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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
Experience:  10 years experience
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Because of financial setbacks in 2006 and 2008, with my

Customer Question

Because of financial setbacks in 2006 and 2008, with my business losing clients because of the financial crisis, I was unable to pay all my federal income taxes. Is there a statute of limitations on this?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: In 2006, I owed $9,763.62 which increased to 16,020 with penalties and interest. In 2008, I owed $862.97, which increased to $1306.41. I currently have some major health issues, cannot work and am living solely on my social security benefits.
JA: Is there anything else the Accountant should be aware of?
Customer: I have tried to pay the back taxes over the years but am at the point now where I cannot afford it. I have congestive heart failure, with a pacemaker/defibrillator implanted, type 2 diabetes, COPD, asthma, and sleep apnea. I see 3 specialists at least once a month at $35 copay to each. I don't qualify for disability because of (1) my age and (2) my SS benefit is too high.
Submitted: 10 months ago.
Category: Tax
Expert:  emc011075 replied 10 months ago.

Hi. My name is ***** ***** I will be happy to help you.

Yes, there's 10year statute of limitation on collection. But the clock does not start until the tax is assessed, meaning until you file a return for that year OR the IRS audit your return, find the discrepancy and mail you the first notice. There are also some instances when the statute of limitation is stopped and restarted again, for instance during bankruptcy or offer compromise (OIC). To find out exactly how much time is left on the debt before it expires, you will need to access your online IRS account (transcript) or call the IRS directly.

Here's a suggestion. You can try installment agreement that will stop the collection process or offer in compromise if you have not tried yet. In your situation it is very likely that the IRS will accept a reasonable settlement, that could be as low as 20 or 30% of what you actually owe.

But here's a warning. Find a respectable tax professional, enrolled agent or CPA. Many advertisements promise to get rid of your IRS debt, charge a fortune for it and all they do is filing few forms with the IRS that an experienced accountant can handle for much less. If somebody tells you that they can "negotiate" with the IRS, run away. And unless you are under criminal investigation or you committed a tax fraud, you really do not need a tax lawyer.

Expert:  emc011075 replied 10 months ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?