Few financial obligations carry the weight of an unresolved tax liability. The IRS and California's collection arms have powers no ordinary creditor possesses: federal tax liens that attach to every asset a taxpayer owns, levies on bank accounts and wages, passport revocation for seriously delinquent debts, and a ten-year collection statute that, once tolled, can stretch for the better part of a working lifetime. Resolving such a liability is not a clerical exercise. It is one of the central disciplines of tax practice.
We represent individuals and business owners in the resolution of federal and California tax debts that range from a few tens of thousands of dollars to multimillion-dollar exposures. The work is unglamorous and detailed: pulling transcripts, building Form 433 financial disclosures, negotiating with revenue officers, and sequencing the right resolution at the right moment.
Installment agreements
For many clients, the right answer is a properly structured installment agreement. The IRS offers several tiers, each with different documentation requirements: guaranteed agreements for liabilities under $10,000; streamlined agreements for liabilities up to $50,000 with limited financial disclosure; and fully documented agreements for larger balances or for taxpayers whose circumstances do not fit the streamlined criteria. California's Franchise Tax Board, CDTFA, and EDD each operate parallel programs with their own thresholds and documentation requirements.
The right installment agreement is the one the client can sustain. Defaulting an installment agreement reopens collection in full and frequently removes any goodwill that produced the original terms. We build agreements around real cash flow, not optimistic projections, and we coordinate them across federal and state agencies so the client is not left with a workable IRS plan and an unworkable state demand.
Offers in compromise
For some taxpayers, the better answer is an offer in compromise: a settlement of the liability for less than the full amount owed. The IRS evaluates an offer based on reasonable collection potential—essentially, what the government could collect if it liquidated the taxpayer's assets and applied future income over the statutory remaining collection period. Where the offer amount meets or exceeds that calculation, the offer can succeed.
Most offers fail not because the underlying facts were wrong but because the submission was incomplete, the financial disclosure was inconsistent, or the offer amount was set without regard to the agency's calculation methodology. We build offers from the ground up with the agency's worksheet in mind. The result is a higher acceptance rate, fewer rounds of correspondence, and a cleaner closing letter.
Currently not collectible
Some clients face liabilities they cannot pay and cannot compromise. For those clients, the right outcome is sometimes currently-not- collectible status: a designation that suspends active collection while the statutory limitations period continues to run. Properly structured, CNC status can move a taxpayer through enough of the ten-year statute that a meaningful portion of the liability eventually expires by operation of law.
Lien and levy release
Federal tax liens damage credit, complicate refinancings, and can block real estate transactions. We routinely secure withdrawals, subordinations, and discharges of federal tax liens where the statutory criteria are met. For levies on bank accounts or wages, the response must be immediate: the funds are frozen on the date of the levy, and demonstrating economic hardship or procedural defect is the only path to release. We act quickly, and we act with the documentation the agency requires to release rather than merely consider.
Coordination with planning
Collection resolution is most durable when it is paired with forward-looking tax planning. A taxpayer who resolves a $400,000 liability through an installment agreement and then immediately defaults the next year's estimated payments has solved nothing. We routinely pair resolution work with simple planning steps— adjusted withholding, scheduled estimates, entity restructuring, and quarterly reviews—so the underlying problem does not return.
A small-business owner with roughly $720,000 in combined federal and California income tax liabilities engaged the firm after three years of unanswered collection letters. We pulled transcripts, built coordinated Form 433 financial disclosures for both agencies, and ultimately settled the federal liability through an offer in compromise for $94,000 and the state liability through a five-year installment agreement at terms the client could sustain. Both agencies released active collection on the date the agreements were executed.
If you are facing an unresolved tax liability—whether the first notice has just arrived or the matter has been outstanding for years—earlier engagement nearly always produces a better result. We invite you to call.