Can You Negotiate with the IRS? 3 Ways to Resolve Tax Debt

Facing a mountain of tax debt and wondering if the IRS will work with you? The short answer is yes, you absolutely can negotiate with the IRS. The IRS actually prefers collecting something rather than nothing, and they'd rather have you on a payment plan than spend resources on costly enforcement actions.

Jay Patrick, Director of Client Solutions at Tax Relief Helpers, joined Solo's Debt Hotline podcast to break down exactly how IRS negotiations work. With 15 years of experience in tax resolution, Jay revealed that most people have more options than they realize, but timing matters and ignoring IRS notices will only make your situation worse.

Ignoring IRS tax debt leads to wage garnishments and bank levies

Unlike credit card companies that might take months to sue you, the IRS moves much faster and has powers that regular creditors don't. From the first notice to actual wage garnishment typically takes six months to a year, sometimes as quickly as one month.

"Ignoring the IRS tax debt doesn't make it disappear, and it often makes things worse," Jay explained. "If you don't respond, they can move forward with enforced collections, wage garnishments, bank levies, or even filing federal tax liens."

Here's where IRS collections get really aggressive: while credit card companies can typically garnish up to 25% of your wages, the IRS can take much more. Jay has seen cases where the IRS garnished 50%, 75%, even 100% of someone's paycheck.

The IRS can also freeze your bank accounts with little warning. But perhaps the most damaging long-term consequence is a federal tax lien. Unlike other types of debt, tax liens are public records that appear on your credit report and can devastate your credit score. They make it nearly impossible to refinance your home, get approved for new credit, or even sell property since the IRS has a legal claim on your assets.

Once wage garnishments and levies start, reversing them requires you to be current on all tax filings and becomes much more complicated.

Tax debt becomes exponentially more expensive the longer you wait

One of the biggest reasons to act quickly on tax debt is the cost of delay. The IRS charges both interest and penalties that compound over time, turning manageable debt into overwhelming financial burdens.

Interest rates on tax debt typically range from 2% to 10% annually, but penalties can be even more devastating. The failure-to-pay penalty alone is 0.5% of your unpaid tax debt per month, equaling 6% per year. Combined with interest, your debt grows by 8-16% annually just by sitting there.

Here's a real-world example: if you owe $20,000 in tax debt and ignore it for three years, penalties and interest could add another $8,000-$12,000 to your balance. That means you'd owe $28,000-$32,000 instead of the original $20,000.

Even worse, if the IRS files a tax lien, you'll face additional costs for lien filing fees, potential attorney fees, and the credit damage that could cost you thousands more in higher interest rates on future loans. Acting within the first few months of receiving notices can save you thousands in penalties alone.

Option 1: Offer in compromise lets you settle tax debt for less

An offer in compromise lets you settle your tax debt for less than the full amount owed. This is the option most people want, but it's also the hardest to qualify for.

"These are very few and far in between," Jay warned, "because you would have to be destitute or insolvent to prove you don't have the ability to pay that debt in full."

The IRS evaluates three factors: your assets, income, and allowable expenses. You complete Form 656 with detailed financial documentation proving you can't pay the full amount. You might offer 20-40% of what you owe as a lump sum, and the IRS forgives the rest.

The key is demonstrating that collecting the full amount would create genuine financial hardship. If you have significant assets or steady income, the IRS will likely reject your offer. But for people facing job loss, medical expenses, or other financial catastrophes, an offer in compromise can provide a fresh start.

Option 2: Installment agreements spread payments over time

Installment agreements spread your tax debt over several months or years with manageable monthly payments. This is often the most realistic option for people who can afford to pay but need more time.

The IRS looks at your assets, income, and allowable expenses using Form 433. Here's the catch: the IRS uses their own standards for "allowable expenses." Just because you have two car payments doesn't mean they'll allow both in their calculations.

Based on your disposable income after allowable expenses, the IRS typically expects about 33% to go toward your tax debt payment plan. You'll pay more in the long run because interest and penalties continue to accrue, but a predictable monthly payment is better than collection notices and wage garnishment risks.

Option 3: Currently non-collectible status provides temporary relief

Currently non-collectible status suspends IRS collection efforts when you're in severe financial distress. This works best for temporary hardships like business downturns, job loss, or major medical expenses.

You submit Form 433 documents proving you can't currently pay. The IRS stops active collection efforts: no wage garnishments, bank levies, or collection calls. But interest and penalties continue to accrue.

This status typically lasts one year, after which you must resubmit financial documentation. If your situation improves, the IRS expects you to start payments or switch to an installment agreement. It's temporary breathing room, not a permanent solution.

Gather these documents before contacting the IRS

Successfully negotiating with the IRS requires thorough preparation and documentation. Before making any contact, gather these essential documents:

Financial documentation for Form 433:

• Bank statements for the last three to six months
• Pay stubs or proof of income for all household members
• Monthly expense receipts (rent, utilities, groceries, medical bills)
• Asset valuations (home appraisals, car values, retirement account statements)
• Debt statements for other obligations (credit cards, loans, mortgages)

Tax-related documents:

• Copies of all unfiled tax returns
• Documentation supporting any disputed amounts
• Previous correspondence from the IRS
• Records of any payments already made

When you contact the IRS, be prepared to discuss your financial situation honestly and completely. They will verify the information you provide, so accuracy is crucial. Have a clear understanding of what you can realistically afford to pay, whether as a lump sum or monthly payment.

If you're working with a tax professional, they can handle these communications for you and ensure you don't accidentally say something that hurts your case.

Real people face tough choices between tax debt and other obligations

Jonathan from Iowa called with a common dilemma: $18,000 in IRS debt from self-employment taxes during COVID, plus $9,000 in credit card debt. The IRS had started sending levy notices.

Jay's advice was clear: "Address the IRS first unless the credit card debt has already gone into extreme collections." Why? The IRS has collection powers that credit card companies don't: wage garnishments without court orders, bank account freezes, and property liens.

But communication is key for both types of debt.

