By Frances A. Tomes, Esq. New Jersey Tax Resolution Attorney

It is 2:00 in the morning. You cannot sleep.You are staring at the ceiling thinking about the IRS. Maybe there is an unopened notice sitting on your kitchen counter. Maybe you know exactly how much you owe and every time you think about it, your stomach drops. Maybe you are worried that the IRS will take money from your paycheck, freeze your bank account, or make an already difficult financial situation even worse.

You may feel embarrassed. You may feel ashamed. You may be asking yourself questions that keep repeating in your head:

“How did this happen?”

Why didn’t I deal with this sooner?”

“What if my spouse finds out?”

“What if they take everything?”

“What if there is no way out?”

If you are feeling this way, I want you to know something important: You are not alone. Every week, I speak with people who are carrying this exact burden. They are business owners. They are nurses. They are contractors. They are teachers. They are parents trying to keep food on the table and keep up with life’s responsibilities. Most of them never imagined they would find themselves owing the IRS.

The truth is that tax problems rarely begin because someone is irresponsible. More often, they begin during one of life’s hardest chapters .A business loses a major client. A marriage ends .A serious illness creates medical bills. A job disappears .A family member needs care. A year becomes overwhelming .A tax return gets postponed. Then another .And before long, what started as a temporary problem becomes a source of constant stress

.I have seen people avoid opening their mail for months because they are afraid of what they will find. I have spoken with taxpayers who have not had a full night’s sleep in years. I have met business owners who were so overwhelmed by their tax debt that they convinced themselves there was no solution But in many cases, there is a solution. Not a magic solution. Not a television-commercial solution .But a real solution. One based on your finances, your circumstances, and the options available under the law.

The IRS has significant collection powers. That is true. But what many people do not realize is that the IRS also has programs designed specifically for taxpayers who cannot afford to pay their tax debt in full. The most important thing to understand is this: Owing the IRS does not mean you are out of options. It does not mean you are a bad person .It does not mean your financial future is ruined. And it does not mean there is no path forward. The purpose of this guide is to help you understand what happens when you owe the IRS, what options may be available, and what steps you can take to regain control of your situation. Because the fear of not knowing is often worse than the reality of dealing with the problem. And once you understand your options, you can begin replacing uncertainty with a plan.

WHAT HAPPENS IF YOU OWE THE IRS AND CANNOT PAY?

When taxes remain unpaid, the IRS will generally continue collection efforts. The amount owed may increase due to penalties and interest, and collection notices may become more serious over time.

Depending on the circumstances, the IRS may eventually:

• File a federal tax lien
• Garnish wages
• Levy bank accounts
• Offset future refunds
• Pursue collection actions against certain assets

However, many taxpayers are surprised to learn that the IRS also has programs specifically designed for people who cannot pay in full.

The key is taking action before the situation becomes more difficult.

IRS PAYMENT PLANS

One of the most common tax relief solutions is an IRS installment agreement.

An installment agreement allows taxpayers to make monthly payments instead of paying their entire balance immediately. Sometimes based upon their income and allowable expenses the payment plan may be low enough that the entire back tax debt is not paid off. For many families, this can provide substantial relief. Rather than feeling trapped by a large tax bill, they can begin moving forward with a structured plan.

Depending on your circumstances, different types of payment plans may be available. Every case is different, and the right strategy depends on factors such as income, expenses, assets, and the total amount owed. The right strategy also requires knowing what expenses will be allowed by the IRS and how to calculate your income.

CAN YOU SETTLE IRS DEBT FOR LESS THAN YOU OWE?

This is one of the most common questions I get asked by taxpayers. The answer is: sometimes.

The IRS offers a program known as an Offer in Compromise. This program allows certain taxpayers to settle their debt for less than the full amount owed when paying the entire balance would be unrealistic.

Qualification depends on several factors, including:

• Income
• Assets
• Living expenses
• Future earning potential

While advertisements often promise settlements for “pennies on the dollar,” the reality is that the IRS carefully evaluates each application. For taxpayers who genuinely qualify, however, an Offer in Compromise can provide meaningful relief and a fresh start

CURRENTLY NOT COLLECTIBLE STATUS

Sometimes taxpayers simply do not have enough money to make payments.

If paying the IRS would prevent you from covering basic living expenses, you may qualify for Currently Not Collectible status.

When approved, the IRS may temporarily suspend collection activity. For someone struggling to keep a roof over their head, pay medical bills, or support their family, this can provide much-needed breathing room.

PENALTY RELIEF OPTIONS

Many taxpayers discover that a significant portion of their balance consists of penalties. Depending on the circumstances, it may be possible to request relief through:

• First-Time Penalty Abatement
• Reasonable Cause Penalty Relief

If approved, these programs can reduce the overall amount owed.

WHAT QUESTIONS KEEP TAXPAYERS UP AT NIGHT?

CAN THE IRS GARNISH MY WAGES?

Yes. And unlike other creditors, they do not need to take you to court to get a judgment to garnish your wages. Also unlike other creditors they are not limited to 10% of your gross wages but can garnish up to 75% of your wages. It is quite stressful for a taxpayer to suddenly see the wage levy notice and their paycheck only showing a few hundred dollars.

However, receiving a wage garnishment notice does not necessarily mean there is nothing that can be done. Many taxpayers seek help after collection activity has already begun. Depending on the facts of the case, it may be possible to negotiate a resolution, establish a payment arrangement, or pursue other strategies that may stop or prevent further collection action.

CAN THE IRS FREEZE MY BANK ACCOUNT?

A bank levy is one of the most frightening experiences a taxpayer can face. People often discover the problem when a debit card is declined or when they attempt to access funds needed for rent, mortgage payments, groceries, or payroll.

The IRS must generally follow specific procedures before levying an account. However the time frame is short -only 21 days. Once the IRS gets the money in the bank it is very difficult to get it back If you have received notices warning of collection activity, taking action quickly may preserve additional options.

THE EMOTIONAL IMPACT OF TAX DEBT

One aspect of tax problems that is rarely discussed is the emotional burden.

People often feel:

• Ashamed
• Overwhelmed
• Anxious
• Embarrassed
• Isolated

Many delay seeking help because they fear being judged. In reality I see these situations every day. Don’t focus on how the problem started. Focus on finding the right solution

IRS TAX DEBT HELP FOR NEW JERSEY RESIDENTS

At Tomes Law Firm, we help individuals and business owners throughout New Jersey address IRS tax debt and collection problems.

We assist clients in Monmouth County, Ocean County, Middlesex County, Mercer County, and throughout the New Jersey, New York and Pennsylvania.

Whether you are dealing with:

• IRS tax debt
• Unfiled tax returns
• Wage garnishments
• Bank levies
• Payroll tax issues
• Offers in Compromise
• Installment agreements

our goal is to help you understand your options and develop a realistic path forward.

THERE IS A PATH FORWARD – JUST TAKE THE FIRST STEP

If you owe the IRS and cannot pay, the situation may feel overwhelming today. But many taxpayers discover that once they speak with us and understand their options, the problem becomes far more manageable.

The worst thing you can do is assume there is no solution. There usually is. The first step is understanding what options are available and developing a strategy based on your unique circumstances. Doing nothing changes nothing.

If you are struggling with IRS tax debt, the New Jersey Tax lawyers at Tomes Law Firm can help you evaluate your options and determine the most effective path forward. Contact us today for a confidential consultation and experience the relief our other clients have had. Call today at 732-333-0681 or 833-4IRS-TAX