Main Street Business · 2026-04-21 · 34 min
Key moments - from our scoring
Substance score
60 / 100
Five dimensions, 20 points each
This episode addresses a widespread anxiety among business owners and freelancers: owing taxes you can't immediately pay. Kohler and Sorensen establish a crucial mindset first - jail is unlikely if you're trying to resolve the debt, but federal tax liens, credit destruction, and passport holds are real consequences of inaction. They categorize taxpayers into four scenarios: those who haven't filed for years (worst), those who missed the April 15 deadline without filing an extension, those who filed but owe, and those who filed an extension and owe (least problematic). The conversation then walks through specific penalty structures: failure-to-file penalties (5% monthly) versus failure-to-pay penalties (0.5% monthly plus interest), showing concretely how a $100,000 debt accumulates roughly $1,000 monthly in penalties and interest. They emphasize that filing an extension dramatically reduces audit risk and that requesting a 180-day extension from the IRS (free for debts under $100K) buys crucial time. For larger debts or longer timelines, installment agreements require professional help - the hosts stress that engaging a tax professional becomes essential once you're in collections territory, and warn against predatory tax relief companies that oversell their services.
You'll incur a 5% monthly failure-to-file penalty on top of the debt itself; however, you can still file an extension online or by phone. Filing immediately - even with estimates - triggers only a 0.5% monthly failure-to-pay penalty going forward and stops the 5% penalty from accruing further.
Yes, you can request a free 180-day extension (roughly six months) online or by calling the IRS; it's largely automatic for debts under $100K and doesn't require a financial statement. This buys you time while you accumulate roughly 1% monthly in penalties and interest.
Jail is unlikely unless you commit tax fraud or refuse to cooperate for years; the more common consequences are federal tax liens against your assets, destroyed credit, passport holds, and eventual bankruptcy if the debt snowballs unchecked.
A 180-day extension (free for debts under $100K) gives you six months to pay in full or in chunks; an installment agreement is for longer-term payment plans and requires you to keep filing future returns on time, making it more complex and typically requiring professional representation.
No - the IRS never initiates contact by phone; they only mail notices. Any phone call claiming to be the IRS demanding immediate payment is a scam, and predatory tax relief companies actively target people who owe, so hang up and do not engage.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode provides actionable, specific IRS procedures and penalty calculations (failure to file 5% monthly vs. failure to pay 0.5% monthly, 180-day extension mechanics, installment agreements up to 72 months) that a business owner genuinely needs to know. However, much time is spent on motivational framing, emotional reassurance, and repetitive warnings (e.g., IRS scams, don't hide letters) that reduce substantive density. The core tax mechanics are solid but padded significantly.
Failure to file is 5% a month of what you owed. Not good. But if you file an extension, the IRS is like, all right, at least we know you're you're in the system. We know you're not trying to hide from us. You filed an extension, we're gonna wait for that return. You have until October, it's only a penalty for failure to pay because you bought time. That penalty is a half a percent per month.
If you owe the IRS $10,000, you owe them approximately $50 a month. That's the penalty until you file and pay. Um, and the interest is approximately um a half a percent per month because it's 7% divided by 12, blah, blah, blah.
The episode recycles standard IRS compliance frameworks (extensions, installment agreements, offers in compromise) without novel strategic insights. The advice to borrow from family instead of the IRS is practical but not particularly original. The categorization of tax situations (worst to least worrisome) is somewhat useful for framing but not groundbreaking. No contrarian or first-principles thinking is evident.
There is a path, and you can take care of this. The the best thing to do is to start taking action immediately.
The more productive you can be with your head up, looking to the future, making money, trying to be productive, is gonna help you get out of this debt sooner than trying to cut a deal and be broke.
Mark J. Kohler is described as a tax/legal expert with 25 years of experience and runs KTO Slurs law firm; he has genuine IRS practitioner credentials and personal experience with installment agreements and low-income taxpayer clinics. However, the transcript reveals minimal differentiation or specialized expertise - the advice is largely standard IRS procedure. No independent verification of Kohler's depth or track record is evident from the conversation itself; he functions as a knowledgeable generalist rather than a standout specialist.
And I know I've been on an installment agreement before too.
I worked in the low-income taxpayer clinic, and then I did it at the bar association here in Arizona.
