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I am disabled with bipolar and I toook 23000 out of my 401k

due to hardship. The IRS...
I am disabled with bipolar and I toook 23000 out of my 401k due to hardship. The IRS says I owe 11000 including the 5000 they gave me back on 2011. Will I be able to get one of those tax attorneys to make it less like they advertise. I have tons of medical bills and household bills of people taking care of me and I cant afford this what do i do?
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Answered in 5 minutes by:
1/4/2013
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,872
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified

Robin D :

Hello and thank you for using Just Answer,

Customer:

hi

Robin D :

You do have options and an Offer In Compromise (which is what you deiscribed) is one

Robin D :

Hi

Robin D :

But

Robin D :

First you would need to set up a payment plan

Robin D :

The IRS would not even look at an OIC unless you do.

Customer:

i cant get it reduced. and what is a oic

Robin D :

Offer In Compromise
They generally approve an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time. Explore all other payment options before submitting an offer in compromise.

Customer:

would getting a tax attorney who tries to reduce the amount be a good idea

Robin D :

The payment plan is required first. You set up saying you will pay so much and then after it is accepted you can ask for the Offer In Compromise(OIC) to pffer an amount less than the full tax due.

Robin D :

You can get an attorney but get one you already know if you can

Robin D :

Those pennies on the dollar adds are not right

Customer:

what kind of a payment should i be allowed to make

Robin D :

Whatever you can realistically afford. I have asked for Installment payments for people at $15 a month

Robin D :

Apply for an installment agreement


Customer:

even when they owe 11000. also will this be put on my credit report and do they take the amount every year for your income tax refund. also do i need a attorney

Robin D :

Yes to all except the attorney. A good tax preparer can assist you with the forms if you want for the Installment. A CPA or enrolled Agent would be able to assist with the OIC (and would be less expensive).

Customer:

should i just to it myself and agree with the 20 payment a month. And would I have to pay interest. also would a cpa have a better stance on reducing the total amount

Robin D :

A CPA would be bale to look at the return info and advise if you di not take all the deductions you were allowed or if you truly owed less but they cannot get the IRS to just reduce the amount of tax. You should set up the Installment amount your self (as long as you know the amount is correct that you owe). Have a professional look at your returns and make sur ethe iRS is correct in their assessment , then set up the Installment Agreement.

Robin D :

be able* sorry not be bale

Customer:

why do lawyers advertise to reduce tax liabilities

Robin D :

I do not know why they would do that, I know the IRS has issued warnings about the ads that promise pennies on the dollar for reductions of tax owed.

Customer:

thanks

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,872
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified
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Robin D.
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,872
15,872 Satisfied Customers
Experience: 15years with H & R Block. Divisional leader, Instructor

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