IRS Tax Debt Solutions: The Offer In Compromise

 

Some taxpayers get overwhelmed by the sum of the debt that they owe to the IRS. Since they know

that they can't afford what they owe, they ignore the problem altogether in a futile attempt to "make

the problem go away.”  Ignoring the debt you owe to the IRS will only lead to more problems. The IRS

will notice, and they'll assess high interest and penalties. The IRS has a variety of IRS tax services available to taxpayers so that they can resolve their tax debt.  You have a lot of options available to you, but for today we're going to focus on one of the most common resolution options people use when they're burdened with tax debt: the offer in compromise (OIC).

 

Offer In Compromise Basics

 

If you find yourself with tax debt that you don't think you can pay off in a reasonable amount of time, you can file an OIC with the IRS.   An OIC is exactly what it sounds like, since you can't pay the amount that you owe you make a compromise with the IRS and offer to pay alower amount. The IRS reviews your ability to pay, your current level of income, your expenses, and your asset equity, among other things.  You should consider hiring a tax resolution professional to help you through the process since they're familiar with the ins and outs of IRS tax rules.  They'll be able to analyze your situation and tell you which option will be least burdensome. They'll also be able to give you advice on how to avoid owing money or reduce the amount owed for next year.

 

Wall & Associates, Inc. is the best company to contact to assist for these services. They have many years of experience with these situations and will be able to appropriately advise you. Wall & Associates, Inc. will file all necessary paperwork for an OIC.  When you submit your paperwork

(please be advised that the IRS charges an application fee of $150 for submitting an offer in compromise) must send a down payment for each offer form you fill out. Your down payment will differ based on your offer and the payment option you choose. You can opt to give the IRS a lump sum cash payment where you submit an initial payment of 20% of the total offer amount

with your application. You'll pay the remaining balance of the offer in five payments or less. Or you

could choose to pay a periodic payment, where you gradually pay off the remaining balance of the offer each month until the debt is paid in full. If you want more information on OICs, visit the

Wall & Associates, Inc. website for a more in-depth explanation of the program.

 

*Not a solicitation for legal services*

Tax Liens: What You Should Know

Though it happens every day, whether intentionally or unintentionally, not paying taxes owed to the IRS can allow the federal government to file a claim against you known as a tax lien. Though this claim does not immediately go onto your public records, and thus is initially referred to as a "statutory" or "automatic" lien, it will eventually become very public information and can and will be used against the person or business by credit reporting agencies.

How Does A Tax Lien Affect Me?

As soon as the IRS files a lien with your county, it can be available for credit card companies to view. It will affect your credit report and credit score negatively, which could make it difficult to open credit cards, make large purchases and more. You'll also have a hard time getting any of your credit extended.

How Can I Avoid A Tax Lien?

The only way to avoid having the IRS file a lien on you is to pay your owed taxes in full. There are many ways to settle your debt if you can't pay the cost up front, but you should always stay on top of your taxes and contact the IRS immediately if this is the case.

How do I Know I Have One?

You will receive a letter of notice from the IRS once a lien has been placed on any of your assets. You can also check your local courthouse to see your public records.

Can I Get Rid Of It?

Yes, you can get rid of your IRS tax lien by paying your owed amount in full. There are also options in which you can file an Offer in Compromise, which states that you do not currently have the entire amount but will come to an agreement of a payment plan or some other sort of compromise, depending upon circumstances. Tax liens can also expire after ten years of the initial billing if the IRS doesn’t refile them, but waiting for the bill to expire is extremely risky and harmful to your credit.

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Three Possible Options to Take if You Owe the Government Money

For people who never owe money doing taxes to them is nothing more than filling out a sheet of paper and waiting for a check, but if you usually owe money it’s nothing but stress and worry.  This problem gets worse if you end up owing several years of back taxes, and that scenario is a lot more common than you’d think.

When some people think of taxpayers who owe the government money they think about wealthy business owners who have been purposely hiding money away, but in reality, that’s rarely the case.  People from all walks of life can owe the government money, and if you don’t make a lot, paying off the debt can take a while.  If you owe the government  taxes there are certain things you can do that can help make paying off your debt easier.