The episode includes concrete penalty percentages (5% failure to file, 0.5% failure to pay, 7% interest), example dollar amounts ($10K owing ~$108/month in penalties/interest, $100K owing ~$4,500 over six months), and specific timelines (180-day extension, 72-month installment agreements). However, evidence is sparse on real company examples, case studies, or named client outcomes. The examples are illustrative hypotheticals rather than ground-truth proof. References to Sarah Fallis and Farah as real practitioners add some specificity but lack detail.
If you owe the IRS $10,000, you owe them approximately $50 a month. That's the penalty until you file and pay. Um, and the interest is approximately um a half a percent per month because it's 7% divided by 12, blah, blah, blah.
if you owe 100K, you're gonna owe you're gonna be on the same path or road as the people that haven't filed for years. You just owe the IRS. And what are your choices?
The host (Matt Sorensen) asks reasonable opening questions and lets Kohler elaborate, but follow-ups are mostly affirmations or gentle redirects rather than genuine probing. When Kohler misstates 72 months as five years instead of six, Matt corrects him gently but doesn't press on the underlying logic. There's minimal adversarial or skeptical questioning - the conversation reads as aligned storytelling rather than rigorous examination. The hosts share personal anecdotes (payment plans, extension strategies) but don't push each other on nuance or contradictions.
Okay, that's the damage. So it's not the end of the world. That's why we put this category four. Yeah, that was a mouthful.
I like that you just said that. The next thing that's gonna happen once you do file and you catch up those prior years or you did it for this year, whatever, that letter comes in the mail.
Computed from the transcript - who did the talking, and the words that came up most.
Can't pay your taxes? Get a Comprehensive Tax and Business Consultation so this never happens again. Book a Call Here Marks most recent article - Ready to Take the Next Step? Work With Mat & Mark’s Law Firm Get strategic legal guidance for your business, taxes, asset protection, and estate planning with KKOS Lawyers . [Book a Call with KKOS Lawyers] Take Control of Your Retirement Want to invest your IRA or 401(k) in assets you actually understand?
Transcribed and scored by The B2B Podcast Index.
Welcome everyone to the Main Street Business Podcast. This is Matt Sorensen. So excited to be with you today with the incredible Mark J. Kohler.
Thank you. And this is not exciting, though. This is a hard one. I know, but it's something you need to know.
Yeah. And if you clicked on this, because you might be in a bucket where you care about not going to jail because the IRS is going to chase your butt down. That's what you think. Like Wesley Snipes.
Don't be like Wesley Snipes. He didn't pay his taxes and went to prison, okay? You want to make sure you pay your taxes. And if you're in that situation where you owe, we want to go over some solutions and strategies for you.
Yeah. And we are going to do a little mindset work here at the beginning because I don't want to make light of this. We know some of you listening have a friend, a family member, a parent, yourself, and you haven't maybe filed for a year or two. You don't even know what you owe, and you're scared to death.
And uh we've Matt and I have had counts countless conversations with people like this. And um, Matt and I have, you know, sometimes I don't have enough to pay on April 15th or October 15th. I've done a payment plan at one point in my big career. So let's so before we tell you what your options are, let's talk about a little bit about the mindset here.
The IRS is not gonna put you in jail. Can we, you know, like you're if you really not want to pay the IRS and fight them for the next five years, at some point, they will throw you in jail. But if you're trying to figure this out, you're trying to pay, you're trying to get good, you're not gonna go to jail. So yeah, what here's here's probably the most likely outcome though, though, and problem we see, which can be devastating.
I mean, obviously, going to jail is like that does happen. It's a small percentage of people, and it's it's tax fraud. That's what you're going for. But people that just aren't paying, um, what's gonna start happening is you're gonna have federal tax liens against any assets you have, destroying your credit.
And by the way, the states are more aggressive than the IRS. So I know you want to we don't want to freak people out, but I just also want to be take this serious. Yeah. Like kind of like this will come around and slap you in the ass if you don't start paying attention.
And I thought the worst thing you were gonna say is I'll say it starts to snowball, it gets out of control. Um, and then you get to the point where you would never be able to pay it, and now you're in bankruptcy. Yeah. And you and it destroys your yeah, and I hate to keep piling on.
Yeah, but I know clients too that have missed out on family trips, important things in foreign countries because their passport can't get renewed because they owe the IRS. Oof. Wow. Now, I'm gonna I'm gonna still throw out one more lifeline here.