"At least if you respond to the IRS about the notices, you can hold off for a timeframe before they actually levy or garnish you," Jay explained.

Use SoloSettle to negotiate with credit card companies while resolving tax issues.

You must be current on all tax filings to negotiate effectively

You must be current on all tax filings before the IRS will negotiate seriously. When Ben asked about reversing wage garnishments within 21 days, Jay highlighted this requirement: "You have to be in compliance, which means you have to file up to current with all of your past taxes."

If you owe for 2021, 2022, and 2023, but haven't filed your 2024 return, complete that filing first. The IRS won't negotiate payment plans for old debt if you're not staying current on new obligations.

Some people have protection from aggressive collection. Gary from Florida, who owed $7,000 from a closed business, worried about his Social Security benefits. "If you're only receiving Social Security, then they're not necessarily going to go after it," Jay explained. Social Security recipients have certain protections, especially if that's their only income source.

Alan from Texas disputed owing $40,000 for allegedly unfiled 2018-2019 returns. Jay advised requesting IRS transcripts to see what they have on file, as the IRS sometimes files "substitute returns" without deductions when they believe you haven't filed. Always send tax documents via certified mail for proof of delivery.

Avoid these common mistakes that make tax problems worse

Based on Jay's 15 years of experience, here are the most damaging mistakes people make when dealing with tax debt:

• Mistake 1: Waiting until the last minute. Many people ignore IRS notices hoping the problem will go away. By the time they seek help, their options are limited and more expensive.
• Mistake 2: Not staying current on new filings. You can't negotiate effectively for old debt while falling behind on current tax obligations. File current returns even if you can't pay the full amount owed.
• Mistake 3: Hiding assets or income. The IRS has extensive tools to verify your financial information. Being dishonest about your situation will destroy your credibility and eliminate negotiation options.
• Mistake 4: Accepting the first payment plan offered. The IRS's initial payment plan proposal is often higher than what you can actually afford. You have the right to negotiate based on your true financial situation.
• Mistake 5: Not getting agreements in writing. Verbal agreements with the IRS are worthless. Always get your payment plan, settlement, or currently non-collectible status in writing before making any payments.
• Mistake 6: Stopping payments without permission. If you can't make your agreed payment, contact the IRS immediately to modify your agreement. Stopping payments without notice can restart collection activities.

Negotiating with the IRS requires quick action and professional help

Whether you choose an offer in compromise, installment agreement, or currently non-collectible status depends on your specific financial situation. All three options require detailed financial documentation and knowledge of IRS procedures.

If you're dealing with other debt issues—credit card debt, medical bills, or debt collection lawsuits—get professional help for both your tax problems and other debts.

Use Solo to respond to debt lawsuits and negotiate settlements while working with tax professionals on IRS issues.

As Jay concluded: "Tax problems are stressful but solvable. The most important thing is to take action and work with someone who understands both your financial situation and the IRS system."

For the complete conversation about IRS negotiations, including more listener questions and detailed explanations of each resolution option, you can listen to the full The Debt Hotline episode on Spotify and Apple Podcasts.

Taking action today could save you thousands in penalties and protect your wages from garnishment.

Transcript

Hannah (00:36):

Hello everybody. Welcome to this week's episode of the Debt Hotline. My name is Hannah with team Solo. We're super excited about today's topic and think that it could be really helpful for a lot of our listeners and viewers. Today's topic is how to negotiate and settle debt with the IRS and we're holding a question and answer session with a tax relief expert named Jay Patrick, who is the director of Client Solutions at Tax Relief Helpers. Tax Relief Helpers is a trusted tax resolution firm that's dedicated to helping individuals and small business owners navigate overwhelming tax debt with confidence, with deep expertise in working with the IRS and state tax authorities. The team at Tax Relief Helpers offers personalized strategies for resolving back taxes, preventing wage garnishments, and liens, and negotiating affordable payment plans known for their integrity, transparency, and results driven approach. Tax Relief helpers empowers clients to reclaim financial peace of mind and move forward with clarity. Whether you owe $10,000 or more than a hundred thousand dollars, their team of tax professionals is here to help you every step of the way. So again, I'm joined tonight by special guest Jay Patrick. Again, he is the Director of Client Solutions at Tax Relief Helpers. Jay, would you take a moment to introduce yourself, tell us how long you've been at Tax Relief Helpers and maybe fill in any gaps that I might've missed in my explanation?

Jay (02:06):

Absolutely. Well, thank you for having me on the podcast. I'm glad to be here. So I've been with Tax Relief Helpers since 2022, since we started. I've been in the industry for about 15 years and I've worked for different tax resolution companies and what makes Tax Relief Helpers stand out from the rest is the fact that we've taken basically the best of the industry as far as our resolution team, and we brought 'em here to create a top tiered tax resolution service company.

Hannah (02:38):

So what do you think makes tax Relief helpers top tier in your opinion?

Jay (02:42):

I would say our tax attorneys, our enrolled agents, and our accountants as well. They have a cumulative experience in the industry for over a hundred years, and they've dealt with every type of tax debt that you could think of.

Hannah (02:56):

So it sounds like it's the attorneys that really are forming that expertise and helping people find resolutions and negotiate, is that right? Absolutely. I love that. And what exactly do you do with your role as Director of Client solutions? What's an everyday kind of workday for you, like Jay?

Jay (03:17):

Well, when I come in, I always just check to make sure that there isn't any cases that need to be addressed as far as whether that be revenue officer notifications, levy notifications. I'm always working with our team on the front end to make sure that we're holding up to the highest standards, especially in our industry, making sure that we go through these consultations with these prospective clients properly. So I basically have my hands full with every part of bringing on a client and going through the resolution aspect of this as well.

Hannah (03:52):

So it sounds like you help clients along the process and you kind of speed the process up for them and help them with the flow. If they get stuck at any point in the process, you're there to support them. Is that right?

Jay (04:02):

A hundred percent.

Hannah (04:03):

Awesome. What brought you to tax relief helpers in the first place?

