Most people who reach out to me start the conversation the same way. They say something like, “I know this is bad, but…” and then they tell me about a letter from the IRS or the Franchise Tax Board that’s been sitting on top of the fridge for three weeks.
I’m Izella Lui, a licensed Enrolled Agent, and I work on my own out of Daly City. No team, no call center, no one reading from a script. When you get in touch, you get me. And the first thing I usually tell people is this: being behind on taxes is a lot more common than it feels, and the list of possible options is usually longer than they expected.
That doesn’t mean every option fits every person. It means it’s worth finding out which ones fit you. That’s what this post is about, and it’s the heart of what back tax relief Daly City CA residents come to me for.
Key Takeaways (From Me to You)
If we were chatting over the fence on a foggy Saturday morning, here’s what I’d want you to walk away with:
- You’re in good company. Plenty of hardworking folks on your street have had an IRS envelope in a drawer at some point. Falling behind doesn’t make you careless. It usually means life got busy or hard.
- Open the letter. I know it’s the hardest part. But the date on that letter matters, and the sooner we look at it, the more choices you usually still have.
- File, even if you can’t pay. It keeps the penalties smaller and keeps more doors open.
- The best option is the one you can keep up with. A fancy-sounding program means nothing if the monthly payment doesn’t fit your real life here in Daly City.
- You should know who’s reading your file. With me, it’s always me. That’s how I’ve chosen to work, and it’s how I stay true to the people who trust me with something this personal.
Why “More Options Than You Think” Isn’t Just a Nice Line
When people picture back taxes, they tend to imagine two outcomes: pay every cent right now, or lose the house. Real life almost never looks like either one.
The IRS and the California Franchise Tax Board (FTB) both have a range of programs built for regular people who fell behind. Some are well known. Others are quieter, and people don’t hear about them unless someone who works with these agencies every day walks them through it.
I’ve had a retired Serramonte homeowner assume her only choice was to drain her IRA. I’ve had a contractor from Westlake think he had to wait until he had the full amount saved before calling anyone. In both cases, once we pulled their records and looked at the actual numbers, there were paths neither of them knew existed.
I won’t promise you’ll have the same result. What I can tell you is that you won’t know until someone looks.
Five Options Daly City Residents Often Don’t Know About
Here are the ones I explain most often. Each has its own eligibility rules, and I always review your file before telling you whether one realistically applies.
1. A short-term payment window
If you can pay the full balance but just need a little time, the IRS offers a short-term payment plan of up to 180 days. There’s no setup fee for it, though interest and penalties keep adding up until the balance is paid. For someone waiting on a bonus, a property sale, or a slow season to pick back up, this can be a practical, low-stress path.
2. A monthly payment plan you can actually afford
If you owe more than you can pay within six months, a longer-term installment agreement may be available. For many individuals who owe $50,000 or less in combined tax, penalties, and interest, the IRS has a simplified process that doesn’t require a full financial statement. You can read the IRS’s own overview of payment plans.
Where I earn my keep is making sure the monthly number is realistic. A payment that looks fine on paper can fall apart once you account for San Mateo County rent, PG&E bills, and a commute down 280. I’d rather set up a plan you can keep than one that fails in four months and sends you right back to a CP523 notice.
3. Penalty relief, including first-time abatement
This is the one that surprises people most. If you have a clean history for the three years before the tax year in question, meaning you filed on time and didn’t have penalties, you may qualify for what the IRS calls first-time abatement. It can remove certain failure-to-file and failure-to-pay penalties. It doesn’t touch the underlying tax, and interest on those penalties is only reduced along with them, but on an older balance the penalties can add up to a real chunk of money.
There’s also “reasonable cause” relief for people who fell behind because of a serious illness, a death in the family, a natural disaster, or something else outside their control. The IRS explains the categories on its penalty relief page. The key is documentation, and that’s something I help people pull together carefully.
4. A pause in collection when money is tight
If your income only covers basic living expenses, you may qualify for what the IRS calls Currently Not Collectible status. That means the IRS agrees to temporarily hold off on active collection while your situation is tight. Interest still adds up, and the IRS reviews your finances periodically, but for a household in real hardship it can offer breathing room.
This one is especially relevant in the Bay Area. The IRS uses national and local living-expense standards, and our local numbers are higher than most of the country. Making sure your actual costs are reflected correctly matters a lot here.
5. An Offer in Compromise, for the right situation
You’ve probably seen ads about this one. An Offer in Compromise lets certain taxpayers propose paying less than the full balance, based on a formula that looks at income, expenses, assets, and future earning potential. It’s a legitimate program, but it isn’t a fit for most people, and the IRS reviews these applications closely.
