Tips to Set Things Right with the IRS
- May 25, 2021
- / MC Tax Relief
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You know what the deal is with death and taxes. You can't get away from any of them. Life may seem hopeless when you owe a large tax bill and are unable to pay it. According to the IRS data book, there were more than 14 million open tax-debt cases against individuals and companies in 2018, despite the fact that the amount of tax liens filed by the IRS against taxpayers has decreased by more than half since 2010.
Despite one of the longest economic expansions in history over the last decade, millions of Americans are still experiencing trouble paying their taxes.
However, if you're in the same boat, it's not the end of the world. You should act now and consider IRS tax problem solvers to reduce the effect of unpaid taxes on your life, credit, and financial situation. Here some helpful tips to lessen that burden.
Please don’t ignore the problem :
The IRS will not. Even if you cannot pay what you owe, file your return on time, and in case it’s not possible, file for an extension at least. Keep in mind that the late filing penalty is 5% of the tax owed per month which can go up to a maximum of 25% of the balance.
In addition, there is an underpayment penalty of 0.5% to 1% per month of the balance owed, which can go up to 25%. Your tax debt will grow rapidly if you do not file your return or make any payment on your obligation. You may consider taking help from IRS tax problem solvers to get immediate help.
Be realistic about your situation :
You should note that it is very rare for the IRS to forgive tax debts. To settle your tax liability for less than what you owe, form 656 is the application for an “offer in compromise”. However, such deals are only offered to people going through true financial suffering. You may qualify if you or your family have had tragic healthcare expenses or you lost your job and have poor prospects for making income in the future.
Owe less than $10,000? Handle it yourself :
How much do you owe? You are probably capable of handling the matter yourself rather than paying someone to help you deal with the IRS if the balance is less than $10,000. You can file form 9465 online, the IRS application for an installment payment plan.
For any taxpayer owing less than $10,000, the service will immediately consent to such a contract. Usually, the plans allow you to pay off the balance owed, plus penalties and interest, over the course of 36 months.
Owe $10,000-plus ? Hire an attorney :
Consider hiring a tax attorney to negotiate with the IRS if you owe more than $10,000. Payment arrangements vary, and an experienced lawyer will assist you in negotiating better terms. They will also assist you in avoiding the imposition of a tax lien, which would damage your credit.
However, be cautious about who you hire. Consumers are frequently warned by state attorneys general about tax debt resolution scams. Consult a reliable resource such as the MC Tax Relief, one of the top rated tax relief companies that helps their clients find relief from the IRS.
Get streamlined :
A streamlined instalment agreement is the best-case scenario for taxpayers with high government debts. Taxpayers with up to $100,000 in tax debt can apply for a Fresh Start agreement as part of the IRS's Fresh Start initiative, which began in 2011. To do so, you have to file all your past tax returns and ensure that you have not entered into another installment agreement within the last 5 years. In case you are filing for personal bankruptcy, you won’t qualify.
The advantages are substantial. Taxpayers have up to 84 months to pay the amount owed, as long as the term does not exceed the collection statute's expiration date — 10-years from the date of the assessment.
If you agree to sign a waiver, the payment period can be extended further. You won't have to disclose your assets or income to the IRS either. The IRS would not levy a tax lien on you if you agree to pay by direct debit or payroll deduction plan.