I want you to know give and take. Wow. I fear I feel like people are like locked or loaded with their, you know, somewhere. That's no, no, no.
Do not do, you know. I'm trying to let you know that this is more common than you realize. This happens to a lot of people. There is a path, and you can take care of this.
The the best thing to do is to start taking action immediately. And the fact you're watching or listening to this right now is a huge step because it's painful. And I know many of you haven't even talked to your spouse about this. Your spouse may be at home thinking everything is you know peachy fine, whatever.
You um may not have told anyone. And I will just say when problems like this get under get are hidden and put away, they get worse. The stress, the high blood pressure, it is not worth it. So you need to start talking about it and getting help.
There is a path. Okay, so there we go. I just wanted to say that right out of the gate. Yeah, yeah, it's important.
Oh, yeah. Okay. Okay. Well, let's talk about April 15th, with this, which is just barely in the rear view mirror mirror here.
Um, it's the big deadline of when you need to file your tax return. Now, you could have filed an extension on your personal return up until October 15th, but April 15th is a big deadline. And I think we have three categories that you could be in. We have four.
I added four. Okay. And because we didn't even go down this crazy part. You have not filed your taxes for several years.
Number one. Now that is red alert, probably the worst. Yeah. I'm going to say number one, and then let's go from worst to the least stressful.
Number two is you did not file an extension. Yeah, you didn't file on April 15th, nor did you even do an extension. Yeah. So you're like, and and a lot of people do that because they're like, uh, I can't pay, so I'm not going to file even an extension.
You know, whatever. You know, you think a little more time. Yeah. And you think the IRS, you know, there's forgiveness here or something.
No, there's not. We'll come back to that. Okay. So number two, you haven't even filed an extension.
Now you filed 2024. Yeah. Yeah. But just 2025 for some reason got away from you.
You're nervous. You're scared. You got busy. You forgot.
You didn't file an extension and you think you owe two. Yeah. That's category two. All right.
Now the third category is um extension and oh? I think we're going to worst. No, I think worse. Yeah.
Let's say worse is you filed by April 15th and you owe money. And you don't have enough to send the big lump sum on to cover that amount that you actually owe. But you've already filed. Yeah.
I like that. And the reason why I'm going to put that, I agree with you on the third worst is because now you've told the IRSs what's going on. I owe you, I filed, I can't pay. So now you're in a different track with them.
Now, if the fourth, which is the least worrisome, is you file an extension. So the IRS does not know what's going on yet. And uh and you owe and you think you owe. You don't know how much because you haven't filed yet, but you file an extension.
No, but you're pretty sure you owe. Yeah, yeah. You're just like, I know this isn't gonna hit. Now, now you know what's funny?
I I feel this. Tell me if you like this. Let's now go in reverse back. I love it.
Okay. So for those of you who are in one of those four categories, let's go over them again. Worst, you haven't filed for years. Number two, you didn't even file an extension and you think you owe.
Third, you filed, but you owe. Or four, you filed an extension and probably owe. Okay. So they're gonna go in reverse now.
Yeah. If you file an extension and owe, what would you do? Or will that talk about what the damage is? Yeah, I think well remember when you let's talk about this one.
When you filed that extension, that was only an extension of time to file the the taxes that you still owed for 2025 needed to have been paid by April 15th. So you did not extend when the payment should have been made. So if you're in that category, the right way to have done that would have been to send a tax payment estimating what you would have owed, what you think you would have owed, still on April 15th. So that's where you're sitting right now.
Yeah. And I'm gonna, I'm I Matt knows I probably say too much on full transparency. I've been on the phone with my executive assistant all morning. She goes, you know, we're filing an extension.
I always do. And by the way, we need to throw this out. You by filing an extension, you reduce your chances of an audit. Yeah.
You you actually do. So anybody that's told you, you better file by April 15th, you're gonna get audited. Bull trap. Couldn't be wrong.
It's more wrong. There is so much data to show. If you file an extension, give yourself time to file properly and even pay later in the summer, you reduce your chances of an audit because the IRS is already dealing with everybody that filed. You're like at the end of the line.
So I'd rather be at the end of the line than the first of the line. Okay. Now I want to say this me, I'm filed an extension, um, and I'm sending money, probably not enough. So I'm still gonna owe, but I'm gonna send in all I can, and that's okay.
