This article is a condensed version of the “Stop IRS Collection” article at www.ataxlawyer.com. If you owe the I.R.S. taxes and can pay, then you should do so. If you owe the I.R.S. taxes and cannot afford to pay, there are things you can do to stop the I.R.S. from taking your wages, and/or assets.

Whenever a taxpayer asks for some sort of relief from the I.R.S., the I.R.S. will require the taxpayer to disclose its financial condition on form 433-A (for individuals) or 433-B (for businesses). Providing the I.R.S. a collection statement is necessary, but risky. It must be provided to get relief, but if relief is denied, the I.R.S. has a road map to your assets.

Generally, there are five ways you can avoid enforced collection activity when you cannot fully pay: (1) getting your account put on temporarily uncollectible status, (2) filing an offer in compromise, (3) filing for bankruptcy, (4) filing an innocent spouse petition, and (5) getting an installment agreement.

1. Getting Temporary Uncollectible Status.
If you simply cannot afford to pay any amount towards your tax liability, it may be possible to get the I.R.S. to put your account on “temporarily uncollectible status.” To qualify, your assets and income must be inadequate to pay any amount towards your tax liability. If the I.R.S. grants temporarily uncollectible status, you will generally get six months to a year free from the fear of enforced collection activity. You will have to report your income to the I.R.S. periodically.

2. Filing An Offer In Compromise.
The best way to settle your tax liabilities is through an offer in compromise (if you qualify). A successful offer in compromise will allow you to fully settle your tax liabilities for pennies on the dollar. Many types of taxes can be settled this way - including income taxes, payroll taxes, trust fund penalty, and estate taxes. A successful offer in compromise will result in the I.R.S. releasing its tax lien.

3. Filing Bankruptcy
No matter what type of tax you owe, filing bankruptcy will stop enforced collection activity, at least temporarily. While trust fund taxes cannot be discharged, other taxes (i.e.. income tax) can be discharged if they are old enough.

4. Filing an Innocent Spouse Request
If you owe from a jointly filed income tax return, you may be able to get innocent spouse relief where you would not have to pay the full amount due. If taking into account all facts and circumstances, it would not be fair to hold the innocent spouse liable, innocent spouse relief will be granted.

5. Getting An Installment Agreement
An installment agreement is nothing more than your agreement to pay a certain monthly amount. Interest and penalties continue to accrue. An installment agreement continues until either the tax liability is paid or until the ten year statute of limitations on collection ends. The monthly amount is negotiable.

Although you can represent yourself, it is a huge mistake to do so. Once a revenue officer (a collector) learns you represent yourself, you will likely be taken advantage of since you will not know when the revenue officer’s demands are illegal and/or improper. In nearly every instance, taxpayers do much better if they hire a competent tax litigation lawyer.