Tax Resolution and IRS Problem Help in Easton, MA
IRS letters, back taxes and unfiled returns. Start by working out what is actually owed and what clock is running.
Start with the letter you have, not the outcome you want.
Twenty-six pages, grouped by the stage you are at. If you have no letter and simply know you are behind, start with unfiled returns — that is where most of these cases actually begin, and no resolution is approved until it is dealt with.
Start with the notice you received
Every IRS letter carries a number in the top right corner, and that number tells you what stage you are at and what clock is running. Find yours here before doing anything else.
- Notice CP14The first balance-due notice the IRS sends. It is a bill, not an enforcement action — and it is the point at which the widest set of options is still open.The date printed on the notice
- Notice CP504Headed as a notice of intent to levy, and read by most recipients as the last warning. It is not. It permits a levy on your state tax refund and nothing else — but the notice that does authorize more is the next one.30 days, but not the important 30 days
- Final Notice of Intent to LevyThe notice that authorizes levies on wages and bank accounts, and the one that carries a 30-day appeal right worth more than almost anything else in the collection process.30 days from the date on the letter
- Notice CP2000An automated comparison found income reported to the IRS that does not appear on your return. The proposed tax is frequently much larger than the correct answer, because the computer does not know what anything cost you.30 days from the notice date
- Notice of DeficiencyThe letter that ends the administrative stage. It carries the only window in which you can have a court decide the amount before paying it, and that window is statutory.90 days — 150 if the notice is addressed outside the United States
- Audit and examination lettersMost examinations are conducted entirely by mail about a single line on a return. The letter number tells you which kind you have, and that determines almost everything about how it should be handled.Usually 30 days to respond, and a separate three-year assessment window
When the IRS has started collecting
A lien, a levy and a garnishment are three different things with three different remedies. These pages explain what has actually happened to your property and what reverses it.
- Federal tax lienTwo different things share the name. One attaches to everything you own the moment a balance goes unpaid. The other is a public document filed later, and it is the one that shows up on a title search.30 days after the lien filing notice
- Wage garnishmentUnlike a bank levy, a wage levy does not happen once. It attaches to your employer and stays attached, taking everything above a statutory exempt amount from every payment, until it is released.The employer has your statement, and a short window to return it
- Bank levyThe bank freezes the balance and holds it for 21 days before sending it to the IRS. That holding period exists so mistakes can be corrected, and it is the whole of the opportunity.21 calendar days from the day the bank receives the levy
- Getting a levy releasedRelease is not discretion exercised on request. The statute lists the circumstances in which the IRS must release a levy, and the work is establishing that one of them applies.Governed by the levy you have
- Passport certificationAbove an inflation-adjusted threshold, an unresolved balance is certified to the State Department, which may then refuse to issue or renew a passport. Several common situations are excluded, and certification is reversible.Notice CP508C arrives at the same time as the certification, not before
How a balance actually gets resolved
There are a limited number of ways a tax debt ends: paid, arranged, compromised, shelved, or expired. Each has its own eligibility test, and the honest answer for most people is one of the plainer ones.
- Installment agreementA monthly payment plan under section 6159. Below certain balances it is close to automatic and requires no financial disclosure at all; above them it becomes a negotiation about what you can afford.A pending request suspends levy action
- Partial pay agreementA monthly agreement deliberately set below what would pay the balance. It runs until the collection period expires, and whatever remains at that point is written off. For many people it achieves more than an offer in compromise and is far easier to obtain.The collection statute is the whole point
- Offer in compromiseThe IRS may settle a liability for less than the full amount. The figure is not negotiated — it is calculated from your assets and your future income, and the calculation is what decides whether an offer is worth making.24 months, or it is deemed accepted
- Currently not collectibleWhere paying anything would leave you unable to meet basic living expenses, the IRS suspends active collection. Nothing is forgiven and the balance keeps accruing — but the collection period keeps running too, and for some accounts that is the entire strategy.No deadline, and no fixed duration
- Penalty abatementTwo separate routes with different tests. One depends only on a clean compliance history and is granted administratively. The other depends on what happened and why, and is argued.Tied to the refund statute where a penalty has been paid
- Innocent spouse reliefA joint return makes both signatories liable for the whole amount, regardless of who earned the income or who prepared it. Section 6015 provides three routes out, and they are not interchangeable.Two years for two of the three routes
- Collection statute (CSED)The IRS has ten years from assessment to collect, after which the balance becomes unenforceable. The period is regularly suspended, and almost every real account has a date later than ten years from the return.Ten years from assessment — not from the return, and not from the tax year
Returns, audits and appeals
Most collection problems start as a filing problem or an examination that was never answered. Fixing the underlying return is often worth more than negotiating the balance it produced.
