anyway. There's nothing I can do, so I'm just going to do nothing. And that. So those thoughts cause us to sometimes take the wrong approach. So a thought that we want to replace that with, with you here today. This is a. This will empower you, is that knowledge eliminates fear. Having a path can give you some hope. And I'd rather you have a feeling of hope than one of despair. So when Matt just said, hey, there's solutions here. Okay, pay attention. We'll make some notes. You may have listened to this several times. And, and, and so that. That's the trick. That's the trick. There's no magic bullet. We don't have like a phone number you're going to call. They're going to pay the bill for you, but can't give you techniques will help you have hope.
Yeah.
Not despair.
Yeah. And. But you need a little tough love, too. And I want you to have hope, but know that you'll get through it. There's, you know, as happens to a lot of people, a lot of entrepreneurs and investors. I know a lot of you listening. That's what you are. Have to deal with this at some point in their career. Sometimes it happens more often that it happens a lot more than you think. So I just want to say you're not alone, but at the same time, you have to act and take action on this. And so we're going to go through the options here. But there's just so many people that have gotten in trouble with the irs. Like Shakira is getting chased now by the. Actually the Spanish tax authorities. You know, there's, there's always a celebrity getting chased down, you know, by some government agency for, for taxes. And so it can happen to anyone. I'm trying to say don't feel bad.
Okay? Step one. I'm going to say step one is always file your tax returns. Step one. Even if you can't pay, a lot of people think, well, I can't pay, so I better. I don't need to file or I can't file or I don't have all the information.
I'm not going to wrap myself out. I mean, you know, I'm not going to count it.
I don't file.
They won't know.
Yeah. No. Is that penalties and interest for not filing are worse than filing and not paying? Hurry up. This is like the dating world. Ghosting your girlfriend or boyfriend is far worse in the long run than just calling up, going, we're done. That's it. Let them know. Let the IRS know where you're at. And they don't like to be in the dark. So I'm going to say this right now. We're three weeks out to October 16th. This could be some of you listening to this in the spring or two years from now, whatever the deadline is you're facing, if you can file an extension due to. But if you're at that final D day, do whatever it takes to file your day in return, even if you can't pay. Put it a big old goose egg when it says payment, that's okay. Now the IRS knows what, what's going on. And the penalties are half as much. Really, in effect. Yeah.
I think to follow your dating example there, I think kind of like the filing your tax return and not paying is kind of like the. It's not me, it's you. I think that's the. That's what you're saying. You're like, you're. Like, I filed and did my part. It's you. You're asking for too much in this relationship.
I want you to flex.
Okay? So file first. All right. File first. Now, once you file, you gotta start making a plan if you owe. And I wanna say, actually, I think. And just working with clients over the years on this, if you owe federal, you're typically gonna owe state. And I generally like to tell clients, focus on the state first, because they come faster. They start, you're going to get the letters faster. The irs, thank goodness, is disorganized and slow, and they don't even answer their phone. When you do try to call them.
And you're going to owe the state less.
Yes. It's easier if you think of, like, the debt snowball and Ramsey concept. Get that one out of the way first.
Yep. Now, it doesn't mean you. Again, ignore the irs. Yes. But from a financial standpoint, you want to think, okay, I'm going to get the state out of the way. Yes.
And I think a lot of people think backwards. I got to get the big one. I got to get the IRS off my back. The big, bad irs, and I'll deal with my state later.
No, no, no.
Work with your state first.
Yeah, I write these down, too, because I love this. I've got several articles out there. I always need to update them with new. So always file everybody. If you're taking notes, always file number two. Focus financially on the state first. And if I could say this, too, you need to buy some time. And I'm going to give you a spoiler alert because I want Matt to comment on this. He's really good at it. Is. He's made these phone calls. Calista. Yeah. Is you going to let you file, and then you got to let them know it's coming. There's a technique there. And then the fourth step I want to say, is you're going to start looking for the money somewhere to borrow. You want to borrow money from someone. You don't. You'd rather have almost any other borrower, any other lender than the IRS of the state. Now, that's going to be step four. You kind of need to ask for a breather. What do you have so many.
