The stress that comes from trying to meet tax-filing deadlines is only the beginning for some taxpayers. And if you find yourself owing taxes that you can’t afford to pay at the filing deadline, you are already aware of the additional stress that can come from owing delinquent taxes. Fortunately an experienced Kansas City tax attorney can help you find solutions that can ease the stress that comes from owing back taxes.

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The law has given taxing agencies unique authority to pursue and collect from individuals and businesses that owe tax debt.  And if delinquent taxes get out of control, your state’s Department of Revenue and the IRS can garnish wages, levy bank accounts, assert liens, and even seize your property – all without your permission.  So what are some of the options you have if you find yourself or your business owing taxes you can’t pay?  The Kansas City tax attorneys at Reneau & Shernaman can help. Before you give into the threatening letters, and surrender to the demands of the taxing authorities at face value, consider that you may have legal options available to you.  Consider these 7 options for dealing with delinquent tax debt:

1. Do Nothing.  While in some civil matters doing nothing can be a viable option to let cooler heads prevail, this is rarely the case when you are facing a balance owed to the IRS or your state’s Department of Revenue.  Not only will the taxing authorities employ all sorts of uncomfortable measures to collect back taxes, the longer an individual or business waits to deal with delinquent taxes, the higher the balance owed becomes due to compounding penalties and interest that would make a credit card company blush.  Unless you are certain a taxing authority has stopped trying to collect on your tax debt, doing nothing is not a good option.

2. Reduce or Eliminate the Tax Debt. In some circumstances, the law allows for aggressive means to reduce or even eliminate tax debt.  With the help of an experienced Kansas City tax attorney, individuals and businesses are often able to facilitate a successful reduction with the IRS or state Department of Revenue.

3. Postpone the Tax Debt. In many cases, the Kansas City tax attorneys at Reneau & Shernaman can help you or your business legally postpone the collection and enforcement activity of the IRS or state Department of Revenue.  This option can be a lifesaver for the individual or business that just needs time to get their cash flow back up enough to pay the tax debt off at a later time when they can afford to do so.

4. Bankruptcy. A common misconception with back taxes is that tax debt cannot be included in a bankruptcy, or that the tax cannot be fully discharged in a bankruptcy.  While some circumstances dictate that tax debt may not be fully dischargeable, in many cases, tax debt can be eliminated completely, or restructured into more manageable terms for the taxpayer.  Because the bankruptcy code is fairly complicated, be sure and consult with one of the Kansas City bankruptcy attorneys at Reneau & Shernaman before proceeding with this option.

5. Challenge the Assessed Amount. Taxing authorities can make mistakes too.  But challenging an assessed amount of tax debt after an IRS audit, or substitution assessment can be extremely complicated and risky if you don’t know what you are doing.  Done without the protection of a Kansas City tax attorney, a misplaced challenge to an assessed tax debt can be used against you and even have the effect of becoming an unintended audit.  Bottom line — a challenge to an assessed tax debt can be a very effective tool to reduce your tax liability, but be sure you consult with a Kansas City tax attorney before you attempt this option.

6. Negotiate an Installment Agreement. For many taxpayers, the Kansas City tax attorneys at Reneau & Shernaman can work out an agreement with the IRS or your state’s Department of Revenue to pay off the delinquent taxes over a period of time.  The IRS permits pre-determined budget limits for various routine expenditures when calculating whether or not a taxpayer can qualify for an agreement.  With help from an experienced tax attorney, these standard monthly expense amounts can be maximized to work out the best possible outcome in negotiating an installment agreement and even postpone collection indefinitely.

7. Settlement. Occasionally it is in the best interests of both the taxing authority and the taxpayer to settle the tax debt all at once with a lump sum payment.  This option can work wonders for the individual or business whose circumstances qualify them for this option.

Ultimately, delinquent tax debt can be stressful and even lead to financial ruin if left unchecked.  If you or someone you know owes taxes you can’t afford, consider that you may have legal options available to you to help reduce, postpone, or even eliminate your delinquent tax debt.  For a free consultation with a Kansas City tax attorney, or call Reneau & Shernaman at 816-287-8080, today.