Categories
Tax Law

Guide in Handling Tax-Related Problems and Charges

Taxation is a necessary evil, no matter how you see it. It is unfortunate that we must deal with this aspect of government, but unfortunately, it is a reality. It is never pleasant to pay taxes, but fortunately, tax settlement is an option for those who owe back taxes. It is important to understand how tax settlement works and all the important information you need to take full advantage of it.

You do not have to be the one who is directly responsible for the tax debt, but with a tax debt relief specialist by your side, you may find yourself in a much better situation.

The very first step in tax settlement is to negotiate with the IRS. This can be done directly with an agent or through a tax settlement firm. In most cases, the IRS will accept your offer of compromise, which means that you pay less than what you owe. Your tax balances will then be wiped out. Of course, there are always exceptions and the IRS might reject your offer if you have not followed rules for filing your return.

 

Taxpayers should also keep in mind that most settlements carry with them penalties and interest that must be paid. These amounts can sometimes be substantial, especially if the tax debts were underestimated when calculating your tax liabilities. Taxpayers can reduce these payments by appealing the tax liabilities through the proper channels. Many taxpayers are successful at their negotiations with the IRS, while others find the penalties and interest levied too much to handle. These taxpayers may end up having to file bankruptcy.

 

When you decide to go through with a tax settlement, it is best to hire help. You can choose to go through with your negotiations alone, but this approach could lead to further complications down the line. A tax debt specialist can help you better navigate the negotiation process. They can help you formulate a realistic plan for paying back the taxes and negotiate a fair settlement. They can also protect you from unforeseen tax debt problems that might occur later on.

 

Taxpayers have many tax settlement options available to them. The first two options are known as Installment Agreements. In an installment agreement, the taxpayer and the IRS agree to settle the debt over a period of six to twelve months. During this time, the taxpayer makes regular monthly payments to the IRS until the full amount of the debt is repaid. Another tax relief method that is often used is known as an Amortization Release. With this option, tax payments are usually smaller and begin to grow smaller after a year or two, finally missouritaxattorneys.netreaching the maximum tax debt amount that can be negotiated.

 

In some cases, tax settlements can also include payment plans as mentioned by missouritaxattorneys.net. These payment plans can help you make sure you won’t be struggling with the finances when you aren’t able to pay the taxes off completely. Taxpayers should consider all of their tax debt options carefully and consult a tax professional before making any decision. Taxpayers shouldn’t settle their debts for less than what they actually owe because these lower payments will not help their financial situation in the long run. Consulting a tax professional can help taxpayers learn more about tax settlements and other tax relief methods.

Categories
Tax Law

Taxpayer’s Guide in Availing of Tax Relief and Settlements

“There are tax debt relief companies that will help you settle or reduce tax debt,” said IRS Tax Relief Manager Robert Keeble. “Their goal is to ensure that their clients get the tax debt relief they deserve, while minimizing the tax liability of their client.” Taxation experts agree that using a tax settlement or tax debit plan will often result in a tax settlement or tax debit plan being set up which will result in the client paying less in tax liability and/or interest. “We have helped thousands of individuals settle their tax debts for less than the full amount owed.”

The Internal Revenue Service has established policies and procedures for tax debts and debtors that qualify under the tax laws. Among these qualified taxpayers are: married individuals, taxpayers who are single, taxpayers who don’t meet income or asset requirements, children, and taxpayers with disabilities. Taxation experts agree that there are four categories of taxpayers. Taxpayers may fall into one of these four categories and fall under one of two tax categories based on their priority. Taxpayers are considered “premium taxpayers” if they don’t qualify for one of these two tax debt relief programs; they may be considered “non-priority taxpayers” if they do qualify for one of these programs.

 

The tax debts that are considered “priority taxes” are those that must be eliminated before any program of tax settlement or tax debit relief will apply. Examples of priority tax debts are tax penalties and interest and may include federal tax liens, tax exempt bonds, mortgages, and state income tax. Another way to categorize tax debts is according to whether they are considered “voluntary” debts or “involuntary” debts. Examples of voluntary debts include delinquent student loans, child support, child custody payments, and tax-free inheritances. Examples of involuntary debts are tax liens and criminal fines. Both types of tax debts generally must be filed by the taxpayer prior to initiating any tax debt relief program.

 

The taxpayers who do not qualify for any of the tax debt relief programs can choose “confidence agreements,” which are court arrangements in which the IRS agrees not to pursue tax debt relief based on the taxpayer’s current financial circumstances. If the taxpayer doesn’t qualify for a confidence agreement, the IRS can file a tax lien against the delinquent taxpayer’s property, wage garnishment, or bank account. These methods of collection are usually temporary and require a future court order.

 

Click hereIf the taxpayer is unable to come up with enough money to pay the tax liability in full, the IRS will offer a compromise. This compromise is generally a lower percentage of the total tax debt owed. To qualify, taxpayers must demonstrate that they would be unable to pay the debt in full even with assistance. Examples of situations where a compromise might be possible include a major life change, an illness, a reduction in income, or a divorce. Click here to learn more about tax debt and settlement.

 

In some cases, tax debts can be resolved without the help of an attorney by negotiating with the IRS. However, it’s often best to retain an attorney if the tax debt is very large or complex. A qualified tax lawyer can negotiate a reasonable settlement for you that will satisfy your tax debt and leave you financially protected. Tax attorneys can also advise you whether a bankruptcy case is the best choice for you and your tax debts. With a knowledgeable tax lawyer by your side, your credit problems will soon be history!