Here's the numbers. When you file an extension, you avoided the worst penalty of all. Failure to file. Failure to file is 5% a month of what you owed.
Not good. But if you let the IRS know what but if you file an extension, the IRS is like, all right, at least we know you're you're in the system. We know you're not trying to hide from us. You filed an extension, we're gonna wait for that return.
You have until October, it's only a penalty for failure to pay because you bought time. That penalty is a half a percent per month. Much more digestible. And then interest with the federal rate last year was 7%.
I think it's about the same this year. So, what does that mean? If you owe the IRS $10,000, you owe them approximately $50 a month. That's the penalty until you file and pay.
Um, and the interest is approximately um a half a percent per month because it's 7% divided by 12, blah, blah, blah. So you would owe about $58 a month in interest. So for $108 a month or part thereof, that's what you owe on a $10,000 bill. So if you pay in July, then you gotta pay for your April month part thereof, May, June, and July.
That's four. So I would have to pay $200 in penalties in July and $225 approximately in interest. So you're out about $450 to $500. That's the damage.
So it's not the end of the world. That's why we put this category four. Yeah, that was a mouthful. Yeah.
And I think in that situation, you've bought yourself six months here to get your crap together, to get the funds together, so that when you file that final return on October 15th and there's an amount owed, you can send that in. Now, you would you're when you file on October 15th, you're gonna have all these additional penalties Mark talked about there. So if you you owed, let's say 100 grand, let's go war into some bigger numbers here, you're my and then it's another 10% of interest over that window plus the um failure to pay penalty, or excuse me, yeah, failure to pay penalty, we're maybe gonna owe another 10 grand.
July, August, September, October. So it's seven months times the approximate, it'll be around $3,500. For that. Plus I'm at it, plus I got the half a percent.
Or sorry, I got the interest on the that's the interest and penalty. Um instead of $400 or $450,500 a month on $10,000, it would be about $4,500 for $100,000. Anyways, what I'm what I'm just saying here is it will sting a little bit. Like this is not free.
Yeah, and some people will say, well, it's cheaper. I'd I'll just keep that money invested and it's cheaper. That's debatable. Yeah, it's it's not cheap to just not pay the IRS on time, but it's not bad either.
Yeah. It's like you get your crap together and get and get ready to try to throw that final amount in by October 50th. It's approximately one. So, in summary, if that was a little garbly goop, I'll just say this.
If you file an extension, it's approximately one percent per month for penalties and interest. Approximately. So if you owe a hundred grand, it's gonna go a thousand a month. Six grand.
All right, until the until the time. If you wait till October 50. If you wait till October 50, it'll be around six grand. Now, let me just say the failure to file kicks in if you don't file.
So let's transition to the second worst scenario. You did not file an extension. Now, some of you listening today, this is after April 15th. You're like, holy crap, I wish I knew how to file an extension.
Okay, you didn't. Don't beat yourself up. You filed prior years. This is just 2025, we're looking at.
This is this category. So you didn't file an extension and you owe, could be 10 grand, could be 100 grand. But what's gonna kick you in the can is this failure to file. Yeah.
Now that's 5% on top of that 1% I was talking about. Now it's 5% on top of that. They're they're they go hand in hand. Failure to file is 5% a month.
Failure to pay is the half a percent plus the interest on that. So now you got that 1% hanging over here plus the five. That's about approximately 6% a month adding up quick. So what's your solution?
File. Yes, file right away. Even if you owe, at least file. Yeah, you're like, well, I don't want to tell the IRS.
No, no, you already owe them. Yeah, who cares? They will get around to you whether you file or not. Yes.
So especially if you've got 1099s, W-2s, you got a business, you got reporting there, they're gonna be like, you got a business return you filer. I'm like, where is this? I know a lot of people think, well, I'm off the grid. They don't see this.
No, they they come around eventually. I mean, they're not the fastest, most sophisticated agency in the world, but they've got massive powers when they do get you in the crosshairs. Yeah, and I want to tell you again some of you are like, yeah, Mark, but I don't have all my info. I don't have all my 10s, my books are a mess.
Just guesstimate. File. You can always amend. There's no penalty to amend later.
And and and so just now you got to be close, and if anything, even estimate a little high. But file, you're not gonna be able to pay anyway. Who gives a rat's ass? Get it in there and get that, get the five percent penalty off the table as soon as possible.
