IRS Tax Relief for Real Estate Agents Help That Works Between Closings.
Updated
Your income comes in lumps: three closings in one month, then nothing for ten weeks. Nobody withholds a dollar from a commission check, so a strong year can leave a tax bill you can't cover once the market slows. We deal with the IRS for you, ideally before it ever reaches your commissions or your closings.
Statutory nonemployee
How the IRS treats most licensed agents paid by the sale. No tax comes out of a single commission.
How it happens
Why Real Estate Agents End Up Owing the IRS
To the IRS, most agents are running their own business. A licensed agent paid by the sale under a written contract is a statutory nonemployee, treated as self-employed for all federal tax purposes. So the brokerage takes its split and hands you the rest whole. Income tax and self-employment tax are yours to send in.
That works fine in a steady market, and real estate is rarely steady. A spring with six closings feels like money in the bank, and the quarterly estimates due June 15 and September 15 get pushed to "after the next deal." Then the deals slow down, and April brings a bill sized to the good year.
After that, the IRS letters get harder to open. A lot of agents put off the next return because they already know what it will say. That's how one tough year turns into two or three, with penalties and interest growing on every one of them.
IRS problems
The IRS Problems Real Estate Agents Bring Us
Most of them trace back to one strong year with nothing set aside, followed by a slower one. These are the IRS problems that come with commission income.
Back Taxes From a Big Year
Several closings with no estimates paid turn into one balance due in April, often right as the market cools. We work it into a payment plan or another IRS program sized to the income you actually have now.
See how we helpLevies on Commissions at Your Brokerage
The IRS can serve a levy on your brokerage for the commissions it owes you. Under Treasury regulations, a levy on commissions keeps attaching to each new one until it's released. With Power of Attorney filed, we request that release.
See how we helpFederal Tax Liens on Your Own Home
A Notice of Federal Tax Lien is public and attaches to everything you own, including your house and what you acquire later. We look at discharge, subordination or withdrawal for the property you need to sell or refinance. The IRS decides.
See how we helpUnfiled Years After a Rough Stretch
When a return goes unfiled, the IRS can file a substitute from your 1099s with none of your desk fees, MLS dues, marketing or mileage counted. We file the real returns so the IRS works from accurate numbers.
See how we helpAudits of Car, Home Office and Marketing Costs
The miles between showings, a home office, signs and listing photos all need records behind them if the IRS asks. We handle the audit and the document requests so you're not walking an examiner through your calendar.
See how we helpPenalties and Interest Stacking Up
Failure-to-file and failure-to-pay penalties can come off with first-time relief or reasonable cause. Taking them off shrinks the balance that interest keeps growing on.
See how we help
Your home and your sales
Selling or Refinancing With a Federal Tax Lien
You know better than anyone that a title search finds everything. A Notice of Federal Tax Lien is a public document, and the lien attaches to all your property, including your own house and anything you acquire later. Paying in full is the cleanest fix, and the IRS releases the lien within 30 days after that.
When full payment isn't possible, there are other tools. A certificate of discharge (Publication 783) removes the lien from one property so it can sell, often with the IRS paid its share from the proceeds. A certificate of subordination (Publication 784) lets a new lender go ahead of the IRS on a refinance.
45 days
How far ahead of the closing the IRS asks for a discharge or subordination application.
30 days
How soon after the debt is paid in full the IRS says it releases the lien.
A judge
A federal judge or magistrate has to approve in writing before the IRS can levy your principal residence.
Sources: IRS: Understanding a federal tax lien · IRS Publication 783 · IRS Publication 784 · 26 U.S.C. § 6334
Your commissions
When the IRS Levies Your Commissions at the Brokerage
Once a Final Notice of Intent to Levy has run its 30 days, the IRS can send a levy straight to your brokerage. Its levy forms cover wages, salary, fees, bonuses and commissions. From then on, the brokerage has to pay your side of each closing to the IRS instead of to you.
This kind of levy doesn't stop after one check. Under Treasury Regulation 301.6331-1, a levy on salary or wages is continuous, and the regulation counts fees and commissions as salary or wages. It reaches commissions earned but not yet paid, and ones that become payable later, until the IRS releases it.
