IRS Debt Relief in Los Angeles: Solutions for Every Taxpayer

Why Tax Debt Relief Los Angeles Matters Now

Tax debt relief Los Angeles is a critical resource for individuals and businesses facing overwhelming IRS or state tax obligations. If you’re struggling with back taxes, penalties, or aggressive collection actions, several proven solutions can help you resolve your debt and regain financial stability.

Quick Answer: Your Main Tax Debt Relief Options in Los Angeles

• Offer in Compromise (OIC) – Settle your tax debt for less than you owe (typically takes 6-12 months, $205 application fee)
• Installment Agreements – Pay your debt over time through monthly payments (available online for debts under $50,000)
• Currently Not Collectible (CNC) Status – Temporarily pause IRS collections if you’re facing severe financial hardship
• Penalty Abatement – Remove or reduce penalties through First-Time Abatement or reasonable cause
• Innocent Spouse Relief – Get relief from tax debt caused by your spouse’s errors on joint returns
• Bankruptcy Discharge – Eliminate certain tax debts if they meet specific age and filing requirements

When taxes become unmanageable, the IRS can garnish wages, levy bank accounts, and place liens on property. Ignoring the problem only makes it worse, as penalties and interest compound daily. Los Angeles taxpayers may also owe taxes to the California Franchise Tax Board (FTB) or the City of Los Angeles, each with its own collection powers.

The good news? Multiple solutions exist, and choosing the right one can save you thousands of dollars and years of stress. An Installment Agreement works if you can afford monthly payments, while an Offer in Compromise may be ideal if you cannot pay the full amount. The key is to act quickly, as waiting allows penalties to grow and collection actions to escalate.

I’m Attorney Samuel Landis, Managing Partner at Segal, Cohen & Landis, with over 15 years of experience in tax controversy resolution. My firm has helped thousands of Los Angeles taxpayers steer complex Tax debt relief Los Angeles cases, from simple payment plans to multi-million dollar settlements.

Understanding Your Tax Debt And Its Consequences

When you owe the IRS or a state agency like the California Franchise Tax Board, the initial bill quickly grows with compounding interest and penalties. These agencies have powerful collection tools they can use without a court order.

Ignoring official notices is a common mistake that invites more aggressive action. Here’s what can happen:

• Tax Liens: A Tax Lien is a legal claim on your property (home, car, bank accounts). It becomes a public record, damaging your credit and making it nearly impossible to sell assets or get a loan.
• Wage Garnishments: The IRS can legally require your employer to send a portion of your paycheck directly to them. A Wage Garnishment can leave you with only a fraction of your income to cover living expenses.
• Bank Levies: Without warning, the IRS can freeze your bank accounts and seize the funds to cover your debt.
• Asset Seizure: In extreme cases, the IRS can take and sell your property to satisfy what you owe.

These actions create immediate financial and emotional distress. The constant worry affects your sleep, relationships, and well-being. The good news is that these collection actions can be stopped. By entering into a payment agreement or negotiating a settlement through tax debt relief Los Angeles programs, you can protect your income and assets. At Segal, Cohen & Landis, we help clients take action and begin Resolving Back Taxes before the situation spirals out of control.

Key IRS Tax Debt Relief Programs For Los Angeles Residents

The IRS offers several legitimate programs to help taxpayers resolve federal tax debt, but eligibility is based on your specific financial situation. Navigating these options can be complex, but understanding them is the first step toward a solution. We explore these and other solutions in detail on our Tax Debt Relief Options page.

Offer in Compromise (OIC): Settling for Less

An Offer in Compromise allows you to settle your tax debt for less than the full amount owed. The IRS agrees to an OIC if there is “Doubt as to Collectibility,” meaning they don’t believe they can collect the full amount. To qualify, you must provide extensive financial documentation (Form 433-A/B) to prove your inability to pay. The process is complex, involves a $205 application fee (which may be waived), and typically takes 6-12 months. While the IRS offer in compromise pre-qualifier assessment offers a preliminary check, professional guidance can be crucial for success. Learn more on our IRS Offer in Compromise page.

Installment Agreements: Making Monthly Payments

If you can pay your debt over time, an Installment Agreement is a straightforward solution. This puts your tax debt on a payment plan, typically for up to 72 months, and stops aggressive collection actions.