In fact, if some of you are listening now, and it's still April, you're it's on you're just paying 5% for the month of April. And then if you get into May, it's another five. So just go file something before April 31st and get that one over with and know that you're gonna file a better return later. That's okay.
Okay. Let's let's transition now to where we said, all right, let's say you you filed an extension and you owe, and now it's April 15th. Or you filed and you owe, right? So so now you basically have an amount that you owe the IRS.
And we can loop the states in here too. There's some variances obviously between the states, but you owe taxes and the IRS knows it. And yep. So let's get to not file uh for several years all on its own.
Unless you want to try to tackle that before we dig into your options. Because I I think where we need to get here is is okay, guys, the the last day was up. There's no extension on the extension. I either filed an IO or October 15th hit, and now I still owe the IRS.
I don't have the money. Yeah, I and I actually want to I think we need to do a quick edit here because we did ex um no extension. Yeah. Sorry, sorry.
We did I file an extension and oh. That was the the best. Then we just talked about no extension. So we said file right away.
Yeah. Now let's say you filed and you owe. We're gonna start talking about some of these pain. Exactly.
Which is the same here. These two have the same, all these, frankly, eventually have the same track. They do. So maybe we hit this, because you just talked about this.
Maybe we and we are this already self-explains. You owe. Let's say all the scenarios we eventually get to you. Okay.
Um, okay, so no edits. I'm just gonna pick up where Matt just left off. Okay, I like that, Matt. Let's get to kind of the DEF CON one here.
Yeah but but I wanted to say this there is that third category of that you already filed and you owe, and you're listening today. The extension thing is irrelevant. You didn't need to file an extension because you filed. Uh, you didn't file an extension, who cares because you already filed.
So some of you there that you're like, hey guys, I filed and I owe. Well, you just get to that point. Okay, you know, well, your road is gonna be you're gonna be on the same path or road as the people that haven't filed for years. You just owe the IRS.
And what are your choices? Now, Matt, you're really good at summarizing this. I like it because you can there's some payment plan options. And the sooner you get engaged with the IRS on this, the better.
Yeah, and I think um once that amount is stated and the IRS has it, it's gonna take them a couple weeks and it might be up to a month, and then you're gonna get a letter in the mail saying, Hey, you need to send us money. And if you don't, you're gonna get tax liens, it's not gonna look good for you. And uh and the states might send you that letter in a few days. Yeah.
Yeah. Oh my gosh, we've got to we've got to add the state conversation here too. But I want to point out what where Matt just went. I like that you just said that.
The next thing that's gonna happen once you do file and you catch up those prior years or you did it for this year, whatever, that letter comes in the mail. Do not put it in the drawer. Yes, please, please, I beg of you. I'm almost emotional about that.
Do you know how many in my 25-year career, how many clients have shown up with a shoebox of letters, scared to death and in tears? And that didn't have to be like that. It really didn't. So the first thing I'm gonna say, you get that letter in the mail, let's open it and talk.
Gosh, that's what I just I yeah. The nice thing is, I mean, of this, I mean, we are in a really difficult spot, but in the IRS's eyes, you're in collections. And I mean, you need to realize that you are a collection, you're a problem on their list right now. So you want to get off the naughty list.
Literally here. I like the way you said that. Okay. How do I get off the naughty list?
The IRS gave you some easy ways. Oh, I give them a call. You could call them and wait on hold for a couple days. Okay.
Or you can just go online. Okay. Now you can request this stuff online. I've done both, actually.
I have not done a payment plan or anything like that. I've done this 180-day extension. I think this is the most common one, and this will buy you 180 days. That's half a year here, essentially, right?
Yeah, it's like six months. Yeah. Okay. So I'm like, I'm like, oh shoot.
Did I get that wrong? No, no, you nailed it. Okay. All right.
It's buying you six months of time. And if it's 100K or less, that there's no fee for this, you basically get off the naughty list. The IRS is like, you reached out to us, you said you're going to pay us, and this could be a lump sum. You can send it in chunks as you go, or you just wait until the 180s and send them the same amount or the full amount.
Now interest accrues. And the I didn't pay penalty. So it's that 1% a month, that 1% a month. And by the way, so you know, it goes up to 25% total.