- Unfiled tax returnsAlmost every serious collection case has unfiled periods behind it. Nothing else can be resolved until they are in — and the returns the IRS prepares in your place are, by design, the worst possible version of your tax position.Three years to claim a refund
- Audit reconsiderationA discretionary process for reopening an assessment where the IRS has information it has not previously considered. It is the main remaining route once the 90-day Tax Court window has passed.No deadline, but the collection period is not suspended
- Collection due processAn independent review of a proposed levy or a filed lien, with judicial review behind it. It is the strongest procedural right in collection, and it is available in a 30-day window that most people miss.30 days, then one year for a weaker version
Payroll and business tax debt
Unpaid employment taxes are treated differently from every other kind of tax debt, because part of the money was never the employer's. This is the most urgent category the IRS collects.
- Payroll tax debtPart of every payroll deposit is money withheld from employees and held in trust. That is why the IRS pursues these balances harder and faster than any other, and why they can become personal.Deposit deadlines, and a penalty that escalates with delay
- Trust fund recovery penaltyThe IRS may assess the withheld portion of unpaid employment taxes personally against anyone who was responsible for paying it over and willfully did not. It survives the business, and more than one person can be assessed for the same money.60 days from Letter 1153
Paperwork, authority and Massachusetts
The forms that decide who may speak to the IRS about you, the financial statement that drives almost every outcome, and the separate matter of a state balance.
- Form 433 financial statementNearly every resolution above the streamlined thresholds is decided on this form. It is not a budget you submit — it is an input to a calculation that uses national and local standards instead of what you actually spend.Documents are usually expected within 30 days of the request
- Authorizing someone to actTwo different authorizations that are constantly confused. One lets someone act on your behalf; the other only lets them see your file. Not everyone who can prepare your return can hold the first one.No deadline, but nothing happens without one on file
- Massachusetts DOR debtResolving a federal balance does nothing for a state one. Massachusetts has its own assessment periods, its own collection powers, its own appeal route and its own personal liability rule for trustee taxes.Abatement and appeal deadlines are set by state law
Anyone holding a letter from the IRS or the Massachusetts Department of Revenue who does not know what it means, what it can do, or how long they have to answer it.
Almost every one of these letters carries a deadline, and most of them are lost by not being opened. The other half of the problem is that the amount being demanded is frequently wrong — usually because returns are missing and the IRS filed its own version, which allows no expenses and no cost basis.
Two questions, in this order
What clock is running, and is the number right. Almost everything else follows from those two answers, and they are answered in that order because one of them is time-limited and the other is not.
Some of these deadlines are administrative and can be extended by asking. Others are statutory, cannot be extended by anyone at any level of the IRS, and disappear on a fixed date whether or not the envelope was opened. The 30 days on a final notice of intent to levy and the 90 days on a notice of deficiency are the two that cost the most, and they are the two most often lost.
The second question matters just as much and gets far less attention. A large share of demanded balances are wrong — a payment credited to the wrong period, a securities sale reported without its cost, an examination decided on records nobody ever supplied, or a return the IRS prepared in your place allowing no expenses at all. Negotiating a payment plan for a number that is about to fall is wasted work.
What actually resolves a balance
There are a limited number of endings and it is worth knowing the whole list, because the marketing in this industry is concentrated almost entirely on one of them.
It is paid. It is arranged, under an installment agreement. It is partly paid, under an agreement deliberately set below the balance that runs until the collection period expires. It is compromised, where a calculation of your assets and future income comes out below what is owed. It is shelved, where paying anything would leave you unable to meet basic living expenses. Or it expires, because the ten-year collection period ran out.
