Service

Personal Injury

Description

Our client was a small business owner who was unable to generate liquidity post pandemic. The mix of higher credit card utilizations and increased interest rates led to lower margins. These mitigating factors increased the amount of debt, increased the tax burden and negatively impacted taxpayers’ ability to pay. We were introduced to the tax preparer who had unresolved tax debt. Our process began by preparing the clients’ books to get a profit and loss statement. We were also able to develop a statement of assets and liabilities. We were able to get a good understanding of the client’s ability to repay. We also were able to get an accurate estimate of the tax liability owed by the taxpayer. This allowed us to develop a strategy to deal with the internal revenue service and the state tax authorities.

Summary

We were successfully able to enroll the taxpayer in a repayment plan. This taxpayer was able to avoid collections or damage to their credit score. We were also able to stop the annoying collection of calls and mailings. After we established a payment plan, we moved forward with a settlement offer. In most cases the state does not offer a less than tax offer. In our situation we were able to negotiate a settlement offer that was a less than tax offer.

Process

N

Develop an income statement and balance sheet for the business

N

Negotiate a repayment agreement with the taxing authority

N

Present a less than full tax offer to the state and federal tax authorities

N

Successfully negotiate a settlement of full and final tax liability

Final Result

We were able to present a less than full tax offer to the taxing authority. The taxing authority settled for cents on the dollar. This provided the business with the needed liquidity to continue operating. The taxpayer collection phone calls and letters stopped. The taxpayer was able to choose how to repay the tax liability. The taxing authority accepted the less than full tax offer and agreed to settle the debt with the client.