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 avoid levies, liens, and asset seizures — and still resolve their tax situation without losing everything.
π¨ 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
β Step-by-Step: What to Do If You Owe $100,000+
β 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.
π IRS Letter 1058 – Final Notice of Intent to Levy
β 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
β 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
β 4. Know Your Resolution Options
| Option | When to Use |
|---|---|
| Installment Agreement | If you can afford full monthly payments |
| Partial Pay Agreement | If you can pay something, but not the full debt |
| Offer in Compromise | If you can’t pay and qualify for settlement |
| Currently Not Collectible (IRS) | If paying would cause hardship |
| FTB Hardship Deferral | Similar to CNC for California |
| Penalty Abatement | If you qualify for first-time or reasonable cause relief |
π FTB Offer in Compromise vs Installment Agreement
β 5. Avoid These Common Mistakes
- β Don’t make small “good faith” payments without a plan
- β Don’t ignore wage garnishments
- β Don’t sign up with high-pressure tax relief firms
- β Don’t hide assets — this can escalate to civil or criminal issues
π§ 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.
π How Much Will the IRS Usually Settle For?
π 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)
π§ 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
π Call
657-218-5700
π
www.orangecounty.cpa
Frequently Asked Questions
What happens if I owe more than $100,000 to the IRS?
You’re flagged for advanced enforcement — including liens, garnishments, and passport restrictions.
Can I still settle my tax debt if itβs over six figures?
Yes — if you qualify for an Offer in Compromise or financial hardship program.
Will the IRS take my house or bank account?
They may levy bank accounts if you don’t respond. Real estate seizure is rare but possible in egregious cases.
Can a CPA help with large tax debts?
Absolutely. A CPA can represent you with the IRS or FTB, develop a resolution plan, and prevent forced collections.
ο»Ώπ£ 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.
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 is recognized for delivering results—not call center promises. Every case is handled with discretion, strategy, and high-level representation.
π Learn more at www.orangecounty.cpa or call (657) 218-5700.
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