Installment Agreement

An installment agreement is essentially a payment plan you schedule with the government. This option is simple, but in order to qualify you have to meet certain requirements:

Offer in Compromise

This may sound strange, but it actually is possible to work out a deal with the IRS about the amount of debt you pay back.  In order to  get this, the IRS must doubt that you can ever reasonably pay back the tax debt you owe.  The offer in compromise isn’t easy to get, and you should consult an experienced tax debt consultant if you’re serious about filing for this. 

Be Declared as “Currently Not Collectible”

If you can send the IRS credible evidence that proves that you have no ability to pay your debt, they may declare you as “currently not collectible”.  Once the IRS declares a taxpayer as currently not collectible, the IRS must stop all collection activities, which includes all levies.The IRS will still send an annual statement to the taxpayer, but that form is just for the taxpayer’s records. 

*not a solicitation for legal services*

IRS Help 101: Your Possible Back Tax Payment Options

If you owe the Internal Revenue Service (IRS) back taxes you'll be hearing from them in the near future.  The IRS claims that each year Americans who don't pay taxes end up generating about $290 billion in uncollected taxes, and those billions of dollars could be helping fund government programs that are in desperate need of money.  The government has been pursuing people who owe back taxes more aggressively; regardless of if they owe a single year of back taxes or decades of unpaid taxes. 

Don't panic if you owe back taxes.  The government may be going after people that owe the IRS money, but they also provide a variety of payment plans, programs, and solutions for citizens that owe the government tax money.  A tax resolution company would be able to help you find the most efficient and cost effective solution for paying your back taxes.  Listed below are a a few options that a tax resolution company may use.

Installment Agreement

Installment agreements are available to people who can't pay their tax debt in full at one time.  The program allows people who on an installment agreement to make monthly payments until their entire debt is paid back. One thing to note about these agreements is that it takes a long time to pay off debts due to added interest and penalties. These are very often long-term plans as well.

Offer in Compromise

An offer in compromise allows taxpayers to permanently settle their taxes for less than the amount that they owe If you submit in an offer in compromise to the IRS, then the IRS will have to look at several factors like your current level of income, your expenses, and your asset equity.

Advice For People Who Owe State Back Taxes

It's possible for citizens to owe back taxes to the IRS and taxes to their own state.  The process for state tax settlements is very similar to the process for federal tax settlements, but there are a few key differences that vary from state to state. A tax debt resolution company will have each individual’s state information.

*Not a solicitation for legal services*

IRS Problems and Ways to Deal with them

Taxes aren't a seasonal issue, people deal with tax problems throughout the year.  Right now there are thousands of people who are trying to figure out a way to deal with the consequences of filing their taxes late, filing them incorrectly, or refusing to file them all together.  There are a lot of questions going through their minds right now.  Where am I going to get the money from? Am I going to get audited?  Are they going to take my house?  Tax resolution companies and other tax specialists can help you with your tax problems, but people who find themselves in trouble with the IRS this year should do whatever they can to avoid being in the same trouble next year.  When the 2014 tax season rolls around, be sure that you do everything you can to avoid these IRS tax problems.

Back Taxes

One of the most common issues that may arise during tax season is how to deal with delinquent taxes. We all know that our taxes are supposed to be turned in no later than April 15^th of every year. However, for any number of reasons, this may not always happen. When a person does not file their taxes on time, it does not mean they are not still expected to pay them. If you need to take care of any delinquent tax debt it is best to file the return as soon as possible. In the event that you owe more than you can pay, here are a few options : the IRS can set you up with an installment agreement, in which you would pay off your tax bill in more manageable installments.  They may also consider an appropriate settlement or a currently not collectible status.

Audit

There is probably no scarier feeling during tax season then learning that the IRS is going to audit you. There are many reasons a person may be audited,  for instance, the amount you reported making in the previous calendar year.  If the numbers from your 1099 or W-2 do not match the numbers reported on your tax return, the government could potentially launch an audit to figure out what is going on.

Liens and Levies

An IRS tax lien is another rather uncomfortable situation that taxpayers hope to avoid. A lien could be placed on your home or other property until your taxes are paid up. The best way to avoid a tax lien is to simply file and pay your federal tax return on time. You may also see a reduction in your wages as the result of a wage levy placed against you until your tax bill is settled.

*Not a solicitation for legal services*