Legal Question in Tax Law in California

I owe the IRS $23,000 [including penalties and interest] for 1994. I did not file my return for that year until February 2003. At this point I am in the uncollectable category due to a fixed income [I am retired]. However, I will be coming into a small inheritance before the end of the year and I do not want to hand over 23K to the IRS. I have heard advice from tax attorneys and CPA's and each has a different story about the statute of limitations. One says the statute of limitations for the IRS to collect started when I filed in 2003 and that if I make a payment plan with the IRS that once the ten year statue is up, which would be in two-and-a-half years, that I am not obligated to pay the remaining about of the payment plan. Another tells me that once I set up a payment plan that I have to pay it out in full. I am at a loss as to how to proceed. Adding another thought to the mix, a very reliable tax resolution company has offered to delve into my records with the IRS [without alerting them about a small, forth-coming inheritance] to check out if I am in the IRS radar at all - their fee to do this is $1,500.00. And then if indeed a payment plan has to be worked out with the IRS the company would charge me and additional $2,800.00 for that service. Frankly, I don't know who to believe about the statute of limitations or the payment plan. I can't seem to get two straight answers that agree with one another. If necessary, I am willing to pay the "right" person to take charge of the matter, but finding them seems impossible. Please, please help me with some honest advice.

Thank you!!!

Howard George


Asked on 10/06/10, 7:09 pm

1 Answer from Attorneys
Carl Starrett Law Offices of Carl H. Starrett II

You should talk to a local bankruptcy attorney. If this is income tax debt, it became dischargeable 2 years after you filed the tax return. Most bankruptcy attorneys would charge you far less than the fee quoted by the tax resolution company to file a Chapter 7 for you.

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Answered on 10/12/10, 3:01 pm


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