QUESTION:
I worked for several years as a contract (1099) employee. I just received a letter from the IRS stating that I owe them a lot of money. If I was still working that job, it wouldn’t be a problem, but now I don’t make nearly that amount of money. I’m nervous about speaking with a lawyer, can you tell me a little bit about the process and what my options are?
ANSWER:
The problem you are running into is, unfortunately, all too common. Many people who are being paid by 1099 have never worked without having income taxes withheld. Those years you are making good money, and it is usually after you have left that job and have stopped earning that kind of money that you realize that you are in debt to the IRS. The good news is, there are ways to get your tax liability resolved. The first step in the process is to make sure you get all of your income tax returns filed. After that, you and I would put together a financial statement so I can understand your current financial situation. This information will allow me to better advise you on which settlement option would be best in your situation. The two main options we have to settle your liability with the IRS is an installment agreement and an offer in compromise. An installment agreement is a monthly payment plan that pays down your debt similar to your car or house payment. An offer in compromise is an agreement between you and the IRS where you negotiate a lower sum that the IRS accepts as payment in full. After I review your financial information, we would have a follow-up meeting where we discuss all of your options and their potential impacts on your life. I encourage you to call me today to set up your free consultation so we can discuss a solution to your tax liability. I also handle real estate, family court, estate planning and probate matters. Please call today for your free consultation.