Jay (04:07):

That's a great question. So what got me into this industry was I was raised by a single mother, right? So when I was a kid, she had to withdraw from her 401k early and then she didn't withhold enough taxes at the end of the year. So then she incurred a balance. So from the youngest age that I can remember having her seeing her deal with that, and I'm the youngest of three boys, that instilled something in me to make sure that one, we could help every single client within reason, but also it gave me that drive to find other ways that people don't really usually know about.

Hannah (04:45):

So it sounds like you maybe came from a household where debt was maybe a common topic or maybe a common problem and you wanted to get out there and help people who are facing similar challenges find resolution.

Jay (04:59):

Absolutely.

Hannah (05:00):

I love that. Well, that's a great story. Well, I guess Jay, with that, I wanted to hop into some questions that we have since you are an expert in the tax relief space. It's totally related to what we do at Solo and it's completely related to topics we typically discuss on the debt hotline. At Solo, we help people who are dealing with debt, especially people who've been sued for debt. We help them respond to the lawsuits and resolve the case, and we also help them negotiate and settle their debt. So we wanted to talk a little bit tonight about how you can negotiate with the IRS to settle tax debt. If you're in that position for anybody watching and listening, the debt hotline is a free way that you can submit questions about debt and get answers from experts. Wanted to give a quick disclaimer that I am not an attorney. Jay, you're also not an attorney, correct?

Jay (05:53):

I'm not, no.

Hannah (05:54):

Okay. So since we are not attorneys, anything that we say or talk about in this episode is not considered legal advice or legal representation. Watching this podcast does not form an attorney-client relationship. Again, we're not attorneys, but we are experts in the debt space, and so we wanted to share a little bit about our knowledge, answer some of your questions, and again, if you're watching the debt hotline or listening and you have your own questions about debt, you can call into six one three eight one eight one and leave your own question as a voicemail. With that being said, Jay wanted to ask you first question, which is, what happens if you ignore IRS tax debt?

Jay (06:38):

Well, ignoring the IRS tax debt doesn't make it disappear, and it often makes things worse. Initially, the IRS will send notices, but if you don't respond, they can move forward with enforced collections, wage garnishments, bank levies, or even filing federal tax liens. It can spiral quickly if left unaddressed.

Hannah (06:58):

Yeah, and I think that that's a very common topic in the debt space in general. If you ignore a debt, it doesn't mean that it's going to go away. In fact, ignoring it could be in some cases, the worst approach to take. And in the case of tax debt, what are some potential consequences that could happen for people who ignore the IRS when they're coming after them for tax debt,

Jay (07:23):

Garnishing wages, freezing bank accounts, and then usually with the tax liens, all of that imposes. In reality, it doesn't allow people to either refinance their house or sell their properties. Typically, they're going to be sending out a bunch of notifications prior to this. So if you're receiving a lot of these final intent of to Levy or CP nineties or LT elevens, then you should start to act on those because when they state it and they send it out, they're going to be coming after any assets that you currently have, bank accounts, wages and assets.

Hannah (08:01):

So you threw out a few technical terms there. Jay wanted to kind of break some of those down. If you don't mind. You mentioned wage garnishment is a potential consequence of ignoring tax debt. You also mentioned levies, and I think there were a couple terms that I'm not familiar with. Something about 11. Can you fill in the gaps for me? Maybe tell us what wage garnishment is and what a levee might look like if the IRS comes after you for those things?

Jay (08:27):

Absolutely. So a wage garnishment notification usually gets sent to your HR department if you're on a W2 for a company, and then as soon as they get that your HR department has to respond. So in essence, as soon as that's sent to them, they can garnish 25%, 50%. I've even seen cases where people are getting garnished a hundred percent of their wages, and that's after multiple notifications about this garnishment order. Or if they do levy, then they're going to submit this levy notification to your bank. The bank will send you a notification and then the IRS will take all the funds out of it.

Hannah (09:03):

So the difference between wage garnishment and levy is just that the levy, they can take a chunk of money all at once, whereas with a wage garnishment, they can take a percentage of your monthly income and put it towards your debt. Is that right?

Jay (09:17):

Absolutely.

Hannah (09:18):

And that's crazy. You mentioned that you've seen cases where the IRS will garnish up to 100% of someone's paycheck?

Jay (09:26):

Yep.

Hannah (09:27):

That's crazy. So with other types of debt like credit card debt, personal debt, consumer debt, I think the limit typically is about 25%. Jay, in your experience, I know you said you saw that rare case with the 100% wage garnishment, but in your experience, what's the typical percentage for wage garnishments for tax debt?

Jay (09:49):

No. Depends on the amount of the sources of income that you currently have. If it's one source of income that it's usually going to be 25%, but if you have more than one source of income, then they can go up to 50, 75, even a hundred percent.

Hannah (10:04):

Okay. So with a particular example, you shared about 100% maybe that person had multiple forms of income, and so garnishing their one paycheck at a hundred percent wasn't meaning that they were losing all their money every month? Right.

Jay (10:19):

Well, in essence for that example, it was a business owner who had put himself on W2. So at that point in time, a revenue officer had come into the picture and started levying the entirety of his paycheck.

Hannah (10:30):

Wow. Well, craziness. Yeah, so I think the big takeaway we've got here is if you owe tax debt to the IRS, it's a good idea to address it. Don't ignore it. The more time that you let go by without addressing the issue, probably the worst the consequence could end up being. And I think that a lot of times we kind of paint the IRS to be this big evil entity or the enemy or whatever you want to call it, but I do think that there are individuals working at the IRS who are willing to work with you, figure out a solution, especially if you are dealing with other types of debts. I wanted to ask you maybe if you could tell us, Jay, a little bit about the timeline though of wage garnishment and levies in relation to tax debt. At what point would the IRS usually enforce or a wage garnishment or levy for nonpayment?