Once it hits that, that is over, except for interest. But that that half a percent every month of penalty continues to chunk, chunk, chunk away until you finally pay the damn thing off. So, but I'd like, I want to repeat what Matt just said. If you owe less than 100 grand, you either call the IRS or go online and say, hey, hey, hey, hey, I filed.
Don't be too mad. I know I owe, but I need I need six months. Can you work with me, please? And if you and when you request that, it's like an automatic.
Yeah. It's not, and you're not filling out a financial statement and all this other stuff that you have to do on some other steps here, where you're showing the IRS that you're at your financial situation's too tight to send them all the money. You don't have the money. Like, you know, they're this is just they take your word for it.
They're like, You got six months, go figure it out. Okay. Now you're off the naughty list. Love it.
Now I want to digress again. First tip I just gave for a moment ago was do not put that letter in the drawer. Number two, you are going to get phone calls from scam artists like you will not believe. And companies that are trying to just maybe help you.
I do not know, but just you're when you owe the IRS, it becomes public record. I don't even know where if you get a federal tax lien filed. Well that's when it hits. Yeah.
And what what's going to happen too is when you owe the state, they unlock those that retin notice too. I I've had calls. And everybody gets a call. Everybody gets a call.
How they get them? They assume that you know, one out of 10 people owe the IRS. So I want to just say this the IRS will never call you. I want to repeat this again.
The IRS will never call you. Anybody calling, say, hey, where this is the IRS and we need a payment immediately, or we're going to come seize your home or whatever, they will do that, the scam artists. They will call you and go, hey, we understand you owe the IRS. We can help you.
And they're going to want to get paid. Please do not engage with these people. You don't know where they're at and what they could do with in bad ways. Just hang up.
Just do not yell at them. Do not, but just know the IRS is not going to call you. That's one of the biggest tips I want to make. You call the IRS.
The IRS will mail you. That's it. And if you engage with a practitioner, they can call a hotline to talk to the IRS on your behalf, not be on hold forever. That's it.
They will never call you. So be careful. Yeah. And so 180 days or sorry, 180 days, provide you some time, 100K or less.
You can do it online. It's free. If it's over 100K, you can still call in and probably get it. Um and you're committing again in a lump sum.
Okay. Now, what if I can't do it in 180 days? Well, this is where the payment plan process begins. Um sometimes they call it an installment agreement.
It's the old language. Yep. And I like I admitted earlier, I've been on an installment agreement before too. The only there's several caveats here.
You're only going to get the installment agreement if your filings are up to date. So you got to, you can't get on an installment agreement if You wait that those that six months and then another tax return is due and you haven't filed that one. You gotta file that one. Because see, let's say you wait till October and then you ask for six months and you don't get there.
Well, we're in the middle of 27 now, 2027. And you already the 26 returns due on April 15th. Yeah. So you're you're already file an extension then.
Well, you know what? I don't I think with an extension. If you're not going to go for an extension if you owe yeah, I wish see this Sarah Fallis, she's on our board of directors for Main Street Professionals. She is our IRS um compliance expert.
She is so good, but um, she's gonna hate me uh giving any advice at this juncture. But I will say, once you need to get on an installment agreement with the IRS, I am just gonna say it very, very directly. You need a practitioner's support. You need a help, you need help from a professional because this is where the IRS is gonna be already calling you, or not calling you, they're gonna be going hard.
You're gonna be getting letters, threats, liens. It's not gonna be pretty. Your six months, you know, naughty not on the naughty list is gone. You're back on the naughty list.
And uh, we've got professionals in our network, the Main Street Tax Pro Network. Ferrisal is one of the our superstars. I that's my opinion. I think you need to get help at this point because there's so many nuances.
There really are. Yeah, and um, and get someone good, you know, and I because that's where you'll get you you could be getting blown up with a bunch of people that are just trying to rip you off, frankly. And don't throw the 10, 20 grand to these places that frankly have no business being in the business, um, but they scare people into, you know, and they overpromise what they can truly deliver. But um, but let's say you're there, you've engaged a professional.
Um, maybe it's your accountant, maybe it's Farah, maybe it's uh this is what we don't do this. I really I'd say in our office. Like we're tax planning and we're looking forward. Can I just say, how do you not get here?
Be engaged in taxes. It's the number one expense you have as a successful business owner. You might have payroll as number one, and maybe that's paying yourself too, but the number two expense in a successful business is taxes. And so you've got to be like optimized for this.
