IRS Tax Resolution Gone Wrong: What One Client Did That Cost $100,000

When people think about IRS tax relief, they usually jump to terms like Offer in Compromise or the IRS Fresh Start Program. While those programs get all the buzz, there are plenty of other—and often simpler—ways to save big money during a tax resolution case.

Unfortunately, many people don’t find that out until it’s too late.

As a seasoned tax resolution specialist, I’ve seen countless situations where someone tried to handle their IRS issue themselves or hired the cheapest help they could find—only to later call us in to clean up the mess. Here’s a real-life example of just how costly that decision can be.

The $100K Mistake: A Real Client Story

A client came to me with over $200,000 in IRS tax liability. He was proud of the fact that he had “saved money” by starting the resolution process on his own. He had even called the IRS himself to find out what needed to be done.

That initial call with the IRS? In the industry, we call it a compliance check—something our team always does as the first step. During this call, we confirm balances due, missing returns, collection statute expiration dates, and other key data that forms the foundation of any successful resolution strategy.

The IRS told him he hadn’t filed in 10 years. So, he took them at their word and immediately searched for the cheapest tax preparer he could find.

Since the standard online tax software doesn’t go back that far, he found someone “local” and sent over all his documents. They charged him full price to prepare 10 years’ worth of returns, asked no questions, and filed everything—no pushback, no strategy, just raw data entry.

What Went Wrong?

Here’s the problem: the client asked the IRS, “When did I last file?”
But he didn’t ask the right question: “What years do I actually need to file?”

Those are two completely different things.

Because of that misunderstanding, he ended up filing four years of tax returns that were no longer required. And each of those years resulted in balances due—adding up to over $100,000 in unnecessary liability, not to mention the penalties and interest that came with it.

So instead of saving money, he created an additional $100,000 tax liability that didn’t need to exist.

“I Thought This Was The Hard Part…”

After all 10 returns were filed and assessed, he hired me to “handle the rest,” thinking this is where I could save him money. But we still had to do the compliance check anyway, meaning the $500 he thought he saved on that initial call was actually wasted time.

In the end, his DIY approach and his eagerness to save a few hundred dollars cost him:

• 4 unnecessary years of tax filings and the fee for preparation
• Over $100,000 in additional IRS liability
• Time and the opportunity cost that went with it
• And—importantly—opened those years up to IRS audits, because the statute of limitations begins when a return is filed so now IRS has more time to dig in.

Had he come to us first, we would’ve reviewed his IRS record, confirmed exactly which years needed to be filed and forced the IRS to close out the other years, preventing half of the liability altogether and with fewer headaches.

Lessons Learned: How a Tax Professional Saves You Money

When clients come to us, we don’t just follow a checklist—we use experience and strategy to minimize IRS exposure, avoid unnecessary filings, and protect you from future problems.

Here’s what we do differently:

1. We start with a proper IRS compliance check, asking the right questions and analyzing transcripts—not just taking IRS agents at face value. Not all resolution companies do this.
2. We never blindly prepare returns. If you don’t need to file them, we don’t file them. We work with the IRS to close out remove requirements that their system may still be showing.
3. We bundle tax preparation into resolution strategy, so clients often pay less per return than they would through standalone preparers.
4. We protect your audit window by not unnecessarily filing old returns that were otherwise off the IRS radar.

So, Is It Worth Paying for Professional Help?

I get it—our fees aren’t the lowest. But compared to the six-figure cost of doing it wrong, working with a seasoned tax professional isn’t expensive—it’s an investment that often saves clients thousands (sometimes hundreds of thousands).

And beyond the numbers, we understand that our clients aren’t just trying to get compliant—they’re trying to get their life back.

Whether it’s qualifying for a mortgage, starting a business, or just sleeping at night without IRS letters showing up—it starts with having the right person in your corner.

Final Takeaway: IRS Resolution Is About Strategy—Not Just Filing

If you’re behind on taxes, resist the urge to file blindly or take IRS advice at face value. What they tell you might be technically true, but it won’t always be in your best interest.

If you’re considering resolving IRS debt, the best first step is to talk to someone who works for you—not the IRS. We offer free consultations that typically run 30–40 minutes, and our only goal is to figure out the best path forward for your specific situation.

Need help with IRS tax problems or unfiled returns?
We can help you avoid unnecessary costs and get back on track—without the mistakes.

📞 Contact us today for your free consultation.