Jay (11:21):

That's usually after several notifications about the intent to levy or garnish your wages or seize your assets. Usually they give you a timeline when they're sending out, like I said, a CP 90 or an LT 11, these are specific letters that they're sending out to the clients who owe or the people who owe IRS debt, and at that point they'll give you a deadline. If you don't respond within that deadline, then they could enforce that levy or the wage garnishment within a week a day, that timeframe. It just all depends on the severity of their debt to the IRS.

Hannah (11:59):

Okay. So would you say, you mentioned the timeline is usually after several notifications and notices that they owe the debt. How long would you say, is it usually like a week or two weeks or maybe a couple months?

Jay (12:16):

Well, are you talking about after the last notification or with the buildup of the notifications?

Hannah (12:22):

Maybe after the IRS sends the first notification, what's the timeline after they get the first notice that they owe this debt until maybe it leads to wage garnishment or a levy?

Jay (12:33):

That could be anywhere from about six months to a year. Sometimes I've seen it as early as a month. I know there's several different scenarios that come into play, like the amount that you owe and the severity, the type of debt that you owe to the IRS as well. So in a broader spectrum, it's more about usually about six months, I would say on average, if they send you that notice about having the balance and you haven't addressed it properly, then they're going to send out another notice as far as their intent to try and collect that those funds from you, and then they'll send out the final notice of intent to levy or garnish or seize your assets.

Hannah (13:13):

Gotcha. And on the topic of the consequences of ignoring tax debt, I'm curious what types of penalties or interest might accumulate over time on tax debt? Can the IRS charge interest on debt that you owe?

Jay (13:28):

The IRS will always charge interest on the debt that you owe.

Hannah (13:34):

What percentage are we talking?

Jay (13:36):

I've seen anything as far as 2% to 10 20%. It all depends on the case. In reality, it all depends on how much you actually owe to the IRS.

Hannah (13:48):

Gotcha. And on that topic, are there ever instances or examples where the IRS might settle for less if the debtor does have other debts or just isn't in a position to pay it off? Will the IRS ever settle for less and kind of maybe take a lump sum payment to forgive the rest?

Jay (14:07):

Yes, there's several different relief programs, but the main three are usually it's an offer on compromise. These are very few and far in between just because at that point in time you would have to be in reality, destitute or insolvent to state that you don't have the ability to pay that debt in full. And then there's also the installment agreement and a currently non collectible. So there's several different ways that you can go about it. Every different situation or every different person might have to approach it differently.

Hannah (14:42):

Okay. So you mentioned three options offering compromise or an installment agreement or currently non-collectible. Could you tell us about each one of those? Let's start with an offer and compromise.

Jay (14:54):

So that's kind of like the scenario that you were just talking about, Hannah. It's more about in reality, you offer them something that's less than whether it be 20%, 30%, 40%, or 50%. Then you could submit that as a form 6, 5, 6 offering compromise to where you're going to submit that. Then you have to submit the financials as well to back it up, and then you have to submit a deposit for it at that point in time as well.

Hannah (15:22):

Does tax relief helpers have any sort of documents available to the public? Maybe free templates or anything like that that could help someone who maybe is not in a position to hire an attorney, they can maybe fill that out themselves and submit it?

Jay (15:36):

Yeah, I believe so. I would've to double check that, but I believe we do.

Hannah (15:40):

Gotcha. And your website is tax relief helpers.com. So let's move on then to the next one, Jay. The next option that you could potentially use to negotiate with the IRS is an installment agreement. Can you tell us how that would work?

Jay (15:57):

Yeah, so the installment agreements, it comes down to the three factors, just like the offer and compromise, currently not collectible. The IRS will operate off of assets, income, and expenses. So then you're going to have to fill up a Form 4 33, which is a IRS financial document stating all of your assets via bank accounts, credit cards, homes, whatever it may be, 401k IRAs, and then they're going to look at your, not only your state, but your city allowable expenses to show what your disposable income is at the end of the month, and then they'll go based off of 33% of the allowable or the disposable income to go into an installment agreement.

Hannah (16:41):

You said 33% is usually the cutoff

Jay (16:44):

For the allowable expenses or for the disposable income after the I arrest standards, allowable expenses.

Hannah (16:52):

Can you break that down a little further? What exactly does that mean?

Jay (16:56):

So there's a lot of people who will say, oh, well, I have two car loans that I'm paying on, but it is a single person and I have X, Y, and Z expenses. The IRS will only allow you to have a certain amount deductible for allowable expenses.

Hannah (17:13):

Gotcha. Okay. So it sounds like with the installment plan, you're going to end up probably paying the same amount that you would've normally paid, but you just do it over time. Is that right?

Jay (17:25):

You're going to be paying more because you're going to have penalties and interests that will accrue during that timeframe.

Hannah (17:32):

So it's probably best to try to set up a payment plan before the interest happens. Right.

Jay (17:38):

Well, anytime you do file and you create a balance with the IRS, they're going to attach interest to it at any point in time,

Hannah (17:45):

At any point in time, even if you haven't been delinquent and you haven't missed any payments, you're still Okay. Interesting. So maybe it's actually best to just pay it off all in a lump sum payment. If you are in a position to do that, then

Jay (18:00):

Yeah, and that's usually when people get their tax returns back, and if they do have a balance, they'll have the four payment vouchers with the accrued interest added to those payments already.

Hannah (18:14):

Okay. Well, let's discuss the last option, which is currently not collectible status. Can you tell us a little bit about that and how someone could apply for that?

Jay (18:24):

So let's say let's use a business owner, for example, that has been greatly impacted recently by some circumstances. Then they would submit again, the 4 33 documents stating that they currently don't have the ability to pay for it, and then they could be put on a currently non-collectible that is a temporary solution to the problem as well. So that would only be specific to that year. So as soon as that year is up, then they have to resubmit financials and hopefully not owe again.

Hannah (18:55):

Okay. So what does resubmitting financials look like at the end of the year? If they've had any sort of income changes within the last year, they would have to disclose that. Right. Gotcha. So in your opinion, Jay, for someone who might be struggling with tax debt on top of other types of personal debts, which of these three options do you think is the best one offer compromise installment agreements or currently non-collectible status?

