Crazy Accomplishments: Eliminating Debt
We take all of our clients’ tax issues very seriously, and from time to time we are floored at the unfair circumstances they find themselves. Frankly, the IRS is a very large organization and do not have great systems in place to check and double check their work. With approximately 236 million returns filed each year, it is, unfortunately, on the taxpayer to hire an accountant to help help them find an IRS solution.
This is what happened to our client, we’ll call him Bill. Bill is a functionally illiterate gentleman and an employee of our local WalMart. Bill came to use with a letter from the IRS stating that he owed about $51,000. This was virtually impossible because he only earned about $15,000 per year. We knew for certain that this didn’t make sense, so we started digging into his history to uncover the root of this problem.
Over the previous few years, the IRS had taken Bill’s entire tax refund every year to pay of his debt. So, Bill stopped filing returns and lowered the amount of withholding his employer was taking out of each check. As you can imagine, this only added to Bill’s tax problems. He was frustrated and it was at this point that he came to us for help.
Our extensive investigation revealed that his identity had been stolen. Over many years, someone had filed 1099s under Bill’s name and social security number for funds he never received. In fact, several were filed every year under different business names at the same address. It was clear that someone was taking advantage of him.
Once we figured out what we were dealing with we were able to file the appropriate paperwork on the stolen identity, prepare his unfiled returns, and fix the mess he had found himself in. But, even after taking all the proper steps, Bill still had a balance due as a result of the low withholding.
However, because of Bill’s modest income, he qualified for an “Offer in Compromise.” Offer in compromise is an agreement made between the IRS and a taxpayer to settle the taxpayer’s debt for less than the amount that is owed. We placed an offer of $10 to resolve the issue and now Bill’s $55,000 balance due has been wiped out! How’s that for an IRS solution?
There’s a moral to this story. Dealing with tax problems is scary and sometimes it feels like you just can’t find an IRS solution. But, it’s important that you employ an expert who can help manage your issues before they grow and become overwhelming. If you’ve found yourself in a situation like Bill’s, contact us today. There is no need to be ashamed, and no need to put it off. We, the tax experts at Fix It Accounting, are on your side and ready to find a solution for you.