What we do: file Power of Attorney so the IRS deals with us, pull your transcripts, get any missing returns filed, and request a release tied to a payment plan or another program. Section 6343 requires a release when you enter an installment agreement, unless the agreement says otherwise, or when the levy is causing economic hardship. The IRS decides whether those apply.
How a commission levy moves
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Final Notice of Intent to Levy
You have 30 days to request a Collection Due Process hearing.
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The IRS Serves Your Brokerage
A notice of levy on the commissions it owes you.
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Your Commissions Go to the IRS
Closing after closing, until the levy is released.
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We File Power of Attorney
The IRS starts dealing with us instead of you.
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We Request a Release
Tied to a payment plan or another program. The IRS decides.
Discreet help
You Don't Have to Explain How It Happened
Agents tell us the hardest part isn't the balance. It's the thought of a broker, a teammate or a past client finding out. Your name is your business, so that worry makes sense. Owing the IRS after a strong year and a slow one happens to plenty of agents, and it's nothing we judge.
Your consultation is free and confidential. Once you hire us and Power of Attorney is on file, the IRS deals with us, so the calls and the back-and-forth stop landing on you.
How We Keep It Discreet
- A free, confidential first conversation
- No judgment about how it happened
- Once Power of Attorney is filed, the IRS contacts us
- Phone, secure document portal, and video, with no office visit
How it works
How We Work an Agent's IRS Case
No office visits and no calls in the middle of a showing. We work by phone, secure document portal and video, on your schedule.
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Free Consultation
A representative calls you back, listens to what is going on, and tells you whether we can help.
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Power of Attorney
We file Form 2848 so the IRS contacts us instead of you.
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Transcripts and Returns
We pull your IRS transcripts and get any missing returns filed.
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Request to the IRS
We submit the program request on your behalf. The IRS reviews and decides.
Timelines and outcomes are determined by the IRS based on the facts of each case. Results vary and are not guaranteed.
IRS programs
IRS Programs That Fit Commission Income
Installment Agreement
Monthly payments based on your real cash flow. The IRS can't make a new levy while the request is pending or the plan is in effect, and a direct debit plan on $25,000 or less can open the door to withdrawing the lien notice.
Offer in Compromise
Settles for less when your income, expenses and equity say you can't pay in full. When income swings, the IRS may average your last three years instead of using the slow one, so we run that math before you apply.
Lien Discharge and Subordination
A discharge frees one property from the lien so a sale can close, and a subordination lets a lender go ahead of the IRS on a refinance. Both are applications the IRS approves or denies.
Penalty Abatement
First-time relief or reasonable cause can take failure-to-file and failure-to-pay penalties off, which shrinks what you owe.
Where we help
We Help Real Estate Agents in All 50 States
IRS representation is federal, so it doesn't matter where you're licensed or where your listings are. These pages cover what we see in some of the housing markets where we work with agents.
Frequently asked
Real Estate Agents and the IRS: Common Questions
Can the IRS Levy My Commission Checks at the Brokerage?
Can I Sell My House If I Have a Federal Tax Lien?
Can the IRS Take My House?
Will My Broker or Clients Find Out I Owe the IRS?
Can I Get an Offer in Compromise If the Market Slowed Down?
I Had a Great Year and Paid No Estimates. What Now?
Can the IRS Take Money From My Business Bank Account?
How Much Does IRS Tax Relief Cost?
Verified review · Google
Coy James, is a professional and extremely knowledgeable Tax Settlement Officer. I highly recommend Coy to handle all of your tax matters. I was very pleased with how he handled mine. Very relieved and Happy
ITR helped me with my taxes during these hard times. They also made me feel very comfortable during the whole process. I 100% recommend.
I called INNOVATIVE TAX RELIEF and spoke with OZZIE . I am so relieved I was nervous at first because I owed the IRS a lot of money received a letter in mail they were able to help me set up a payment plan that I can comfortably afford thank you OZZIE AND INNOVATIVE TAX RELIEF I WOULD TOTALLY RECOMMEND
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