And that's what we're helping clients do. We do a comprehensive tax and business consult. So you're using every strategy to minimize what you're gonna have to send the IRS in the first place. Yeah, and I and that's man, there's so many little off ramps here.
But I want to say don't wait to get a tax strategy plan in place for moving forward until this is resolved. Start both simultaneously. So engage with a compliance expert that can get you on the right installment agreement. Maybe you want to fight it.
Maybe you need to fight it. Maybe you have an innocent spouse provision, maybe uh it's under 50 grand, it's over 50 grand, it's over 100, it's under 100. There's all these little avenues that a professional that can negotiate with the IRS every day can help you with. Our job is on the other side of the table, is saying, okay, now let's never get here again.
And let's start a strategy plan for 2026 and moving forward. Do those together. Don't wait. Yeah, you need to play the whole game.
We're offense for you. We're helping you save and be proactive. This tax problem you've got in the rear view mirror from prior years, you're playing defense. Yeah, you're not scoring points, you're just hoping not to get scored on by more than more than those virus.
That was good. That was a good one. I like it. So um, do both because that's how you're gonna win the game.
Yep. All right. So let's talk about what this long-term installment agreement payment looks like, though. Okay.
This is in general, 72 months is what the IRS allows for. That's gonna give you five years. Yeah. So God might question my mouth.
That's six years, actually. Yeah, that's why. Okay. All right, okay.
Six years that you can pay this off. Now there is an application fee for this. Depending on the amount. It can be automatic.
That's true. And there is low-income waivers too, if you're in financial distress. But uh the here, the biggest piece of this, though, is you're filing a financial statement to the IRS. You have to open the kimono, so to speak.
You're telling them what you make, you're telling them what you have in bank accounts, equity in your home, investment accounts. You have to disclose all of your assets to the IRS. And if you have a bunch of assets on there that's not in something protected, like maybe equity in a home or retirement council, the IRS is gonna be like, sell that and pay us. Why are we putting on an installment agreement?
Yeah, it's it's and this is where the negotiator on your behalf can help you. Now let's digress here. Another off ramp. Watch out for that, oh, that sexy commercial at two in the morning when you're depressed.
We settled with the IRS. Pennies on the dollar. We will get your tax bill down to nothing. You can call us, we will help you out.
And you're like, you'll be tempted. You're gonna want to call them. And you go, holy crap, why am I doing an installment grant? Mark and matter idiots, I can settle for pennies on the dollar.
Please, please know that those are rare circumstances where you have to show the inability to pay. Yeah. So that little financial statement that you're having to file under oath, you better be dead broke and no foreseeable income in the future. That's when the IRS cuts these deals.
The people in the commercial are sitting by a swimming pool in Florida and look like they're living the high life. Uh, that may be five years later because the IRS is not gonna cut a deal with you on this offer and compromise, because that's only if they're like, you're a waste of time. Yeah. You know, I I did these in law school.
I did a low-income taxpayer clinic in locks in law school. Sorry, can we pause a second? Whatever you're clicking, there don't do that. Sorry.
I didn't hear it. I didn't know. Sorry. I got the OCD.
I didn't know this. So when I was in law school, I worked in the low-income taxpayer clinic, and then I did it at the bar association here in Arizona. I go volunteer. Well, that's where we met.
I went in to get some help. I was living in a van down by the river. Yeah, yeah, I remember that. So, but this is interesting when because I would do these offers and compromise.
I did them a little bit as a lawyer too in private practice. But um basically the strategy, and I learned this from my professor, uh, was when we would present that financial statement, we'd make our case, you would come up with a settlement amount, right? You would say, Okay, well, they owe 100, but but they can only afford to send in 10. But you always had to have an answer of where's this 10,000?
Yeah. You can't you do not even be like that 10,000's in their bank account because they can just go zap it. Yeah, yeah, like and you still. What'd you say?
You had 10 grand? No, you don't. Yeah, so it's always like 24 hours later. It was it was funny.
It's always like their mom is gonna loan them 10 grand to pay you IRS. And so, so basically what I'm trying to get here is you've really got to be in massive financial distress with no assets to get that quote unquote pennies on the dollar. Yeah. And the last point on this, too, is I've done many offers.