Jay (19:23):

That's a tough question because it really pertains to that individual at that point in time, and that's why we have the best resolution department in the industry is because we can see exactly where that person's at and what would be the best outcome for them as well.

Hannah (19:42):

Yeah, so I guess for anyone struggling with these questions, figuring out which option might be best for you, you can check out Tax Relief helpers@taxreliefhelpers.com and see what might be the best solution for you and talk to an expert to get some individualized guidance. Right,

Jay (19:58):

Absolutely.

Hannah (20:00):

Awesome. Well, Jay, why don't we go ahead and transfer over to some real questions from real people submitted to the debt hotline. First question is from Ben Ano. It says, can a wage garnishment be reversed within 21 days? So I think we're assuming that this wage garnishment is from the IRS, can it be reversed within 21 days? Do you have any thoughts on that, Jay?

Jay (20:26):

In certain circumstances it can be, but again, there's a lot of factors that come into play here. One, you have to be in compliance, which means you have to file the up to current with all of your past taxes all the years before, and then you would have to get in touch with the IRS if you did not go with a tax relief company and then try and get in touch with them to release that garnishment.

Hannah (20:52):

So what does it mean to be current with your other taxes? Tax debt

Jay (20:57):

Up to date with filing, let's say somebody filed an extension for 2024, but they owe for 23, 22 and 21, and they put a wage garnishment in place, so then they would actually have to try and make sure that they didn't have any additional balances, and then you would have to go over the financials as well to make sure that you could submit that for them to even allow trying to lift that wage garnishment.

Hannah (21:23):

So it sounds like there might be a lot of red tape, a lot of hoops to jump through in order to get a wage garnishment reversed once the IRS has already started that process?

Jay (21:32):

Absolutely.

Hannah (21:33):

But it's not impossible to get it reversed within a few weeks?

Jay (21:37):

No, it's not impossible.

Hannah (21:39):

Gotcha. Alright, let's go ahead and move on to another question. This one is from Jonathan in Iowa, it says, I owe about $18,000 to the IRS from self-employment taxes During COVID, I was never able to catch up and now they've started sending levy notices. I also have about $9,000 in credit card debt. Which should I deal with first and can I negotiate both?

Jay (22:06):

I would address the IRS first unless the credit card debt has already gone into extreme collections. At least if you respond to the IRS about the notices, then you can at least hold off until for a certain amount of timeframe before they actually submit to levy or garnish you.

Hannah (22:27):

Yeah, and I would add to that, if you have $9,000 in credit card debt, typically credit card debt is the type of debt that will charge the most interest. The highest amount of interest, and correct me if I'm wrong, Jay, maybe you disagree, but there's probably a chance that the credit card debt's going to end up costing you more over time than maybe the tax debt would. So I do think it's important to at least engage with both the creditor and the IRS to just see what your options are. I think that could also delay any further action on their end, just engaging and communicating. But if your credit card debt's going to be charging a crazy amount of interest, it might be good to figure out a payment plan and prioritize that debt. But I do think that the IRS is typically maybe more aggressive with wage garnishment and levies than some creditors might be. So that's something to keep in mind as well. Would you agree, Jay?

Jay (23:22):

Absolutely. At that point, it's at least make contact with both to make sure that you could stop any type of collection efforts from either one of them.

Hannah (23:31):

Yeah, I think the key is to communicate, right, because most credit card companies have some sort of program or they can at least get you on a payment plan that makes more sense with your current financial status. And it sounds like the RS will also be flexible in certain cases if you're dealing with all sorts of debt and just trying to find a resolution. But again, I would just echo what I said before, that credit card debt usually charges pretty high interest, so that's another thing to consider as you're trying to prioritize which debt to pay off and which one you're trying to pay off faster. Or first, you might want to take a look at both debts and figure out which one would cost you more over time due to the interest involved. That might require a little bit of math, but again, you can reach out to tax relief helpers.com or you can go to solosuit.com.

We've got an AI bot trained to pass the CPA exam in the top 20% and also the bar exam, and you can interact with that. It's called Solo, and you can interact with that bot to kind of learn more about your situation and maybe even get some help with that math. So there's all sorts of resources out there to decide and prioritize which debt you should pay off first. Okay. Next question. This one is from Alan in Texas, and his question is the IRS says I didn't file in 2018 and 2019, but I did just not electronically. I'm now being told I owe over $40,000 including penalties. What are my options? If I don't agree with the amount,

Jay (25:07):

Then I would submit for the actual transcripts to see exactly what they have on file for you, because if they're saying that you didn't file, but you sent them in, if you didn't file 'em electronically, but you sent them in and you're just now getting notices, those could be balances that are called substitute for returns, which means that the IRS filed those returns for you without any deductions.

Hannah (25:34):

Yeah, and I would also add, it sounds like you might've mailed in your taxes instead of filing electronically, and there's never a guarantee that the IRS is going to receive something when it's sent through the mail. So when you are sending important tax documents like that, it could be a good idea to use special type of mail to make sure that you can track the status of the delivery of the package, make sure that it gets to the right place. Because I'm curious, maybe what happened here is maybe the IRS just never actually received your documents, even though you filled them out and sent them in. But yeah. Jay, any other thoughts on this one? You said they can request documentation from the IRS to see what they have on file, but any other tips?

Jay (26:21):

I would check to see if you have duplicates or copies of those returns you sent in. And then I would caveat the same thing that you just said, Hannah, next time, if that for anyone who's listening right now, if you do mail in your returns, make sure you send 'em certified because then someone will have to sign for 'em and then you'll know that they actually got 'em. But the IRS does make mistakes. I've seen several of our clients who have done the same thing, and then the IRS just filed those returns on their own for them.

Hannah (26:50):

Gotcha. Okay. Great advice. Let's see. Next question is going to be from Gary in Florida. Gary in Florida says, I'm on social security and just found out that the IRS offset my refund. I owe about $7,000 from a business I closed years ago. Can they garnish my benefits or take my stimulus checks too?

