What to Do If You Owe Over $100,000 in Back Taxes

Introduction: Owing Over $100,000 Isn’t Hopeless — But You Can’t Ignore It

If you’ve received notices from the IRS or California Franchise Tax Board (FTB) and your total back tax balance has grown to over $100,000 — you’re not alone.

But at this level, you’re now in a special enforcement category — and the response must be strategic. This guide explains what to do if you owe six figures in tax debt, how high-debt cases are handled, and how Orange County taxpayers can manage or settle large IRS tax debts without losing everything.

🚨 Why $100,000+ Matters to the IRS and FTB

When your tax debt crosses six figures:

• You’re flagged for revenue officer assignment
• You may be referred to IRS Field Collection or FTB Legal
• You’re more likely to face:
• Wage and bank levies
• Federal or state tax liens
• Passport restrictions (IRS only)
• Business suspension (FTB)
• Potential litigation for collection

✅ Step-by-Step: What to Do If You Owe $100,000+

✅ 1. Stop Ignoring the Notices

At this point, collection letters (CP14, CP504, LT11, Letter 1058, etc.) are serious. If you're seeing:

• “Intent to Levy”
• “Notice of State Tax Lien”
• “Proposed Assessment”

...you’re already in enforcement territory and may still have time to reduce large IRS tax debts through settlement before the IRS escalates.

👉 IRS Letter 1058 – Final Notice of Intent to Levy

✅ 2. Request IRS and FTB Transcripts

Your CPA should pull:

• IRS Account Transcripts (wage/income, balances, history)
• FTB Account Summary and Balance Letters

This will show:

• What’s owed
• What’s collectible
• What’s still within the statute of limitations
• Where penalty and interest are compounding — and whether you can cut penalties to lower total debt.

✅ 3. Get Compliant With All Filings

Both the IRS and FTB will not negotiate until all required returns are filed.

Your CPA can:

• Request wage & income transcripts
• Reconstruct missing years
• File corrected returns to reduce inflated substitute assessments

✅ 4. Know Your Resolution Options

If you can’t pay in full, you might spread large balances over time with an Installment Agreement or qualify for an Offer in Compromise.

👉 FTB Offer in Compromise vs Installment Agreement

✅ 5. Avoid These Common Mistakes

• ❌ Don’t make small “good faith” payments without a plan
• ❌ Don’t ignore wage garnishments
• ❌ Don’t sign up with high-pressure tax relief firms
• ❌ Don’t hide assets — this can escalate to civil or criminal issues

🧠 Can You Still Qualify for an Offer in Compromise?

Yes — but the IRS will closely scrutinize your finances.

If you:

• Have limited assets or equity
• Can show negative cash flow
• Have no luxury spending or asset transfers

…then you may qualify to settle for a fraction of what you owe, or even pause enforcement on large debts due to hardship until your situation improves.

👉 How Much Will the IRS Usually Settle For?

📊 Large Case IRS Thresholds

When your debt is over $100,000:

• You’re flagged for Field Collection
• You may deal with a Revenue Officer (not just Automated Collections)
• IRS may file a lien automatically
• Passport restrictions can apply if the debt exceeds $62,000 (adjusted for inflation)

🧭 How Boulanger CPA Helps Six-Figure Taxpayers

We help clients in Irvine, Anaheim, Santa Ana, Fullerton, and across California:

• Reconstruct tax years
• File missing or amended returns
• Submit Offers in Compromise or payment plans
• Respond to IRS and FTB enforcement
• Represent you directly with Revenue Officers
• Create long-term resolution strategies

📞 Call 657-218-5700
🌐 www.orangecounty.cpa

📣 About the Author

Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.

He is the author of Defend What’s Yours: A California Taxpayer’s Guide to Beating the IRS and FTB at Their Own Game, available now on Amazon. The book offers a step-by-step plan for resolving IRS and FTB tax debt without losing your business, your home, or your peace of mind.

With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.

Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.

Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.

📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.