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Tax delinquency - help needed

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    #1

    Tax delinquency - help needed

    Long story short, a good friend of mine has some severe tax problems, owing roughly $60K to the feds and $50K to NY State.

    He's single, owns no real estate/vehicles etc. Has a decent job paying about $80K/year.

    Paycheck already garnished, but at this rate he'll be dead before he pays all of this off.

    I've never owed anything on taxes, and am not the sharpest tool in the shed when it comes to advising him on where to go from here...

    What does the collective wisdom of this forum say? How does one get out of such a mess?

    All and any advice appreciated.

    Good luck to us all.
    No person in their right mind files a Ch. 13 with lien strip pro se. I have.Therefore, please consider me insane and clinically certifiable when reading my posts, and DO NOT take them as legal advice of any kind.Thank you.
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    #2
    Shark, I'm not too far off your friend re IRS - sorry to ask the VERY obvious question, but has he tried to talk to the IRS & NYS?

    If not - and I know this takes courage (something I don't want to deal with until Jan) he needs to try to talk to them...

    If not - does he have $$ for a good tax lawyer?

    OR...deep breath - see if a Chapter 13 would give him a better deal...at least then the INTEREST/PENALTIES stop...so does the garnishment.

    For $110,000 divided by 60 (five year Ch 13)=$1,833/month (if his DMI is higher it may be more...) AND if anything is OLDER (and filed timely at the time) than THREE years old, then those taxes are NOT (necessarily) paid at 100%!!!

    If he does 13, maybe it's time for a car...BUT if a 13 is not available, I think time for a good tax atty/CPA/type person...

    AND if you don't mind Shark, if your friend does go to a tax lawyer, I would REALLY like to know how that turns out....

    Comment

      #3
      IAO has a good idea. I too am behind a bit. Knocked it down from 27K to about 10k at this time. I too thought I would not outlive this. I even bargained with IRS to cut my payments in half (more interest though). Here in FL we have no state income tax so it is tax no paid in past due to all that went on fighting my enemy. Before I was about to be levied on I simply called IRS to start a payment plan. Have not missed one yet. Don't want that hassle. I think there is a max percentage they can take from your garnishment. He may just have to accept it. That is, if IAO idea is not possible. 'Hub
      If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

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        #4
        When your friend talks to the IRS - perhaps he could discuss an Offer in Compromise?

        404 | Internal Revenue Service
        http://www.irs.gov/individuals/article/0,,id=243822,00.html
        404
        ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
        Not an attorney - just an opinionated woman.

        Comment

          #5
          Many a thanks to everyone who responded.

          My friend is not a very capable negotiator. He could barely pull himself together to ask for my advice (while having no clue that I filed Ch. 13 myself) and I'm likely the best friend he has at the moment.

          All of his tax debt is older than three years. Most of it comes from returns that were never filed, though.

          With all the garnishments taken out (there are student loans as well) I doubt that he could put away money for a competent tax attorney...so I wouldn't even attempt suggesting that one.

          More than willing to listen to additional opinions/advice...

          Good luck to us all.
          No person in their right mind files a Ch. 13 with lien strip pro se. I have.Therefore, please consider me insane and clinically certifiable when reading my posts, and DO NOT take them as legal advice of any kind.Thank you.

          Comment

            #6
            Hopefully he has filed the back taxes now.
            Filed 11/17/11 Chapter 13, 341 meeting 12/21/11. Plan confirmed 1/19/12 - DISCHARGED 12/16/15

            Comment

              #7
              Originally posted by mountanddo View Post
              Hopefully he has filed the back taxes now.
              Yes he has...

              Good luck to us all.
              No person in their right mind files a Ch. 13 with lien strip pro se. I have.Therefore, please consider me insane and clinically certifiable when reading my posts, and DO NOT take them as legal advice of any kind.Thank you.

              Comment

                #8
                Originally posted by shark66 View Post
                Yes he has...

                Good luck to us all.
                You know shark, as long as you don't do it for $$$, ANYONE can represent him - anyone can act on his behalf with the appropriate power of atty form - with the IRS...

                Comment

                  #9
                  That used to be true (regarding the POA). Now you need to be at least a registered preparer...they redid the POA forms in November of 2011. I now need to put my actual CPA license number on the forms (used to just be the licensing state). Usually the filing of the returns will bring the amount levied down considerably (when they're not filed the IRS files them pro-forma but will not include dependents, itemization, etc. as they use what's in front of them - usually just income). Did he get a good accountant to do the delinquent filing?
                  over $100K cc debt,$20K taxes,$332K mortgages/value $190K,surrendered
                  Confirmed, $801/month 56 down,4 to go

                  Comment

                    #10
                    Originally posted by Ifonly View Post
                    Did he get a good accountant to do the delinquent filing?
                    No clue. I just walked out of the whole thing because any piece of advice that I've given was questioned ad nauseam...and my time is expensive, unless I *choose* to donate it like I do here...

                    Good luck to us all.
                    No person in their right mind files a Ch. 13 with lien strip pro se. I have.Therefore, please consider me insane and clinically certifiable when reading my posts, and DO NOT take them as legal advice of any kind.Thank you.

                    Comment

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