Yeah, the breather is this called 180 day to pay. So as long as you owe less than 100,000 to the IRS, you can call them up and just say, hey, I'm going to pay this all off in one lump sum within 180 days, they will automatically grant that as long as it's under $100,000, no financial statement you got to send, which in other options you have to disclose all your finances and why you can't afford to send them money. But this one, if you're under 100k or if you can make a payment to get you under 100k, so maybe a 120, you know, like I can throw them 20 now, then frickin call them and be like, I'm going to pay you in 180 days. And I've had to do that myself. A lot of clients have to do that. They're a little surprised at the end of the year, like, dang, that was. I have more than I thought. Yeah, but I can catch up. You know, just give me, give me six months and I can get back up and get on top of it. So always start with 180 day to pay. There's no fee for it, there's no setup fee. You don't have to make monthly payments. You can just lump sum it in 180.
Have to call them.
But you got to call. Yeah.
And I've got another major tip. So you got a call. And then with the state it may be 30 days, it may be 60. Every state's going to be a little different. Yeah, but you're going to make two phone calls, maybe a third one to your mom and have her give you a kiss and a hug. But you're going to call the IRS, ask for 180 day grace period and then estate, get whatever grace period you can get. Then number four, you're going to start looking for a lender that could be friends, family, sell crap, equity in your home, second mortgage, I don't know. But the interest and penalties are always going to be cheaper after October 16th. Now if you're paying between April 15th and October 15th, the IRS interest rates aren't that bad. You know, credit cards are worse. But after a October 16th, this little grace period, I want to point out, you're not getting out of penalties. You don't get that interest, you're just getting out of them, making your life hell.
Yeah, they're not in the collection process. You're not getting nasty letters. There's no tax lien that's going to go out. There's no wage garnishment that can hit your bank account or your wages.
The penalties are adding up. Yep. And those are my articles, yada yada. Now here's another important tip. The IRS will never call you, the state will never call you. Now I had a scam artist call. I've, I've had two scam interactions in the last 10 days. Phone calls and one I made outbound to what I thought was a support company of HP because I was trying to get a solution and I got routed to a scammer and I got sucked into for a good five minutes until I realized what was going on. And then I had a call this morning from a scammer. Now you don't want to let loose your pissed because scammers can, who knows what damage they could cause. Yeah. So just say, sorry, not interested, hang up. But the point being is the IRS will never call you. They're going to send you letters, you're going to call them. So just ignore any calls from the IRS freaking out, saying you need to send money. Yeah.
Now it's funny. I went to the IRS website just to make sure the programs are the same and the numbers. And the IRS gives you three options if you owe the IRS money to make a payment arrangement. Do you want to know what their first option was?
Apple Pay.
Pay now.
Pay now. Here's the.
This is funny. I thought this was funny. Why would they're like zero setup fee, no future penalties or interest. Pay the amount due today. Like what? Someone go to the IRS website to learn like how do I set up a payment arrangement with the IRS because I can't pay.
All right.
Anyways I was, that was fine. Then they got the short term payment plan that was 180 days or less. Now if you need more than 180 days, you can do a long term payment arrangement installment agreement. Called an installment agreement. Yep. And so. And that you're typically going to pay monthly in that type of deal. But what happens there is if you owe 50,000 or more now the number changes if it's 50,000 or more because it's a long term payment arrangement, you have to disclose your finances. If you're under 50 and you're like I'm going to pay it over time, you don't have to disclose your financials. You can kind of outline over a six year window how much you can afford to pay to try to get paid off. But if you owe more than 50, you got to divulge your assets and your income to the irs, which I know no one is excited to do. They know your income for your taxes, but do you want to give them all your assets to say I can't afford to pay you, but I've got all these assets over here.
Well, and I'll say sometimes you don't have a choice. And it's not a completely terrible thing. You're, you're, you're like, yeah, you want to see the trade wreck? Here it is. Yeah, yeah, yeah. There's nothing much to show. Yeah, you're, you're in a problem because your finances are a problem. So just pony I be honest, disclose. But I will say it another way too. The installment agreement is the fallback because you could find any other lender. See, during that 180 days, you're going to be shopping it, you're going to be calling up your great uncle, your aunt, your grandma, your mom, signing loans, at least whatever you're going to sell. Crap. That RV sitting on the side of the house you drove twice last year. Sell it. The boat, Sell it. Yeah, you can always get those assets back. But you can't get your life back sometimes emotionally when you have the IRS hanging over you. So sell assets, borrow money. Then if that doesn't work and hopefully you've got the state at least taken care of, you go to the installment agreement. That's where you have this 50 grand or more disclosure than under 50 grand is automatic. Typically it's going to be a five year payment plan. You're still going to pay penalties and interest. See, that's why you don't want to be in an installment agreement. Penalties and interest continue. So it's not like you stop that. Oh, I want an installment agreement. So I'm your preferred borrower. No, you're not. Yeah, they just stop collection. That means they don't lean your house, they don't garnish your wages, they don't hit your bank account to see if you don't sign the installment agreement. They're going to come hard. Yeah, I've had clients call me Mark. I'm hiding behind the couch. There's an IRS agent at my door. They will knock on your door and call you. They will knock on your door.