Which of those applies is arithmetic. The IRS decides almost all of it from a financial statement, using published expense standards rather than your actual budget, and the answer is largely determined before any conversation happens. That is not a reason to be passive about it — it is a reason to get the inputs right, because the inputs are the part that can be changed.
Why the offer in compromise is not the answer as often as advertised
It is the most heavily marketed tax product in the country and it is the wrong instrument for most of the people it is sold to.
An offer is accepted where the amount you propose equals or exceeds what the IRS calculates it could collect from your assets and your future income. Equity in a home counts. Retirement savings count. Expenses above the published standards are usually disallowed. Applying costs a fee and an initial payment that are not refunded if it fails, and a pending offer suspends the collection period — so an unsuccessful application adds time to the window during which the debt can be collected.
Meanwhile a partial pay installment agreement reaches a similar destination without any lump sum, on a much lower evidentiary bar. Currently not collectible status stops collection immediately and costs nothing, and because it does not pause the collection period, an account can sit in it until the balance expires. And where the assessment itself is wrong, correcting it reduces the debt more than any settlement would.
Where the numbers genuinely support an offer it is an excellent outcome and worth pursuing properly. The work is finding out which case you are in before spending anything.
Massachusetts is a separate problem
The Department of Revenue assesses on its own authority, collects with its own powers, appeals through the Appellate Tax Board rather than the Tax Court, and does not accept the federal power of attorney form. Resolving an IRS balance has no effect on a state one.
It also has a rule the IRS's version of which catches people out just as often: withheld income tax, sales tax and meals tax are trustee taxes, and an individual responsible for paying them over can be assessed personally when they are not.
The two problems are built from one set of records, which is the practical argument for handling them together rather than sequentially.
What this covers.
Most of what decides these outcomes is record work, and it happens before anyone negotiates anything.
- Account and wage transcript review for every open period, so the figure being resolved is the real one rather than the one on the notice
- Preparation of unfiled returns, including where the IRS has already filed a substitute return in your place
- Reconstruction of records where the originals are gone, from bank, card and third-party data
- Working out the collection statute expiration date for each assessment, which decides which resolutions are even worth considering
- Separating the trust fund portion of an employment tax balance from the rest, because that is the part that follows individuals
- Preparing the Collection Information Statement with its supporting documents assembled rather than promised
- A written explanation of which resolutions your numbers actually support, and which they do not
The order the work goes in.
- Find the clockWhich letter you have, what it authorizes, and what date is running. Some of these windows are statutory and cannot be extended by anyone, so this comes before everything else.
- Pull the transcriptsAccount and wage transcripts for every period. This is the record the IRS will act from, so it is the record worth arguing from — and it is where misapplied payments, duplicate assessments and substitute returns become visible.
- Fix the filingsNo resolution is approved while a required return is outstanding, and the returns often reduce the balance substantially. Filing comes before negotiating, not alongside it.
- Run the numbersThe financial statement, the allowable expense standards, the remaining collection period. Between them these decide the outcome before any conversation happens.
- Propose the one that fitsAn agreement, a partial pay agreement, not-collectible status, an offer, or simply waiting out a period that is nearly gone. Which one is arithmetic rather than persuasion.
What we need from you.
- Every letter you have received, including the envelopes with dates on them
- Prior returns, and an honest account of which periods were never filed
- Bank and card statements for the periods with missing records
- Prompt answers when a statutory deadline is running, because those cannot be extended afterward
- A realistic view of what you can pay each month, tested against a real month rather than a good one
Is this a fit?
USUALLY YES
- Someone holding an IRS or Massachusetts letter who does not know what it means
- Several periods unfiled, with or without a balance yet
- A business behind on employment tax deposits, where the exposure is becoming personal
- A balance where the amount itself looks wrong, particularly after the IRS filed a return in your place
USUALLY NOT
- Anyone wanting a settlement figure promised before their numbers have been run
- A criminal tax matter, which needs a lawyer from the first conversation rather than the third
- Someone who wants the letters handled without the returns being brought up to date, which is not a thing that can be done
What decides the fee.
You get a specific number in writing before work starts. These are what it depends on.