I’ll be honest with you if I don’t think you’re a good candidate. I’d rather tell you that up front than take a fee for an application that isn’t likely to be accepted. Sometimes a well-built payment plan or a hardship review is the more sensible path, and I’ll say so.
Don’t Forget the State: California FTB Has Its Own Process
A lot of Daly City residents are surprised to learn they’re dealing with two separate agencies. The IRS handles federal taxes. The FTB handles California income taxes. They don’t share payment plans, they don’t coordinate deadlines, and a deal with one doesn’t carry over to the other.
The good news is the FTB also offers installment agreements. Individuals who owe $25,000 or less and can pay within about five years can often request one online. You can see the FTB’s details on their payment plans page. The FTB can also move quickly on wage withholding orders and bank levies once a balance sits unaddressed, so I like to look at the state side early, not as an afterthought.
When I review a new client’s situation, I look at both agencies together. It’s much easier to plan your monthly budget when you know what both payments will be, instead of setting up one plan and getting blindsided by the other.
The Mistake That Costs People the Most
If I could get one message across to my neighbors in Daly City, it would be this: file your return, even if you can’t pay.
Here’s why. The IRS penalty for not filing is generally 5% of the unpaid tax for each month the return is late, up to 25%. The penalty for filing on time but not paying is much smaller, generally 0.5% per month. So just getting the return in can make a noticeable difference in how fast the balance grows.
Not filing also takes options off the table. Most of the programs I described above require you to be current on your filings. And if you go long enough without filing, the IRS can prepare a return for you, one that usually doesn’t include your deductions or credits, and that can eventually lead to a lien. I wrote more about how an unfiled tax return can lead to an IRS lien if you’d like the full picture.
I’ve put together a longer list of common mistakes with IRS back taxes too, but unfiled returns are at the top of it for a reason.
What I Actually Do When You Reach Out
I want you to know exactly what to expect, because I think the unknown is part of what keeps people from calling.
First, we talk. A no-cost, no-pressure conversation. You tell me what letters you’ve received and what’s going on in your life. I ask about your income, your household, and your filing history. There’s no judgment here. I’ve heard it all, and most of it sounds a lot like what you’re about to tell me.
Second, I pull your records. With your written authorization, I request your IRS account transcripts so we’re working from facts instead of guesses. If the FTB is involved, I look at that account too. People are often surprised by what’s in their file. Sometimes things are better than they feared. Sometimes there’s a missing year we need to handle first.
Third, I lay out your options honestly. I walk you through which programs you may qualify for, what each one involves, how long it may take, and what it would cost you. If the best path is a simple payment plan you could set up yourself through your IRS Online Account, I’ll tell you that, even though it means less work for me.
Fourth, if we move forward, I handle it. As an Enrolled Agent, I’m authorized to represent you before the IRS. That means I can talk to them on your behalf, submit paperwork, and follow up, so you’re not the one sitting on hold. And I keep you updated along the way, in plain English.
Because I work alone, I keep my caseload small on purpose. Your file doesn’t get handed from one person to the next. The person you meet on day one is the same person answering your questions six months later.
Why I Keep My Practice Local
I work with people in Daly City, the rest of San Mateo County, San Francisco, and Alameda. That’s a deliberate choice.
When you tell me your rent went up again, or that your commute from Daly City BART to downtown eats an hour each way, or that a medical bill wiped out what you’d set aside for April, I understand it. I live in this same economy. That matters when we’re building a payment plan or a hardship request, because the numbers have to be accurate and backed up, and national averages simply don’t match what life costs on the Peninsula.
If you want more background, I’ve also written about back tax relief options in San Mateo County, IRS collection actions for business owners, and what families can do about a tax balance left behind after a loved one passes.
Frequently Asked Questions
I only owe a few thousand dollars. Is it worth calling? Yes. Smaller balances often have the simplest options, like a short-term plan or penalty relief, and it’s a lot easier to handle them before interest and penalties grow.
Can I apply for these programs myself? Many of them, yes. Some payment plans can be set up online through the IRS or FTB. Where I tend to help most is figuring out which option actually fits, making sure your numbers hold up, and handling the back-and-forth when things are more complicated.
Will the IRS take my house? I understand the worry, and it’s one of the first questions I hear. Seizing a primary residence is rare and involves a long legal process with several notices along the way. That said, liens and levies on wages or bank accounts do happen, so it’s wise not to wait.
What if I owe both the IRS and the FTB? That’s very common in California. I look at both accounts together so we can plan payments that fit your budget as a whole.
Can you tell me upfront what I’ll end up paying? No, and I’d be cautious of anyone who does before looking at your records. What I can give you is an honest, document-based review of the options you may qualify for.
Do you only work with Daly City residents? Daly City is home base, but I work throughout San Mateo County, San Francisco, and Alameda.