Yeah, and those ones, they're the criminal enforcement division usually. And when it gets to that, it starts to get criminal. If someone's starting to come on those, they actually have badges and guns. You know, they actually have badges and guns. Okay, so acts on the, on the installment agreement. It's 72 months is the max time which could be of six years. So yeah, 72 months. Now there's a fee for that. There's a monthly fee. It's like 31 bucks a month that you're getting charged a fee just to be able to have that opportunity to pay. Kind of. It's kind of.
Kind of a bummer.
But again, you're buying yourself time.
I love it. Very beneficiated. Oh, I have one other tip. Okay. For you business owners, heaven forbid one of you are listening. And this is payroll liability. Oh, we've got to say a word or two about that. Payroll liability is like sacred money to the irs. So if you run a business, you've got payroll and you weren't able to make that 941 deposit because you had to pay other bills. There is no other bill that's more important than paying payroll taxes that you withheld. We've had clients that I've met with that two years later were like, you're in jail. Oh, okay.
Yeah.
No, it is bad. They will prosecute and they would fashion hard. So that's. So just be careful. Any of you that have payroll liabilities, those are next level, and you're literally selling everything you own. And hopefully it's not that bad. These clients, they literally have blown the money. They had nothing. And the IRS is like, okay, you're going to go to jail. Then either we want money or you go to jail. And that's what it came down to. Yeah.
Yeah. I feel bad for anybody that got in that problem for everybody. Make sure that's when he's saying payroll. This is like the withholding you're doing from your employees to pay their taxes. And you don't actually send it to the IRS because you didn't have any money in your business, but you had enough to at least cut your employee their check. That is dangerous. All right, well, what if I can't even do a payment agreement? There are some options where you can try to settle with the irs. Now, are we.
Is it two in the morning that I'm eating cereal water?
That's right. Settle with the IRS for pennies on the dollar. Do you owe the IRS any money? Do you owe the IRS more than $10,000? Call us at 1-800- you- know, settle for less. And then.
Yeah, then it's insult to injury. I just blew five grand with a company.
Yeah, you owe the IRS ten grand. He just spent five grand.
Yeah.
So now be careful on any of those services. That's what the joke we're trying to make there, if you didn't sense the sarcasm is. That's a lot of BS about settling for pennies on the dollar. Yes. Can you cut deals with the IRS and something called an offer and compromise. Yes. We've helped clients over the years do It I've done them before, Leach. And one of our attorneys in our California office has done many of these for clients over the years. But in an offer and compromise, what you're doing is you're telling the irs, hey, I want to cut a deal. And the IRS will cut a deal in a couple of different ways. You have to have a reason. You have a reasonable basis. The first is doubt as to liability. You're basically saying, hey, irs, I actually don't owe you money. Now, usually this one is used as let's say you filed your taxes and you said you didn't know and the IRS reassessed it and said, ah, we're denying these deductions or we calculated a different way. Yeah. The audit happened and you. And, and they end up determining you owe them money. Well, you can sip or let's say. Yeah, or let's say and I've had this, I had this one long time ago. I did this in law school, by the way. I was, I did these tax kind of law schools. That was like 20 years ago.
Crazy.
But is if you missed certain deductions and when you file then you need to amend and then the amendment becomes an issue. The amended return becomes an issue. Now you can file the offer and compromise and you have to battle it out with the irs. The nice thing about the offer and compromise and I'm going to get to the other basis you can do but on doubtless liability. The nice thing about an offer and compromise is it, is it stops the collection process too while it's pending.
Yes.
