When it comes to dealing with the IRS, few situations are as stressful and overwhelming as owing a large tax debt. The IRS is one of the most powerful creditors in the country — and they’re not afraid to use their authority to collect what’s owed. From wage garnishments to bank levies and property seizures, their collection tools can quickly turn your financial life upside down.
If you’re dealing with IRS collections, penalties, or legal threats, hiring an experienced tax debt attorney can be one of the smartest financial decisions you make. This article will walk you through what a tax debt attorney does, what the IRS can legally do if you owe money, and what solutions may be available to help you resolve your tax problems — permanently.
What Happens When You Owe IRS Tax Debt?
The IRS has an entire arsenal of collection tactics at its disposal. When you fall behind on your taxes, the consequences can escalate quickly and affect every aspect of your life:
1. IRS Tax Liens
The IRS may file a Notice of Federal Tax Lien, which attaches to your property and alerts creditors. This can ruin your credit score, jeopardize loans or refinancing, and even make you ineligible for certain jobs.
2. IRS Wage Garnishment
If the IRS levies your employer, a significant portion of your paycheck can be taken — potentially leaving you with as little as $168 per week to survive on.
3. Bank Account Levies
The IRS can seize all funds from your checking or savings account. Once the money is gone, it’s gone — and the levy can be reissued repeatedly until your debt is paid.
4. Property Seizures
Cars, homes, jewelry, and other valuable assets can be seized and sold at auction.
5. Retirement Account Levies
Your IRA, 401(k), pension, or even life insurance policies can be levied to pay your back taxes.
6. Accounts Receivable Seizures
If you run a business, the IRS can contact your clients or customers directly and demand that they pay the IRS instead of you.
7. Private Debt Collectors
The IRS can assign your case to an aggressive third-party debt collector working on commission.
8. Criminal Charges
In extreme cases, the IRS can refer your case to the Department of Justice for prosecution. You could face criminal penalties and even federal prison for willfully failing to pay taxes.
Why Hire a Tax Debt Attorney?
A tax debt attorney is a legal professional who specializes in resolving disputes with the IRS and state tax authorities. They are licensed to represent you before the IRS and in federal court, giving you access to powerful legal protections and negotiation tools.
Here’s what a qualified tax attorney can do for you:
- Stop wage garnishments and levies
- Negotiate with the IRS to reduce or eliminate tax debt
- File legal appeals against unjust IRS actions
- Prevent asset seizures and foreclosures
- Advocate for you in audits and collection hearings
- Represent you in tax court or during IRS criminal investigations
IRS Tax Debt Relief Options Available Through a Tax Debt Attorney
There’s no one-size-fits-all solution for tax problems. The right strategy depends on your financial situation, the size and type of debt, and how long the debt has been outstanding. Some of the most effective tax resolution strategies include:
1. Offer in Compromise (OIC)
This IRS program allows eligible taxpayers to settle their tax debt for less than they owe — sometimes significantly less — based on financial hardship.
2. Installment Agreements
Set up a structured repayment plan over time — even up to 10 years — to pay off your debt in manageable monthly installments.
3. Penalty Abatement
If you have a valid reason for failing to pay or file your taxes, a tax attorney can request abatement (removal) of penalties and interest.
4. Currently Not Collectible (CNC) Status
If you’re facing extreme financial hardship, your tax debt may be marked as uncollectible — pausing all collection activity for a period of time.
5. Innocent Spouse Relief
If your spouse or ex-spouse caused the tax debt without your knowledge or consent, you may be able to avoid liability altogether.
6. Audit Reconsideration
If an IRS audit resulted in a high tax bill due to errors or missing documents, your tax debt attorney can request a review or correction.
7. Bankruptcy Discharge
In certain cases, old tax debts can be discharged in bankruptcy, depending on the type of debt, how old it is, and whether it meets IRS guidelines.
8. Tax Lien & Levy Releases
A tax attorney can negotiate the removal of liens or levies, especially if it helps you refinance your home or get back on your feet financially.
9. Trust Fund Recovery Penalty Defense
If you’ve been assessed a payroll tax penalty as a business owner, your attorney can appeal or dispute the penalty and protect your personal assets.
Case Example: Combining Strategies for Maximum Relief
In one complex case we handled, our client faced an IRS Trust Fund Recovery Penalty and mounting tax liabilities from a prior marriage. Here’s how we solved it:
- Filed an appeal to dispute the Trust Fund Penalty.
- Submitted an innocent spouse request to eliminate liability for the income tax debt.
- Negotiated an Installment Agreement to pay off the remaining balance over time.
By combining strategies, we eliminated most of the client’s tax debt and gave them a fresh start.
Don’t Wait Until It’s Too Late
The longer you wait to resolve your IRS tax problems, the fewer options you may have. Once the IRS begins seizing your assets or garnishing your wages, stopping the process becomes more difficult and costly.
Contact a tax debt attorney immediately if you’ve received any of the following:
- IRS Notice of Intent to Levy
- Certified letters from the IRS
- Tax lien filings
- Audit letters
- Collection notices
- Wage garnishment orders
Frequently Asked Questions (FAQ) About Tax Debt Attorneys
What is a tax debt attorney?
A tax debt attorney is a licensed legal professional who specializes in resolving IRS and state tax debt issues. They negotiate settlements, defend against audits, stop wage garnishments, and represent clients in tax court.
How much does a tax debt attorney cost?
Costs vary based on case complexity. Some attorneys charge flat fees for specific services, while others bill hourly. However, resolving a major tax issue can often save you far more than the cost of hiring legal help.
Can a tax attorney negotiate directly with the IRS?
Yes. A tax attorney is authorized to negotiate with the IRS on your behalf, file appeals, and request relief under various tax programs.
Is an Offer in Compromise a good option for me?
It could be, if you can’t afford to pay your full debt. A tax attorney can evaluate your finances and determine whether you qualify — and help prepare the strongest offer possible.
Can I stop an IRS wage garnishment with legal help?
Yes. A tax debt attorney can often stop or reduce garnishments by negotiating with the IRS or requesting a collection hold or status change.
Is it possible to discharge IRS debt in bankruptcy?
Yes, under strict conditions. Your tax debt may be dischargeable if it’s older than 3 years, you filed returns on time, and the IRS didn’t assess the debt recently. A tax attorney can guide you through this process.
How do I know if my tax problem qualifies for relief?
A free consultation with a tax debt attorney can help you determine whether you qualify for relief programs like an Offer in Compromise, penalty abatement, or other resolution options.
Ready to Solve Your Tax Problems?
Dealing with the IRS is intimidating, but you don’t have to do it alone. A skilled tax debt attorney can analyze your case, protect your rights, and develop a custom plan to eliminate or reduce your debt.
Don’t wait for the IRS to empty your bank account or take your paycheck. Contact our office today to speak with a qualified tax debt attorney and get the help you need to move forward.