Jay (27:13):

Well, I'm assuming that at this point in time, they're not really sending out stimulus checks anymore, but as far as garnishing your benefits, if you're only receiving Social security, then they're not necessarily going to go after it. But if it was a business debt, I wanted to make sure that he was probably personally assessed. So as long as there's nothing lingering from the business or there's only one source of income, then I would say at this point in time, they're not going to be really coming after you too much unless there's something else that we can't see or we don't know.

Hannah (27:48):

So it sounds like Gary might be a little bit lucky in that this might not be a debt that the IRS will pursue super heavily?

Jay (27:55):

No, not if he only has social security.

Hannah (27:59):

Gotcha. We got another question from Ben Ano again. Ben says, does the tax advocate service generally respond quickly to avert levies and wage garnishment? So Ben, I'm assuming you mean does tax relief helpers help respond quickly to avert levies and wage garnishment? Jay, any thoughts on that?

Jay (28:19):

Well, if he's talking about the tax advocate service, because that's kind of a section to try and help people out with the IRS at times, but they're very slow to respond, which is specifically for garnishments. Usually that service is only utilized as far as a last ditch effort or trying to get in touch with them because there has been some documentation. Usually if you're trying to use this for a wage garnishment, it might take a while.

Hannah (28:49):

Jay, yeah. I wanted to ask you, do you have any other last thoughts on how to negotiate with the IRS? If you are in a position where you're really struggling with debt, maybe more than one type of debt, and you really just want to find a resolution, any words of advice or any interesting stories or experiences you'd like to share where you've seen people successfully negotiate with the IRS and Settle?

Jay (29:15):

I have probably dozens of stories as far as that goes. I know a lot of people that we've helped out with, but in essence, all it comes down to is responding to those notifications. In essence, if they're telling you that they're going to love you or garnish you and you don't have the time or you don't have the documentation, you got to weigh your options here on what would be the most beneficial position for you to be in, right? Because the end of the day, if they take, or if they levy your wages or they levy your bank account and garnish your wages, then you're not going to be able to handle any of the debts across the board.

Hannah (29:52):

And I think that it would levy a wage garnishment in many cases could be the worst case scenario. So if you can avoid that, I think at all costs and just communicate, communicate, communicate. Same can be said for other types of debt like credit card debt. Don't wait until the last minute. If you've been sued for debt, be sure to respond. If you've been sued for debt, definitely want to file an answer. If you don't file an answer, there's probably a good chance that you'll lose the case automatically. But if you can file an answer and then communicate with the creditor or the debt collector that's suing you, there's a better chance that you'll be able to find a resolution and that you'll be able to come out on top and settle your debt. So you can go over to solosuit.com if you've been sued for debt to respond to the lawsuit, buy yourself some time to negotiate and then find a resolution. We also have a tool called SoloSettle where you can negotiate with creditors and debt collectors online and completely digitize the process so you don't have to wait on hold, plague phone tag, do all those things that are a headache when you're trying to find debt resolution. You can also head over to tax relief helpers.com. Again, if you're dealing specifically with tax debt, they have an awesome team of attorneys that can help you negotiate, find a resolution, and settle your debts. Jay, any last words?

Jay (31:22):

Well, at the end of the day, tax problems are stressful but solvable. The most important thing is to take action. Just kind of like you said, work with someone who understands both your financial situation and the IRS system.

Hannah (31:34):

I agree there are a lot of resources out there. solosuit.com and tax relief helpers.com are two great resources to help you get back on track. Thanks everyone for watching and listening to the Debt Hotline. We really appreciate you submitting your questions. Again, if you would like to submit your own question, you can call us at six one three eight one eight one and leave a voicemail asking questions about debt, and we will respond to those questions every week on the podcast. And Jay, I want to say thank you so much for being our guest today and for sharing your expertise. I think you taught me a lot, and hopefully our audience also learned a lot as well.

Jay (32:17):

Thank you, Anna. I appreciated the time and I appreciate being on the podcast here.

Hannah (32:22):

Awesome. Well, thanks again everyone for listening to the Debt Hotline. Just know that Solo is rooting for you. We know that you can find a debt resolution. You can settle your debts head on over to solosuit.com if you have questions or want to get started with the process.

Disclaimer: The information presented in this podcast is intended strictly for general informational purposes and should not be construed as legal, financial, or investment advice. Solo and its hosts are not licensed attorneys, financial advisors, or other certified professionals. While select guests may hold active professional licenses, their contributions are purely for educational and thematic discussion. They're not delivering professional or personalized advice. Solo is not a law firm, does not offer legal representation and must not be relied upon as a substitute for professional legal counsel. It is also not engaged in debt, settlement, credit repair, or financial counseling services. Solo provides self-directed software tools designed to support users in navigating their own legal and financial situations. Participation in this podcast does not establish an attorney-client relationship. Listeners are encouraged to consult with attorneys or licensed professionals for guidance specific to their circumstances. The opinions expressed by podcast participants are their own and do not necessarily reflect the views or official positions of SoloSuit Inc. Doing business as Solo or any affiliated organizations.

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

• Alabama
• Alaska
• Arizona
• Arkansas
• California
• Colorado
• Connecticut
• Delaware
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Vermont; Vermont (Small Claims court)
• Virginia
• Washington
• West Virginia
• Wisconsin
• Wyoming

Guides on how to resolve debt with every debt collector

Are you being sued by a debt collector? We’re making guides on how to resolve debt with each one.