Okay. Now the IRS is like, hey, we're going to look into this. Now you had to disclose all your financials again. You have to give this financial statement to them. But you're going to say, I don't owe it because of X. And a lot of times important because a lot of times you've been dealing with like you can't talk to anyone at the IRS and you're not on any. Now it's going to go to a real revenue officer.
Yeah, I'm loving where you went with this. Let's unpack it a little bit more. So a lot of people get this big tax bill and some of their reactions might be, and my CPA sucks or maybe I shouldn't have done it on Turbo. Yeah. And someone goes, you owe the IRS that much. Did you deduct this? And all of a sudden your little friend group starts saying, dude, you got probably a crappy tax return. Yeah. So you, you want to pay the IRS and Try to get your money back. I would. That's. I like this doubt as to liability, you're going to raise the red flag. And when you do a doubt as to liability, you're going to submit that amended return and say, here's how much I really do owe you. And that's going to unwind a lot of penalties and a lot of interest and freaking love it. The one cautionary point I have here, though is this is why putting your head in the sand could be disastrous. Because claiming doubt as to liability, there's clocks that start to tick. As to amending a return, you could wait too long and the amendment is not allowed. Or the IRS may have done this assessment Matt talked about and then you have 90 days to reply. You never reply. Yeah. So if you miss some of the statute of limitations, then you can't do doubt to liability. They're like, you already had your chance to claim this, you missed it. So the sooner you get engaged in this process, the better.
Yeah. Now, in the offer and compromise, you're basically negotiating, right? And the IRS could be like, not no dice at all. All right? But you can actually negotiate this. And a lot of times what you need to do is you have to come up with a lump sum payment, all right? Or you can get a payment plan up to 24 months in an offer on compromise. But if you need more than that, you're back to installment agreement, long term installment agreement up to six, six years. So. So if you're going to cut a deal, you've got to come up with the money at least within 24 months. Now, here's a trick to this, and this is really important was I did some of these in law school. I remember my law school professor, he was like, whenever you're making an offer to pay, remember you don't have money. So you're going to explain how you're going to come up with the money. Mom is going to loan me some money to pay this tax. Because if you're like, I'm going to pay this tax, I'll pay you. I'm going to, you know, I owe 100, I'll pay you 50 grand right now. They're going to be like, we're just going to go take that 50 grand and then come get the other 50 later. Like the IRS has the ability to do that. So you need to have a good answer of either I have future income, I'm going to make that I'm going to come into, or that you wouldn't be able to collect or maybe it's a family member that's going to loan me money. Otherwise, if you're like saying, I'm going to drop this, right. They're like, why isn't this on your financial statement that you sent us like this 50k that you're trying to negotiate.
I had 50 grand on my mattress. You do. We. We'll get you on Saturday morning.
Exactly.
Work with the natural police. And if there's no tax on these mattresses, we're going to have a problem.
Yeah, it's going to be a problem there, too.
Yeah.
Now we're going to look into that. Now here's a subtle.
I'm going to help those tracking the conversation. Matt quickly moved to cutting a deal. Remember, if you're in the doubt as to liability lane, you're going to stay in that lane until you get an offering. You're going to be like, okay, we're going to fight this out. Hopefully you don't miss any deadlines. You're going to get proper counsel involved. Tax lawyer, CPA or enrolled agent knows what they're doing, and you're going to start that process. If and when that's over. Meaning you doubt us, the liability, there's still some amount. At the end of the day, maybe you get it all resolved. Maybe they end up owing you. We have clients that do that. They end up getting a refund when they do it. Right. But follow that process to its conclusion. Then if you still owe. That's when Matt was like, now you cut a deal. So the offering compromise is this proposal as to doubt, as to ability to pay. So it's doubt to liability, and then I don't have the ability to pay.
Yeah, somebody's like, doubt is to collect ability. The IRS can't collect it, which is the. You have no ability to pay. So. But you're like, but I can come up with the money from a friend, from a family member. You know.
Now here's a subtle point, too. This is really a good. Giving your inside secrets here. This is because notice what Matt said. When you make your offer to cut a deal, you're going to say, my mom's going to lend me the money. If you say, my money's already my bank account. My mom gave it to me. Game over. They're going to come take it. Yeah, you got to play poker, watch a little bit of ESPN poker to. So some of you may go, well, Mark, you said, I have 180 days to pay. Go borrow from my mom and just pay it. I'm Going to. I'm going to play poker. I'm going to negotiate a lower amount and then tell him mom's going to give me the money. I'm not just going to go borrow from mom and pay him. You're saying I could negotiate? Yes, you could reality check this little process of negotiation and you can't pay and you got to expose yourself and all that. At least a year and a half.
