Our Chicago tax law firm regularly works with individuals, startups, small businesses, and large corporations on everything from offshore tax positioning to debt resolution. Today we’ll look at the Illinois Department of Revenue’s tax collection tools and settlement negotiation options.
Owing Back Taxes: You’re Not Alone and Reduction Options Are Available
You’re not alone. Many people struggle with overwhelming tax debts. And thankfully, revenue agents understand financial roller coasters and will often compromise with constituents. In fact, it’s best to face the problem, take action, and work with an attorney who knows how to secure the best possible settlement.
Remember: With the help of a tax law attorney, there’s a very good chance you’ll be able to get your debt reduced, and in some cases eliminated.
How The Illinois Department of Revenue Collects Back Taxes
The Illinois Department of Revenue uses several tools to secure unpaid tax debts.
Illinois Department of Revenue Tax Debt Collection: Liens
State and federal authorities can use liens to collect tax debts. What does that mean, exactly?
Think of a lien as an ownership stake. So let’s say the Illinois Department of Revenue puts a lien against your house for $50,000. Five years later, you decide to sell your house for $500,000. But because of the $50,000 lien on the house, you will only pocket $450,000. (Our example doesn’t factor in mortgages or other real estate-related debts.). Moreover, liens are public and can impact your credit!
Illinois Department of Revenue Tax Debt Collection: Seizure
Authorities can seize material assets (real estate, automobiles, equipment, jewelry, luxury items, et cetera) to recover tax debt. Yes, seize; as in take. The Illinois Department of Revenue typically notifies people 10 days ahead of actual confiscations. Moreover, seized items usually can’t be sold or auctioned for at least 20 days after being commandeered. The extra 30 days gives folks a final opportunity to secure payment arrangements and halt seizures. Solutions can include negotiating loans or settlements. (Also: See tax debt relief options in next section.)
Illinois Department of Revenue Tax Debt Collection: Levies
Levies are another way the Illinois Department of Revenue reclaims tax debts. Levies are a practical and social hindrance, as authorities can take up to 15% of paychecks, plus communicate directly to employers about employees’ financial hardships.
One of the worst types of levies is a bank account levy. Often, Illinois Department of Revenue agents levy, or take, the funds of your bank account and apply it towards your tax debt. They do have to provide notice, and tax attorneys can try to stop it, but often once the funds are taken they are gone and applied to your tax.
Illinois Department of Revenue Tax Debt Collection: Professional Revocation
It may seem counterproductive, but authorities can revoke and suspend professional licenses, credentials, corporate charters, and lottery licenses. In some cases, they’ll include your name on a list of delinquent tax payers, which is posted online. Believe it or not, the Illinois Department of Revenue will often prefer to shut down a business with a tax debt rather than to allow it to operate and pay back the debt. With the help of a tax attorney, we can help increase your chances of working out a payment agreement and continuing your business.
Possible Tax Debt Relief Options
So now what? Don’t have an anxiety attack; you have options. Let’s review a few.
Debt Settlement Negotiations
The Illinois Department of Revenue is open to negotiations. They’re goal is to secure tax revenue for the state, but they’re not in the business of bankrupting residents.
One of our Illinois tax lawyers will captain your negotiation ship. We know the best ways to approach specific situations and how to approach revenue officers. As such, we have the knowledge and connections to significantly reduce or eradicate your tax debts. We can often obtain payment plans that will allow for several years to pay off debt.
Offers In Compromise
Offers in compromise are an IRS debt reduction option. However, a fair warning: The rules are set in stone and messing up the paperwork can prove costly. As such, it’s best to work with an attorney who understands the program inside and out.
Innocent Spouse Relief
Is your tax debt tied to delinquencies generated by an estranged or former spouse? If so, you may be able to offload the responsibility via an innocent spousal relief dispensation. Our Illinois tax law team regularly works with individuals dealing with marital dissolution debts.
Often, the bulk of tax debts are late fees and penalties. Under the right circumstances, and with the help of a tax consultant, you can get these fines and fees reduced or completely erased. Our team of Illinois tax law attorneys has the experience and know-how you need to get the job done.
Connect With A Chicago Tax Lawyer Today
Are you struggling with tax debt? We’re here to make it better. Our team of friendly and skilled attorneys knows exactly what to do. We’ll negotiate with the IRS and revenue departments on your behalf. Most importantly, we’ll make sure you pay the least amount possible.
In most instances, we’re able to secure significantly reduced settlement amounts.
The consultation is on us. Get in touch today to begin the conversation. We have the answers you’re looking for and the know-how to secure the best possible outcome for your tax debt setbacks.
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