We currently owe the IRS $45,000. We are in serious financial debt (credit cards) and we do not know how to handle this added expense. In 2008 we liquidated all IRAs to purchase a second house and did not have taxes withheld. We were paying $400 per month to the IRS HOWEVER THEY NOW WANT A NEW AGREEMENT AND $3,500 TO REINSTATE THE AGREEMENT. At this particular time we cannot pay the reinstatement fee. My. husband is receiving social security and I am employed but we are financially strapped. Any advice you can give us would be appreciated.
State/Country relating to question: New York
We have a debt consolidation company to negotiate with creditors. They do not handle taxes. We have also called some online tax relief companies but most of them are quite expensive.
Hello and thank you for using Just Answer. I am really sorry for the financial troubles you are having. I would suggest that you contact a bankruptcy attorney as soon as possible.Bankruptcy is a legal status of an insolvent person or an company. An insolvent person or company is defined as one who cannot repay the debts they owe. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor.Please do not wait, at the very least talk to an attorney that offers free consultations. Good Luck.
Over 17 years performing accounting, tax and consulting service for individuals and small business.
will this eliminate tax debt as well as all other debt
It is possible, there are several rules around the discharging of tax debt. Such as the taxes are for income tax, there was no fraud or intent to evade the tax, the tax debt is at least 3 years old, and your returns were filed. There are also rules around the number of days that tax was assessed. A qualified attorney in bankruptcy will be able to answer all your questions, but be prepared to provide the attorney of your choice with all credit card statements, tax returns and tax assessments.