This is the longest poker game of your life.
I love that. Yeah. We're talking two years. It's not like you can email them On Monday, on January 3rd, hey, I owe you. But you know what my loans get. Will you be willing to take 30 cents on the dollar? And they email you back? Yeah, sure.
You're at the poker table. The IRS is the dealer and they're like, this is them turning the card. Yeah. So you got to. This is going to take a long time is what we're saying.
Yeah. So don't. This is why these radio show commercials, TV commercials are in our opinion, a lot of times consider scams because they make it sound so easy.
Yeah.
It's not that they're not right. You can settle with the irs, you can negotiate and these techniques we're talking about, you will use. Yeah. But buckle up and you know what's been happening the entire time in this process, your penalties and interest are adding up. Yeah.
If they don't cut a deal. And here's the other thing is you're not counting on being broke in a year or two by the time this thing's done. And so now sometimes it's like, you know, there's a situation and you really are. And you're gonna stay broke and you're not gonna. Your business isn't gonna grow or. But you know, because at the time you cut the deal, they're going to be updated. You're going to be updating your financial statement. And so you've got to stay broke. Yeah.
Let's give a couple hard luck examples. That would be good situation. Some good examples of this. Let's say, heaven forbid, you're married, your spouse dies and the business goes down the drain. There's a big tax liability, you put your husband or wife in the ground. And. And this probably be more on the. Maybe the. Maybe it's a female breadwinner, maybe it's a male breadwinner, but the non breadwinner is left holding the bag. And they don't have a lot of options to create income. And there's a huge liability. They see themselves really living a very different lifestyle for the next five to ten years. They, they're. Maybe they're able to get onto Social Security. Maybe there's, they're going to start picking up a job at the local Piggly Wiggly. They're just there. There's not many options. That's a great candidate for cutting the deal because there's no future chance the IRS is going to get their money. And there's no. And you don't have a future plan for big money. They're going to try to figure that out. Another example would be maybe you're single and you get in an accident and you're disabled. You literally have lost your ability and livelihood. Career, Ability to make money. I mean, career and all that. And it's an ugly situation. You might have a four to five year window that's not looking good. How do you deal with the irs? Makes sense. The IRS is going to see that you are disabled. You will literally provide medical reports to prove that. And they're like, all right, we tap out and the poker game ends a year and a half from now or more. Because they finally figure out you're telling the truth. Now, let's just say you have a crappy year in real estate. Things don't go well. You owe the IRS 100 grand and you're broke. You don't have much and you can't pay the irs. So you're like, I'm going to go cut them a deal. The IRS is going to say, okay, tell us why you can't pay this in the future. Well, and deep down you're like, well, I guess I could, because I'm going to go out and make. I'm a real estate guy. I'm going to, I'm going to have a good year or two years. I'm going to cash them out, but I want to cut a deal. Now, if the IRS can see any sort of horizon of your career where you're going to make that 100 grand,
they're not cutting the deal.
They are not cutting a deal. So when you call these folks on the radio programs or the TV shows and they go, we can settle with pennies on the dollar and you have the ability to pay the IRS back in the next five or six years because you're not disabled and you don't. And you, and you do have skills, forget it. It's not happening. So, yes, you could be broke right now, but if the irs, this is the secret. If the IRS thinks you can pay that back in six Years, they're going to make sure they don't cut a deal with you. So that's kind of the trick. So, yes. Mobs loading you money, that's still a sidebar to the fact they're like, hold it. You have a great career you're going to make.
Yeah, forget it.
You. It's like, yeah. So that's an important point.
One thing I want to bring up because it's always common question is, well, I'm just going to file bankruptcy then. Now, I was actually looking into this here just because the rules have changed a little bit on bankruptcy and whether you can actually bankrupt a tax debt. Traditionally, you're not. You were never able to bankrupt the irs. The IRS is like, nah, you could go bankrupt your mortgage, your credit card. But student loans, tax debt, we. You got to pay us. You know, we're the most important creditor out there.
So.
