Are you looking for a way to get tax debt relief? Have you exhausted all the means at your disposal? If you say YES, then read on as this post is going to be very helpful to you.
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Tax debt is created whenever you fail to pay the tax balance on your federal income tax return by the due date. Penalties and interest levied by the Internal Revenue Service (IRS) on tax debt accrue until it is paid in full. Payment notices from the IRS will become more frequent as time goes on.
Tax Debt Relief
Tax debt relief is a service provided by the government if you are unable to pay your tax obligation. This can take the shape of a monthly payment or a resolution in which the IRS decides to settle your tax liability for less than the entire amount owed.
How to know if you have tax debt
In order to find out if you owe the IRS, there are four approaches.
1. Use an online tool to verify your information.
2. By telephone – call the IRS at 800-829-1040 from 7 a.m. to 7 p.m. local time Monday through Friday for assistance with your tax return.
3. Visit an IRS office in person.
4. There is a significant possibility that you have tax debt if you are receiving letters from the IRS.
What to do if you have tax debt
These are the 3 Steps to Getting Rid of Your Tax Debt With The Internal Revenue Service
- Even if you don’t have the money to pay your taxes, you should still file it.
- Set up a payment schedule, postpone payment, or pay in full.
- Seek the advice of an expert.
IRS Tax Debt Relief
An “offer in compromise” may be able to provide tax relief. This allows you to pay the IRS less than you owe in back taxes. This can be a possibility if you can’t pay your tax obligation or if doing so will put you in a difficult financial position, according to the IRS.
Before the IRS can approve your offer, these are what they look at.
- and Equity.
IRS accepts an offer in compromise where the sum presented is the highest they can hope to collect in a reasonable time frame. Examine all payment possibilities before making an offer in compromise. Not everyone qualifies for it. Check the credentials of any tax professional you employ before helping you file an offer. If you owe more than $10,000 in back taxes we recommend getting in touch with Curadebt, one of the best tax debt settlement companies in the US you can rely on.
What are the consequences of not paying your taxes
If you’re unable to make a tax payment, the IRS offers a variety of choices, including simple extensions of time and monthly payment plans, as well as special programs for those who are truly in need.
For those who are debating whether or not to contact the Internal Revenue Service, here are the top ten reasons why you should.
1. You’ll receive notices from the IRS.
It is required that the IRS notify you of your tax debt and then issue specific notices before enforcing your balance with enforcement instruments like levies and penalties. Even though IRS letters and notices may seem inconsequential, failing to respond to them could have far-reaching consequences.
2. The IRS has the authority to withhold your refund.
If you owe taxes to the IRS then receive a refund in a subsequent year, the IRS will keep the money you were supposed to receive. Regardless of whether or not you’ve agreed to pay, this is true. Fortunately, the refund will lower your tax bill and so lower your interest.
3. You will be placed on automated collection by the IRS.
If you don’t respond to the notice, the IRS’ Automated Collection System (ACS) is likely to follow. The major role of the IRS is to collect past taxes, which are handled by ACS. In addition to levying bank accounts and earnings, the ACS can also issue liens. If you don’t meet the deadline, you’ll start receiving warnings from ACS that explain more significant repercussions.
4. The IRS will impose penalties on you.
Failure to pay penalties are imposed by the IRS on any unpaid taxes (0.5 percent per month). It’s only if the IRS has given you many notifications to collect and no payment arrangements have been made that the penalty rate climbs to 1% per month. A glimmer of hope, though, exists. The penalty rate reduces to 0.25 percent per month if you work out a payment plan with the IRS.
5. Your account will accrue interest
Interest will be added to your tax bill by the IRS. The interest rate rises as the balance increases. The annual growth rate is currently set at 5%.
6. Tax liens can be made public by the IRS
The IRS can file a Notification of Federal Tax Lien against you if you owe taxes to the agency and were sent a notice regarding the outstanding balance. A federal tax lien informs creditors of your tax liability, which essentially preserves the IRS’ interest in your assets if you try to sell the property or borrow against it.
Many people are wary about having their good names tarnished because of federal tax liens. It will also have an impact on your ability to obtain credit.
You should be aware that declaring bankruptcy will not eliminate your tax burden and any liens attached to it.
A Notice of Federal Tax Lien can be filed on smaller balances, although the IRS typically does not file one if you owe less than $10,000. The IRS won’t normally register a lien against your property if you sign in to specific payment agreements with the government.
7. The IRS can confiscate your property.
Apparently, the IRS can “seize your assets.” It’s a tax (not to be confused with a lien). But the IRS normally just seizes cash. It’s a headache for the IRS to seize and sell houses, boats, etc. A few hundred times per year, the IRS seizes property.
Common levies include:
Payroll withholding – The IRS deducts money from your paycheck to pay your taxes. The IRS will usually cease the levy if you enter into a payment agreement.
IRS A/R levies — The IRS takes your money as a small business owner or independent contractor. The IRS will cease the levy if you enter into a payment agreement (although you might have to jump through some hoops to make sure your clients or customers stop sending money to the IRS).
In this case, the IRS levies your bank account. Again, if you reach a payment agreement with the IRS, the levy usually stops.
Individually, charges can be a significant hassle and prevent bill payment. Business charges can be disastrous. Levies can prevent you from paying staff, purchasing supplies and inventory, and running your firm. Learn more