- How many periods are unfiled, and how much of the record survives
- Whether the IRS has already assessed substitute returns that need correcting
- Whether employment tax and a personal trust fund exposure are involved
- Whether a Massachusetts balance runs alongside the federal one
- How close the nearest statutory deadline is, since that determines the order everything happens in
What this doesn’t cover.
Saying so up front saves everyone a meeting.
- Legal advice, and anything in a criminal tax matter — that is a lawyer's work and the referral should happen early rather than late
- Bankruptcy advice, which is a separate profession and is genuinely part of the answer more often than people expect
- Guaranteed settlement figures. The offer in compromise calculation is arithmetic, it is run before anything is said about the outcome, and for most people it does not produce the answer the advertising implies
- Any work that requires an authority we have not confirmed we hold. Where that is what a matter needs, you will be told so plainly rather than discover it later
Federal and state, from one set of records
Murphy works from an office at 187 Washington Street in North Easton, in the town of Easton, Bristol County, Massachusetts.
A Massachusetts taxpayer with a federal problem very often has a state one too, and the Department of Revenue collects on its own authority, on its own schedule, with powers the IRS does not have. Resolving the federal side does nothing for the state side.
The two problems are built from one set of records, which is the practical argument for not splitting them across providers who never speak to each other. Whether we are the right fit depends on your situation rather than your address. If you are elsewhere in Massachusetts, ask.
Nothing on these pages is advice about your situation. They explain what the IRS and the Massachusetts Department of Revenue do and cite the statute so you can check it. What applies to you depends on facts none of this knows. Tell us what your letter says and what date is on it. Please do not send Social Security numbers or tax documents through the form.
Questions about Tax Resolution.
- Where do I start?
- With the letter number in the top right corner. It tells you what stage the account is at and what clock is running, and the hub above is organized around exactly that. If the letter mentions a right to a hearing, that is the urgent one.
- Can you make the IRS settle for less than I owe?
- Nobody can promise that. An offer in compromise is accepted where a calculation of your assets and future income comes out below the balance, and the calculation is run first. For a great many people the honest answer is a payment plan, a partial pay agreement, or a hardship status — and one of those is often a better outcome than an offer would have been.
- The amount they are demanding is not right.
- That is common enough to be the first thing checked. The usual causes are a payment applied to the wrong period, a return the IRS prepared in your place with no expenses and no cost basis allowed, or an examination adjustment made without your records. Each has a route, and the routes are different.
- I have not filed for several periods. Is that a problem?
- It is the problem, usually. No resolution the IRS offers is approved while a required return is outstanding, and returns filed over the IRS's own versions frequently cut the balance substantially. Filing comes first, and it is often the largest single reduction available.
- Do you handle Massachusetts as well as federal?
- The two are separate agencies with separate procedures, and resolving one does nothing for the other. Tell us what you have from each and you will get a straight answer about what we would do and what, if anything, sits outside what we handle.
- Can you speak to the IRS for me?
- There are two different authorizations here and they are worth understanding. One lets someone see your file, which covers most of the work that decides outcomes. The other lets someone act for you, and only certain categories of professional may hold it. Tell us what your letter says and you will get a direct answer about what the work involves and who should be doing which part of it.
- How quickly do I need to move?
- It depends entirely on the letter. A first balance notice is not urgent in days. A final notice of intent to levy gives 30 days and losing it costs a right you cannot get back. A bank levy gives 21 days before the money moves. Those three are not the same situation.
- Will this cost more than the tax?
- It should not, and if the work would not pay for itself we would rather say so. Some of these are a transcript review and a conversation. Others are several periods of unfiled returns, a reconstruction and a financial statement. You get a scope and a price in writing before anything starts.
- Is it too late if I already ignored several letters?
- Rarely too late for everything, though specific rights may be gone. What is left depends on which notices were issued and when, and that is answerable from transcripts in a fairly short space of time. It is worth finding out rather than assuming.
Start with what the letter says and what date is on it.
Some of these windows are statutory and cannot be extended by anyone. Working out which one you are in takes a short conversation, and it is worth having before the date rather than after.
Please don't send Social Security numbers or tax documents through this form.