But if they are, I'm just looking into this because I knew the rules changed if the debt is over three years old in a chapter seven where you're doing a complete liquidation because you're like, I am totally insolvent, meaning I'm broke. I have way more debt than assets. You can actually get some tax debt forgiven in a bankruptcy. Now remember, there's a lot of consequences to filing bankruptcy. Don't plan on getting a loan in the future. You really are going to have to be broke. You have to disclose everything in a process. It's, you know, so.
And.
But if you have a lot of other financial wreck in your life, plus some tax debt of three, three years or older, this might be something you want to consider talking to a bankruptcy lawyer about. We don't do this, but it might be worth considering talking to a bankruptcy lawyer to see if it. If your tax debts are some that could be bankrupt.
And notice what Matt just said, there's a Keith point in there. Three years. Yeah. Old after liability. So if we're on the fall of 23 right now, so 24, 25, 26, we're talking in the spring of 2027, you could finally start opening up a bankruptcy.
Right.
Do you really want your life in disarray for the next three and a half years? You know what that. That does to you emotionally? Yeah. Family, your relationships. Oh, but I'm going to hold out because I want to cut a deal. Yeah. You know, I'm going to force them. I'm not going to pay the irs. Okay. Good luck with that. Yeah. Because every other relationship in your life is going to be screened beyond Belief. Yeah.
But maybe you're sitting there, you're like, I got a 2017 tax debt. My whole life's upside down. I got judgments all over the place. Maybe it is time for you to go.
Yeah.
Look into that. That could be possible. I understand that there could be a. But it's not a good plan. This is kind of like you're forced into a corner and you've got nothing else to do.
Yeah, yeah. And I like the word used there too. It's not a good plan. For those that are like, how am I going to get out of this situation this year? And you're trying to make a plan. Yeah, this is not a good plan. Now, for those of you that are showing up to the table now, finally emotionally able to deal with it, and you found this podcast or someone sent it to you, and we're glad you're here and our heart goes out to you and that time's past. That was four years ago and you're finally coming up for air. You regret it, it's over. I get it. Maybe there was some triage with family members or career. So immediately talk to a bankruptcy attorney, pay them for an hour. Don't look for a free bankruptcy attorney because what are they going to recommend? Bankruptcy? Pay someone for a real consult. Find out what your options are, where they're not motivated to sell you their idea.
Yeah, but. Oh, well, all right.
A lot of final good advice.
Yeah. I think just to go back to where we started, which is get engaged, make a plan, make sure you file, and then start communicating with the irs, depending on your situation and what you need. I think a lot of these strategies can be used in, in combination too. I'll just say that. So if you're like, I'm going to try the 180 day to pay and see where I get even. If you're like, there's no way I could pay that 100 days, well, go get it, because it's out there and it's automatic. And you don't have to file this stuff with the IRS if you owe less than 100 grand. So. And then the end of 180's you can decide, ooh, I'm gonna need to get an installment agreement. And then if you fail on the installment agreement cause you are broke and you still don't have money, you can think, hmm, maybe I do need to do an offer. So it's not like you gotta pick what, like these are all exclusive. You might have to use a few of these in the process, particularly if you owe a large amount to get your way through it,
everybody, you're not alone. Hang in there. There's a way out. Have faith. Get educated. Continue to talk about it. Closing down communication with family members and advisors and keeping this to yourself because out of embarrassment or fear is only going to make it worse. The people that love you will understand and they'll help you through it. And our attorneys will give you a straight answer here. And we have a tax pro network with resolution specialists that our tax pro network has a lot of folks that are just excellent at this resolution gain. They can give you another perspective in some of you might find some information that contradicts mining mana okay. By get a third opinion.
Yeah.
Really don't look for the answer you want to hear. Keep searching for the right answer because, you know, things change.
Yeah. And that's a good tip there because there are like CPAs or enrolled agents that actually do tax litigation with the IRS or go work out these disputes. They don't actually have to be an attorney. So if you're an enrolled agent or a CPA and there's many marks tax pro network that do that, our firm does it a little bit. It's not a big specialty in what we do. So you might want to look there if you're like, I need a professional understands this stuff and good tax planning. Maybe look at the main street tax pro network at marjorjclaw. Com.
Thank you for that.
Yeah. Appreciate it.
Thanks, everybody. See you next week.
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