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Ask Michael Lykken, Esq Your Own Question
Michael Lykken, Esq
Michael Lykken, Esq,
Category: Consumer Protection Law
Satisfied Customers: 85
Experience:  Partner at Soares & Lykken, Attorneys at Law
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I have had a tax lien filed by the IRS on me due to an audit

Customer Question

I have had a tax lien filed by the IRS on me due to an audit done several years ago that resulted in me oweing an additional $20 - $30K in back taxes. It was a litigimate audit. I used to make a lot of money and had a $2.3 million mortgage. As we all know
you are able to deduct your mortgage interest at tax time. Well we were doing that and I guess we found out the hard way the you are not allowed to deduct interest on any amount over the first one million dollars. Thus my accountant is a pretty smart guy but
because I was the only client he had ever had the had a mortgage that large he had never experience that before. Even his tax software was not programed to pick it up. According to the auditor it was a very unheard of law that almost all folks dont know about.
Anyway, the audit occured in 2009 when the economy was collapsing and I was losing everything. I was a large RE developer and New home builder. I had approx. $26 million dollars of debt when RE went upside down so like many in my position we lost everything.
Then of course while all that was happening I get notified that I am being audited by the IRS. You can imagine that was great news. I explain all of this because I did not come away with much money and therefore am unable to pay the IRS. They have been working
with me and very understanding as time has gone on but this last year they finally decided to file a federal tax lien on me and my wife. We are in the process of trying to get our life back together at 61 years of age. And starting all over at our age is not
easy but even harder when you have this type of anchor around your neck. With that all said my question can anyone help me with how to deal or negotiate with the IRS to get rid of this debt so I can move on with our lives? Wasnt sure what category of law this
would fall under so if I have selected the wrong one would someone let me know please so I can resubmit to the right one? Thank you, ***** *****
Submitted: 1 year ago.
Category: Consumer Protection Law
Expert:  Michael Lykken, Esq replied 1 year ago.

Hello Glenn, my name is ***** ***** I am happy to help you with this question. First, I'm sorry to hear that you are going through this. The IRS is actually pretty reasonable. Have you made an offer in compromise? That would be your next step instead of trying to keep paying the tax owed. Generally, if you make a reasonable offer in compromise they will accept it and remove the lien. This is especially true when dealing with income taxes. They are much less forgiving when it comes to unpaid employment taxes. The IRS page on offers in compromise can be found here: http://www.irs.gov/Individuals/Offer-in-Compromise-1. I hope this helps, and let me know if you have additional questions.

Customer: replied 1 year ago.
Thank you Michael!I have looked into the OIC and am somewhat familiar with it. My problem of course is money. I dont want to offer too much and they take it and then feel I should have offered less. So do you have any suggestions on what a reasonable offer would be or what the initial offer should bee? And do they ever allow payments for the offer or is it always full amount?Thanks,Glenn B
Expert:  Michael Lykken, Esq replied 1 year ago.

Hi Glenn, You're very welcome. The IRS wants you to make a reasonable offer of what you can reasonably pay, and that is based on your resources. They will want to see a balance sheet, income statements, and other things to verify what you are able to pay. They don't take payments for an offer in compromise, so you have to be willing to pay it off and be done with it. This is the kind of situation where they are willing to take more of a haircut on the debt because they don't take payments. Let me know how else I can help you.