• 11 Charter Communications
• AAA Collections
• Aargon Agency Inc
• Absolute Resolutions Investments LLC
• ACEI Collections
• Account Services
• Accredited Collection Services
• Accredited Collection Services
• Advanced Recovery Systems
• AES NCT
• AFNI Collections
• Alco Capital Group LLC
• Aldous and Associates
• Alliance Collections
• Alliance One
• Alliant Capital Management
• Alpha Recovery Corp
• Alltran Financial
• Alltran Health
• Alorica Inc.
• Amcol Clmbia in Court
• American Coradius International
• American Profit Recovery
• American Recovery Service
• Americollect
• AmSher Collection Services
• Apelles LLC
• AR Resources
• ARC Collections
• ARM Solutions
• Arrow Financial Services
• ARS National Services
• ARSC Debt Collectors
• ARS National Services
• ARstrat
• AscensionPoint Recovery Services
• Asset Acceptance LLC
• Asset Recovery Solutions
• Associated Credit Services
• Atlantic Credit and Finance
• Atradius Collections
• Automated Collection Services, Inc.
• Autovest LLC
• Avante USA
• Avantus
• AWA Collections
• Balekian Hayes
• Bay Area Receivables
• BCA Financial Services
• BC Services
• Benuck and Rainey
• Berlin-Wheeler
• Bluebonnet Financial LLC
• Bonneville Collections
• Bull City Financial
• Bureaus Investment Group
• Cach LLC
• Caine and Weiner
• Capio Partners
• Capital Accounts
• Capital Collections
• Capital Management Services
• CardWorks
• Carmel Financial/New Coast Direct
• Cavalry SPV I LLC
• CBCInnovis
• CBCS Collections
• CBE Group
• CBV Collections
• CCB Credit Services
• CCS Collections
• CCS Offices
• Central Mediation Services
• Central Portfolio Control
• Cerastes LLC
• Choice Recovery
• Choice Recovery Inc
• CKS Financial
• CKMS Financial
• Client Services
• CMRE Financial Services
• COAF
• Coast Professional
• Comenity Bank Debt Collection
• Commonwealth Financial
• ConServe Debt Collection
• Consumer Collection Management
• Contract Callers Inc
• Convergent Healthcare Recoveries
• Convergent Outsourcing
• Couch Conville & Blitt
• Covington Credit
• CRDT First
• Credco in Court
• Credence Resource Management
• Credit Bureau Systems
• Credit Control Corporation
• Credit Management Company
• Credit Management LP
• Credit Systems
• Credit Systems
• CSIEZPay
• CTC Debt Collector
• CVCS Debt Collection
• Cypress Financial Recoveries
• D&A Services
• Daniels, Norelli, Cecere & Tavel P.C.
• DCM Services
• Debt Recovery Solutions
• Delanor Kemper & Associates
• Department Stores National Bank
• Direct Recovery Associates
• Discover Collections
• Diversified Adjustment
• Diversified Consultants
• Diversified Recovery Bureau
• DNF Associates, LLC
• Dodeka LLC
• DRS Credit
• Dynamic Collectors
• Eagle Loan
• Eagle Accounts Group, Inc.
• Eastern Account System
• EduCap
• Ellington and Associates Collections
• Encore Capital Group
• Enerson Law
• Enerson Law LLC
• Enhanced Recovery Company
• EOS CCA
• ERC Collections
• ERSolutions
• Estate Information Services
• Equable Ascent Financial
• Everest Business Funding
• Executive Credit Management
• Faber and Brand
• Factual Data
• Falls Collection Service
• FBCS
• FCO Collections and Outsourcing
• FIA Card Services
• fin rec svc (Financial Recovery Services)
• First Federal Credit Credit Control
• First Financial Bank
• First Portfolio Ventures LLC
• First Progress
• FirstPoint Collection Resources
• Firstsource Advantage
• FMA Alliance
• FNB Omaha
• Forster & Garbus
• Franklin Collection Services
• Freedom Plus
• Freshview Solutions
• Frontline Asset
• Frost Arnett
• Fulton Friedman & Gullace LLP
• Galaxy International Purchasing, LLC
• GC Debt Collection
• GC Services
• General Revenue Corporation
• GLA Collections
• Glass Mountain Capital
• Glasser and Glasser
• Global Credit Collection Corp
• Global Trust Management
• GMAC Financing
• Golden 1 Credit Union
• Grant and Weber
• Grant Mercantile Agency
• Gulf Coast Collection Bureau
• Gurstel
• Halsted Financial Services
• Harris and Harris
• Harvard Collection
• Harvest Credit Management
• Helvey and Associates
• Hollis Cobb
• Holloway Moxley
• Hosto Buchan
• Howard Lee Schiff
• H&R Accounts
• HRRG
• Hudson & Keyse LLC?
• Hunter Warfield
• IC System
• Impact Receivables Management
• Innovative Recovery
• Integras Capital Recovery LLC
• Javitch Block
• JHPDE Finance 1 LLC
• JP Receivables Management Partners
• JPMCB card
• Kenneth Eisen and Associates
• KeyBank student loans
• Kinum
• Kirschenbaum, Phillips & Levy P.C.
• KLS Financial Services
• Kramer & Frank
• Lakeside Collection
• Lending Club
• Lincoln and Morgan Kabbage
• Linebarger Goggan Blair & Sampson LLP
• Lockhart Collection Agency
• LJ Ross Associates
• LTD Collections
• Malcolm S. Gerald and Associates
• Malen & Associates
• Mandarich Law Group
• Mannbracken
• Marcam Associates
• MARS Inc. Collections
• MBA Law
• MCA Management Company
• McCarthy, Burgess & Wolff
• Meade & Associates
• Medicredit
• Mercantile Adjustment Bureau
• Merchants Credit Association
• MGM Collections
• Michael J Adams PC
• Midland Funding LLC
• Mid-South Adjustment
• Monarch Recovery
• Monterey Financial
• Moss Law Firm
• Mountain Land Collections
• MRS Associates
• MRS BPO
• MSW Capital LLC
• Mullooly, Jeffrey, Rooney & Flynn
• Nathan and Nathan PC
• National Collegiate Trust
• National Credit Adjusters
• National Credit Care
• National Credit Systems
• National Enterprise Systems
• National Recovery Agency
• National Recovery Solutions
• Nationstar
• Nationwide Credit
• Nationwide Recovery Services
• Nationwide Recovery Systems
• NCEP LLC
• NCO Financial Systems Incorporated
• North American Recovery
• Northland Group
• Northstar Capital Acquisition
• Northstar Location Services
• NPAS
• NRC Collection Agency
• Oliver Adjustment Company
• Oliphant Financial, LLC
• Oportun
• P&B Capital Group
• PCB Collections Agency
• Palisades Collection LLC
• Pallida LLC
• Paragon Contracting Services
• Paragon Revenue Group
• Payday Loan Debt Collectors
• Pendrick Capital Partners
• Penn Credit
• Perdue Brandon
• Persolve LLC
• Phillips & Cohen Associates
• Phoenix Financial Services
• Pioneer Credit Recovery
• PMAB LLC
• PRA Group, Inc.
• Pressler, Felt & Warshaw LLP
• Prestige Services, Inc.
• Prince Parker and Associates
• ProCollect
• Professional Finance Company
• Progressive Management Systems
• Provest Law
• PYOD LLC
• Quaternary Collection Agency
• RAB Collection Agency
• Rash Curtis and Associates
• Radius Global SOL
• Radius Global Solutions
• Rawlings Company
• Razor Capital
• Real Time Resolutions
• Receivables Performance Management
• Regents and Associates
• Reliant Capital Solutions
• RentGrow
• Resurgent
• Resurgent Capital Services and LVNV Funding
• Revco Solutions
• Revenue Enterprises LLC
• Revenue Group
• RGS Financial, Inc.
• RMP LLC in Court
• RMP Services
• RS Clark and Associates
• RSIEH
• RSIEH
• RTR Financial Services
• Rubin & Rothman
• Salander Enterprises LLC
• Samara Portfolio Management
• SCA Collections
• Scott Parnell and Associates
• Second Round Collections
• Second Round Sub LLC
• Selip & Stylianou LLP
• Sequium Asset Solutions
• Sessoms and Rogers
• Sherman Acquisition
• Sherman Financial Group
• SIMM Associates
• Source Receivables Management
• Southern Management Systems
• Southwest Credit Group
• Spire Recovery Solutions
• SRS Company
• Stark Collection Agency
• State Collection Service
• Stenger and Stenger
• Stillman Law Office
• Summit Account Resolution
• Sunrise Credit Services
• Superlative RM Debt Collector
• Suttell and Hammer
• Synergetic Communication
• Synerprise Consulting
• The Law Office of Michael J Scott
• Trellis Company
• Troy Capital
• TRS Recovery Services
• TrueAccord
• Tulsa Teachers Credit Union
• UCB Collection
• UHG 1, LLC
• Unifin
• Unifin Debt Collector
• Unifund
• Universal Credit Services
• US Bank Collections
• USAA collections
• USCB America
• Valentine and Kebartas
• Valley Servicing
• Vance & Huffman LLC
• Van Ru Credit Corporation
• Velo Law Office
• Velocity Investments
• Viking Client Services
• Wakefield and Associates
• Waypoint Resource Group
• WCTCB
• Weinberg and Associates
• Weltman, Weinberg & Reis
• Westwood Funding
• Williams and Fudge
• Wilshire Consumer Credit
• Wolpoff & Abramson
• Worldwide Asset Purchasing
• www.AutomotiveCredit.com
• Zarzaur & Schwartz
• Zwicker & Associates

