Settling Tax Debt When C.D.’s husband passed away in 2025, she was left grieving and carrying more than $164,000 in joint federal tax debt tied to his dental practice. C.D. works as a home health aide and had no involvement in the business or means to pay the debt. The LITC filed an Offer in Compromise on her behalf, making the case for what she could realistically afford. The IRS accepted the offer, settling the $164,000 debt for $3,700. After years of tax liability she did not incur herself, C.D. can finally move forward.
Eliminating Tax Liability A.I. learned that a former employer had falsely reported nearly $200,000 in income under his Social Security number, even though A.I. had earned only about $12,000. Unable to resolve the discrepancy on his own, he turned to the LITC for help. The LITC investigated the matter, filed an Identity Theft Affidavit with the IRS, and worked with the Taxpayer Advocate Service to expedite processing of the claim. The investigation also uncovered evidence of the employer’s prior fraudulent practices. The IRS ultimately accepted the claim, removed the fraudulent income, and eliminated $113,000 in tax liability
Saving on Income Tax K.A., a taxi medallion owner who saw his income plummet in recent years, could not pay his medallion loan. Thankfully, the lender canceled about $348,000 of K.A.’s loan to bring the loan balance more in line with the medallion’s $150,000 value. K.A.’s tax preparer included the full $348,000–Cancellation of Debt (COD) income–in his taxable income, leaving him with a liability of over $105,000. After conducting an insolvency evaluation and evaluating his assets and liabilities, however, the LITC determined that K.A. should have reported only about $4,400 in COD income, resulting in a tax liability of no more than $500. The amended tax return saved K.A. over $104,500 in total income taxes.