As an Independent Contractor, (You Receive 1099’s) Owing the IRS Back Taxes is a Big Deal!

The IRS can force your clients to divert your 1099 income to them instead of you. This can put you in an embarrassing situation. It could cost you your clients.

And the IRS can and will levy your bank accounts to pay off your debt!

You know the upside of being an independent contractor: work the way you like to and most likely earn higher fees… Well, taxes and the IRS is the downside.

When your work happens to yield high pay, you have to stay on top of doing your taxes and paying what you owe, since you don’t have an employer making those payments for you.

It’s easy to get behind fully paying what you owe since you likely have a lot of outside expenses to cover, as well as paying employees if you have any.

Many of our independent contractor (sole proprietors) clients that we’ve helped and protected, got into a tight cash flow situation, delayed paying any taxes, and used “tax money” to cover their immediate needs. Their thinking was, ‘I’ll get caught up next quarter.’ But sometimes what you hope will happen, doesn’t happen. We get it. We’re business people too. Keep this in mind, the IRS doesn’t care about your cash flow, but we do!

Let’s be clear: getting up-to-date with any unpaid back taxes IS an immediate need.

If you haven’t filed taxes for a year or more, or if you’re on the IRS’s radar owing more in taxes than you can handle, until you get things resolved, then it’s only a matter of time before the IRS comes after you and taps into its toolkit to collect what you owe them.

They’ll go after your clients, your home, and your bank account!

Since you’re a 1099 contractor, and not a salaried employee, the IRS can’t garnish your wages (that is, withhold a certain amount of your salary from each paycheck until your tax debt is paid in full).

The reason the IRS can get away with this approach for salaried workers is that employers have to withhold payroll taxes, and are already plugged into the IRS tax-collection system.

Just because the IRS can’t garnish your 1099 income/wages doesn’t give you an escape route…far from it! You’ve got clients and the IRS will hunt them down!

While it may take the IRS longer to assess who your clients are, they can and will alert them to your tax debt (which can be VERY embarrassing) and have those clients divert what they’d normally pay to you, over to the IRS.

You can be sure that will put the kibosh on any decent standard of living that you may have…and will very likely cause you to lose a lot of those clients, and that albatross will likely prevent you from gaining new ones.

That’s only the beginning. The IRS has many other weapons in its vast arsenal to collect on your debt!

You can bet they will set about recouping their money by putting a lien on your house (which would make it impossible to sell, or even renegotiate the mortgage, until the tax debt is paid) or even by raiding your bank accounts. And what you’ve put away for retirement isn’t safe either.

A conversation can determine what the IRS knows about you!

It makes good sense that it’s important to understand what the IRS already knows about you and your situation, right?

But it can be very tricky and risky to attempt to have a conversation with the IRS unless you speak their language. That’s crucial! Tell them too much, or say the wrong thing (in their eyes) and you ruin everything.

Those are among the risks you face, and most people are very uncomfortable considering that route. And be advised, what you say can and will be used against you!

That said, when resolving your tax debt situation, it’s good to know up front the degree of risk you face from what the IRS already knows about you.

And that’s where IRS Tax Defense comes in! If you give us the go-ahead, we’ll take care of getting all of the necessary information and can put together the right plan of action for solving your specific debt situation.

Whatever weapons the IRS uses to collect a tax bill, you need an experienced tax resolution professional by your side, who can negotiate with the authorities before they pull out the big guns and attack your source of income, your bank account, and your livelihood.

And if they’ve already started that process, you’ve got to act FAST! Select one of the contact methods below to call the IRS Tax Defense experts for a FREE consultation!

The benefits include the possibility of an offer in compromise settlement, a payment plan, or even uncollectible status, where the IRS agrees that you cannot afford to make any payments and they do not levy to avoid creating a financial hardship.

Turn over dealing with the IRS to us and get behind our shield of protection. Schedule a Free consultation.

Our Tax Resolution Process

Phase 1: Discovery and Investigation

Step 1: Discovery – A FREE 15-minute call. We’ll ask you a few questions to determine the best way we can help you, so you can decide if we’re the right choice for you.

Step 2: Transcript Investigation – If you want us to help you, the next step is to get your IRS tax transcripts. It’s the information and filing records the IRS is using against you. It’s the foundation for us to develop a resolution plan for your specific situation.

The investigation will also tell us if the IRS considers you compliant or non-compliant. If you’re non-compliant, you cannot negotiate or make any offers to the IRS. We can work with you and the IRS to get you compliant, if that’s needed.

And lastly, we search to find out if the IRS has any open investigations on you that you’re not aware of.

Phase 2: Protection, Resolution Strategy, and Compliance

Step 1: Protection – This means you assign your tax problem to us. By executing a Power of Attorney, it informs the IRS Revenue Agents and Officers assigned to your case, that you’ve assigned us as your fiduciary to handle your situation.

We take over all communication with the IRS at this point. You focus on your day-to-day life. We keep you posted on what’s going on.

Step 2: Resolution Strategy – Having a clear understanding of your status with the IRS, we’ll create a resolution plan and discuss it with you. We’ll know if an Offer in Compromise is possible. There could be a better option. We’ll also know the Statute of Limitation for your situation – in some cases, it’s better to wait things out. You’ll have a clear picture of the outcome, and the cost to get you there.

Step 3: Compliant or Non-Compliant – Being “compliant” means that all tax returns for every tax year are filed and there are no issues. This is the point where, if you are non-compliant, we need to get you compliant. The IRS will not negotiate until you are compliant. This step is required before any offers can be submitted. We’re an IRS-proof CPA firm, we’ll get you compliant.

Phase 3: Resolution, Keeping You Protected, Celebrate

Step 1: Resolution – Once the IRS considers you compliant, we’re able to start negotiating with the IRS and get you the best possible deal. We push until we can’t push any further.

Step 2: Keeping You Protected – Keep in mind, while all this is happening, the Power of Attorney is protecting you as long as you’re meeting your obligations. We’ll continue handling all the IRS letters and calls. We’ll always keep you up to date on what’s going on via email and/or calls.

Step 3: Celebrate – Once we receive a final agreement from the IRS, we want you to celebrate and we’re going to help. You’ll receive a gift from us to get the celebration started.