When you go make this offer, we've got, we'll pay you 10 grand. They'll say, give us all your financial statements. They're gonna do their homework and say, where's this 10 grand coming from? And by the way, buckle up.
It'll be about a year till you get your answer while penalties and interest continue to ratchet up. It's rolling the dice, people. And the IRS may come back and go, yeah, you've got a job, you could probably afford 25. We'll take payments.
Yeah. And there's no guarantee. Now, the better the expert you work with that can help you through this, but just I guess my message here is be careful of the pipe dream offering compromise. Be careful of the phone calls, be careful of the scam artists asking for money up front.
Go to our network, the Main Street Tax Pro Network. These are people that we have trained. We cannot guarantee they're perfect either, and they're not gonna be incompetent or competent. We can't do that.
But we do know they've been through our program, they've listened to Mark and Matt countless times, they've had to to be there, and they're going to weekly trainings or they wouldn't be on our network list. Still do your due diligence, but try to find someone there and then ask for some references. Find, find a professional that's gonna help you through. It's not gonna be a one and done one month that's over.
This is a process, and you need to work with someone that you can trust and be with and stand talking to. Yeah. And I think the my takeaway last point here is attack this. Like just like you do in any aspect of your business or any way you're trying to grow and build wealth, get focused on it and attack it.
This is gonna weigh you down. This is gonna weigh you down. But mentally, if you can get in the mindset of I'm attacking it, I'm making progress on this, it's not gonna happen overnight, but I'm gonna get the pieces moving, I'm gonna stay consistent on it, and this is gonna be history, ancient history for me. And then get engaged in your tax planning now and get things going on the right track.
It takes, it takes a little bit of transitionary point, but just get focused on it and like be like, I'm solving this. And it's it'll be a little empowering to just get that ball rolling. Yeah, you know, I and I'm gonna be very direct here. A lot of our little off-ramps here that we're talking about are the most important part of this podcast.
Not you can get an installment sale. That's not the point. The point is managing your mind and your family and your emotions. And I'm gonna say this too, another little side note.
We've had so many clients that are like, well, the last thing I'm gonna do is keep making money then. I'm not gonna build my business. I'm not gonna work harder because the IRS is just gonna take it. So I'm gonna be broke until the IRS finally lifts me out from under their thumb.
Then I'll go make money. People, that no, not a good plan. The more productive you can be with your head up, looking to the future, making money, trying to be productive, is gonna help you get out of this debt sooner than trying to cut a deal and be broke. I mean, how I don't know how to say it in.
Amen. I mean, um, and I I think, you know, for we know you're the main street business owner, the typical person listening to this podcast, you're an entrepreneur. You get excited about solving problems and taking charge on things. You need to do that here with your tax situation.
I know the IRS sucks. No one likes paying their taxes. No one likes being behind on something like that, being in a collection process where the power is totally on the federal government side. We get it, it sucks.
But be the solution, take action on it, get going on it, and um, and also get a strategy and plan of how you can can pay as little as legally possible when you file that next return. And that's where we can help at our law firm KTO Slurs. Yeah, and one last point. If you want my silver bullet, and this is typically gonna be the most common solution when you owe the IRS, and where I would encourage you to focus, I'm gonna give you three three steps.
One, be proactive and deal with it. Number two, keep making money and get a tax plan moving forward so you don't get in this problem again. And number three, you're gonna go borrow from someone. That's it.
I really you would do better off promising your mom, your dad, your brother, a business associate, a friend, someone. Because the sooner you can stop these penalties and interest with the IRS and get on a payment plan with a person, not the IRS, and not showing your opening your kimona to the IRS and everything you've got, because they'll start hitting accounts. They'll start leaning stuff. If you've got any equity at all in a home or an asset, go offer that to a friend or family member and say, I will give you all the equity in my home as a backup.
Please loan me the money to take care of the IRS and get on a five or 10-year payment plan with them and then go out and make some money and get a good plan. Yep. Love it. Well, thanks everybody.
If you're in the situation, we understand it's painful. Hopefully, hopefully, some of these thoughts and ideas can be helpful to you to start taking action and start attacking this problem. And make sure you're subscribed to the channel, the podcast, give it a thumbs up, five stars, kudos, whatever. Like it, share it.
We'd love to see you here next time. Thanks for joining us. Thank you. All right, I gotta roll off.
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