Last week, we discussed three relief or deferment options that may be available if you owe taxes to the Internal Revenue Service and cannot afford to pay. These include installment agreements, offers in compromise and hardship suspensions.
Contrary to what you may have heard, you will not go to jail if you owe the IRS money and can’t afford to pay. That being said, it is important to note the difference between “can’t” pay and “won’t” pay. If the IRS believes that you have committed a crime such as tax fraud, the threat of incarceration is very real.
The IRS is a large organization and has been known to make plenty of mistakes. Therefore, it is in your best interest to challenge allegations that you have committed one or more tax crimes. If your failure to pay what you owe is due to financial hardship and an inability to make payments, this needs to be communicated as soon and as clearly as possible.
This is one of the many reasons why it is crucial to have an experienced tax law attorney representing you during interactions with the IRS, including collection interviews. An attorney can take a close look at your case, inform you of your options, advocate on your behalf and ensure that your due process rights are not violated.
IRS representatives must respect your due process rights, including the right to challenge a claim and to take the IRS to court (when warranted). Representatives must also inform you that you have the right to professional and courteous treatment. Finally, you must be informed that you have the right to be represented by a professional. Hopefully, however, you will already have an experienced tax law attorney by your side when you first meet with a representative.