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Digging Out of Tax Liabilities Resulting from 10 Years of Non-Filing

by | Nov 11, 2022 | Firm News, Tax |

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All too often, we see cases where good people get overwhelmed with the snowball effect of falling behind in complying with tax filing and payment obligations. In this week’s success story, we talk about solving that very problem.
We met with an elderly Taxpayer in the construction business, who utilized subcontractors to perform work for him. While the 1099s issued to him previously showed a substantial amount of income, his actual earnings were modest because he paid subcontractors. Unfortunately, he did not keep good books and records. Overwhelmed by the process, he eventually stopped filing tax returns, knowing he would owe much more than he could pay. Like many of our clients, he ignored his filing obligation, and when he came to us, he had accumulated 10 years of unfiled returns. The IRS had filed substitute tax returns for a number of those years on his behalf and assessed a staggering tax balance of over $1.2 million. As one can imagine, this balance seemed insurmountable to him.
Once hired, and as in all our cases, we encouraged and helped the Taxpayer to become compliant, ensuring he was current moving forward and was setting aside the proper amount of taxes to pay his current and future tax obligations. Once he met compliance, we assessed his specific situation to determine the best plan of attack and determined that pursuing an Offer in Compromise would be the best option. We prepared an Offer in Compromise package demonstrating that our client had absolutely no ability to pay off the liability, and promptly filed with the IRS. After some back and forth, the IRS initially denied the Offer. We knew, however, that our client was a perfect candidate for the Offer in Compromise and continued to diligently pursue this relief. Eventually, we successfully negotiated an agreement with the IRS to settle the entire debt for less than $70,000.
If you are a Taxpayer who is behind on your filing or payment obligations, and you have given up hope, there can be a light at the end of the tunnel. While all cases are different, at David Coffin PLLC, we use our experience and proven track record to find the best solutions customized for our clients.  Let us review your case and develop a game plan to help solve your specific tax situation.