• Streamlined Installment Agreements: For combined tax, penalties, and interest under $50,000, you can often apply online and get approved quickly.
• Partial Payment Installment Agreements (PPIA): If you can’t afford to pay the full amount but don’t qualify for an OIC, a PPIA lets you make smaller monthly payments. The IRS may forgive the remaining balance if the collection statute expires.

We help clients with Back Taxes establish payment plans that fit their actual budget.

Currently Not Collectible (CNC) Status: A Temporary Pause

If a medical emergency or job loss makes it impossible to pay your tax debt without severe hardship, you may qualify for Currently Not Collectible status. CNC temporarily halts all IRS collection actions, providing critical breathing room. It is not debt forgiveness; interest and penalties continue to accrue, and the IRS will review your financial situation annually. To maintain CNC status, you must remain compliant with all future tax filings. Learn more about IRS Currently Not Collectible status and its requirements.

Penalty Abatement: Reducing Added Costs

Penalties for failure to file or pay can significantly increase your debt. The IRS may remove or reduce these penalties if you have a valid reason.

• First-Time Penalty Abatement (FTA): If you have a clean tax history for the past three years, the IRS may waive certain penalties as a one-time courtesy.
• Reasonable Cause: Penalties may be abated if you can prove that circumstances beyond your control, such as a serious illness, natural disaster, or inability to obtain records, prevented you from meeting your obligations.

Requesting abatement typically involves submitting Form 843. While it doesn’t reduce the tax itself, successful IRS Penalty Abatement can lower your total debt by 25% or more.

Specialized And State-Specific Tax Debt Relief Los Angeles

Los Angeles residents often face tax obligations to the federal IRS, the California Franchise Tax Board (FTB), and the City of Los Angeles. Each agency has its own relief programs, and a comprehensive strategy must address them all. Many state and local options mirror federal programs, but with key differences.

Innocent Spouse Relief: When You’re Not at Fault

When you file a joint tax return, both spouses are held responsible for the entire tax debt. Innocent Spouse Relief protects you from tax debt created by your current or former spouse’s errors without your knowledge. Relief options include Traditional Innocent Spouse Relief, Separation of Liability Relief (for those divorced, separated, or widowed), and Equitable Relief for cases where it would be unfair to hold you liable. Qualifying requires careful documentation and a compelling case.

Discharging Tax Debt Through Bankruptcy in Los Angeles

While many assume tax debt is non-dischargeable in bankruptcy, certain older federal income tax debts can be eliminated. In Chapter 7 bankruptcy, tax debt may be discharged if it meets the 3-Year Rule, 2-Year Rule, and 240-Day Rule, and there is no evidence of fraud. Chapter 13 bankruptcy allows you to repay tax debts through a 3-to-5-year plan, stopping all collection actions during that period. The intersection of tax and bankruptcy law is highly technical, so it’s wise to Explore your options with bankruptcy specialists. Our business tax attorneys in Los Angeles can help determine if this is the right path for you.

California State and Los Angeles City Tax Relief

The California Franchise Tax Board (FTB) offers its own Offer in Compromise program, which you can apply for when you Make an offer on your state tax debt. The FTB’s OIC has no application fee and is often processed faster (4-6 months) than the IRS version. The City of Los Angeles Office of Finance also has an OIC program, but it is limited to business tax liabilities only and requires a $150 deposit. If you owe multiple state agencies, a Multi-Agency Form for Offer in Compromise (DE 999CA) can streamline the process. Coordinating tax debt relief Los Angeles efforts across all agencies is key to a successful outcome.

The Professional’s Role In Navigating Tax Debt

Dealing with tax debt is overwhelming. The forms are confusing, the rules are complex, and a single mistake can make things worse. A qualified tax professional acts as your translator, strategist, and shield, navigating the system on your behalf.

A tax attorney does more than fill out paperwork. We analyze your financial situation to identify the best Tax debt relief Los Angeles programs for you and build the strongest possible case. The difference between applying alone and with an experienced attorney is often success versus rejection. At Segal, Cohen & Landis, we have over 33 years of experience helping more than 25,000 clients find relief. If you’re looking for a Los Angeles tax attorney, you’ve found a team that understands what works.

