I recently worked with a couple who reminded me how challenging dealing with the IRS can be, even for high-income earners. On paper, the couple seemed to have everything under control. The husband earned a significant salary and over time the couple was able to buy a nice home and save up a good sum of money. But when they came to me, they were overwhelmed by a tax debt that had grown beyond what they could manage comfortably.
It wasn’t that the couple couldn’t or wouldn’t pay. The problem was cash-flow. They were trying to keep on top of competing priorities. Between vehicle loans, student loans for the husband and their children, and everyday living expenses, they were spending money as fast as it came in. Now add on top of that dealing with significant unpaid taxes. They were understandably stressed.
The Unique Challenges They Faced
What stood out to me was how specific their challenges were to high-income earners:
The Pressure of IRS Financial Disclosures: With their tax debt exceeding $250,000, the IRS generally requires detailed financial information. They were understandably reluctant to open their entire financial life to scrutiny.
A Tangle of Expenses: Their lifestyle came with significant obligations, from multiple vehicle loans to student debt and even medical bills. The IRS doesn’t always view those expenses as “necessary,” meaning the IRS would not count them when determining the couple’s ability to pay back their taxes, which added another layer of complexity.
Balancing Immediate and Long-Term Goals: They wanted to resolve their tax issues, but they also needed to protect their assets and maintain financial stability for their family. Given enough time, the couple could find ways to liquidate assets, earn more money, or reduce expenses to make significant additional payments. They just couldn’t do it right now.
Their situation was complicated, but I knew we could find a solution.
How We Found a Way Forward
For me, this case was all about crafting a plan that worked for them, not just meeting IRS requirements. Here’s what we did: I negotiated directly with the IRS to set up a manageable installment agreement. After a few conversations, the IRS agreed to monthly payments of $6,650. I was able to convince the IRS agent to set up the payment plan without the usual financial disclosures.
This saved the clients from having their financial lives scrutinized as well as keeping the IRS off their backs while working toward resolution.
Now, the couple needs to make sure they are current on their tax filings and payments to avoid a new tax liability. A new tax debt will default their agreement, and we will have to start all over again (and likely the IRS will demand financial information).
I also advised the couple to review their spending. If they can cut back on unnecessary spending they can ensure they make their monthly payment and potentially have enough leftover to make additional payments to more quickly pay off their taxes to Uncle Sam.
A Personal Takeaway
This case reminded me why I love what I do. High-income earners like this couple often feel stuck—not because they don’t have the means to solve their problems, but because the solutions aren’t always obvious. Their financial situations are more complex, and the stakes are higher.
For me, it’s about more than just numbers. It’s about understanding my clients’ challenges, offering solutions that fit their lives, and being in their corner when they need it most.
If you’re a high-income earner struggling with tax debt, know that there’s a way forward. CONTACT US today so we can start working together to find your way into a future without tax debt.