Resolve your debt with your creditor

Some creditors, banks, and lenders have an internal collections department. If they come after you for a debt, Solosuit can still help you respond and resolve the debt. Here’s a list of guides on how to resolve debt with different creditors.

• American Express; American Express – Debt Collection
• Bank of America
• Barclay
• Best Buy Credit Card
• Capital One
• Chase
• Credit One Bank
• Old Navy Credit Card
• PayPal Synchrony Card
• Regional Finance
• Retailers National Bank
• Reunion Student Loan Finance Corporation
• SYNCB/PPEXTR
• Synchrony Bank
• Synchrony Walmart Card
• Target National Bank
• Webbank
• Wells Fargo
• Can I Pay My Original Creditor Instead of a Debt Collection Agency?
• Can I Settle a Debt with the Original Creditor?

Settle your medical debt

Having a health challenge is stressful, but dealing medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

• Am I Responsible for My Spouse's Medical Debt?
• Do I Need a Lawyer for Medical Bills?
• Do I Need a Lawyer to Fight Medical Bill Debt?
• Does Bankruptcy Clear Medical Debt?
• How Much Do Collection Agencies Pay for Medical Debt?
• How to Find Medical Debt Forgiveness Programs
• Is There a Statute of Limitations on Medical Bills?
• Medical Debt Statute of Limitations by State
• Summoned to Court for Medical Bills — What Do I Do?
• Summoned to Court for Medical Bills? What to Do Next

Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

• How Arbitration Works
• How to Find an Arbitration Clause in Your Credit Agreement
• How to Make a Motion to Compel Arbitration
• How to Make a Motion to Compel Arbitration in Florida
• How to Make a Motion to Compel Arbitration Without an Attorney
• How Credit Card Arbitration Works
• Motion to Compel Arbitration in California
• Sample Motion to Compel Arbitration

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

• 1-800-390-7584
• 800-289-8004
• 800-955-6600
• 8009556600
• 877-366-0169
• 877-591-0747
• 800-278-2420
• 800-604-0064
• 800-846-6406
• 877-317-0948
• 888-899-4332
• 888-912-7925
• 202-367-9070
• 502-267-7522

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

• 15 USC 1692 Explained
• Does the Fair Credit Reporting Act Work in Florida?
• FDCPA Violations List
• How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)
• How to Make a Fair Debt Collection Practices Act Demand Letter
• How to Submit a Transunion Dispute
• How to Submit an Equifax Dispute
• How to Submit an Experian Dispute
• What Debt Collectors Cannot Do — FDCPA Explained
• What Does Account Information Disputed by Consumer Meets FCRA Requirements Mean?
• What does “meets FCRA requirements” mean?
• What does FCRA stand for?
• What is the Consumer Credit Protection Act