Why Work with a Los Angeles Tax Attorney?

• Expert Negotiation: We know how to frame your case to convince the IRS and FTB that your proposed solution is reasonable and that you deserve consideration.
• Local and State Law Knowledge: We handle federal, state, and local tax issues seamlessly, ensuring a comprehensive strategy. Our expertise in Los Angeles tax laws and IRS representation prevents costly oversights.
• Handling All Communication: Once you retain us, we handle all correspondence and calls from tax authorities. You no longer have to face intimidating revenue officers alone.
• Protecting Your Rights: We ensure tax agencies follow proper procedures and challenge improper collection actions, such as levies and garnishments.
• Peace of Mind: Our clients value the relief that comes from knowing an experienced professional is managing their tax problem, allowing them to focus on their life and work.

Our guide on how to find a tax attorney in Los Angeles can help you understand what to look for in a representative.

Timelines and Required Documentation

Resolving tax debt takes time and thorough preparation. Timelines vary by program:

• Offer in Compromise: 6-12 months for IRS evaluation.
• Installment Agreement: Days to a few weeks for streamlined agreements.
• Currently Not Collectible Status: 30-60 days for processing.
• Penalty Abatement: A few weeks for FTA, several months for reasonable cause.

Documentation is critical. The IRS requires a complete financial picture, including:

• IRS Form 433-A or 433-F (Collection Information Statement)
• Bank statements, recent pay stubs, and proof of expenses (rent, utilities, medical bills)
• All tax returns must be filed and current.
• Valuations for assets like real estate or vehicles.

Gathering these documents is a challenge. We provide a clear checklist and help organize everything into a compelling application. We are transparent about our fees, which you can learn about in our article on the average costs of hiring a tax attorney in Los Angeles.

Frequently Asked Questions About Tax Debt Relief In Los Angeles

Facing tax debt brings up many questions. Here are concise answers to the most common concerns we hear from Los Angeles residents.

How do I know if I’m eligible for tax relief?

Eligibility depends entirely on your unique financial situation. The first step is to ensure all your tax returns are filed, as the IRS will not consider relief otherwise. For an initial check on one program, the IRS’s pre-qualifier tool can estimate your eligibility for an Offer in Compromise. However, for a comprehensive analysis of all available federal and state programs, a consultation with a tax professional is the best way to determine your optimal strategy.

Will tax debt relief hurt my credit score?

The tax debt itself is what damages your credit, especially if the IRS files a federal tax lien. A lien is a public record that significantly lowers your credit score. Actively resolving your debt through a program like an Installment Agreement or OIC is a positive step. While the lien may remain during the process, successfully completing a relief program can lead to its withdrawal, allowing your credit to recover. Ignoring the debt is far more damaging to your credit in the long run.

Where can I find free tax help in Los Angeles?

If you are a low-income taxpayer, free resources are available. The Low Income Taxpayer Clinic (LITC) program provides free or low-cost assistance with IRS audits, appeals, and collection matters. In Los Angeles, the County Department of Consumer and Business Affairs can connect you with local LITC services to ensure you have representation. You can find more information on their Tax Dispute Help page. For more complex cases, our firm offers consultations to discuss your options and our transparent fee structure.

Conclusion: Take The First Step Towards Financial Freedom

Remember this: tax debt is solvable. Whether you owe thousands or millions, a path forward exists. We’ve walked you through the solutions, from Offer in Compromise settlements to manageable Installment Agreements. These are real programs that help people regain financial control every day.

The single most important factor is taking action. The longer you wait, the more penalties and interest accumulate, and the fewer options you may have. While facing the IRS is daunting, the relief of resolving the problem is immeasurable.

For most tax debt situations, professional guidance is crucial. The IRS has its experts; you deserve one too. At Segal, Cohen & Landis, we have spent over 33 years mastering Tax debt relief Los Angeles. We know the federal, state, and local rules, and we fight for the best possible outcome for our clients. We handle the bureaucracy so you can focus on your life.

You’ve already taken the first step by educating yourself. Now, let’s take the next one together.

Contact our experienced Los Angeles tax attorneys today for a confidential consultation. There’s no judgment here, only solutions. Let us help you find the relief you deserve.