Tips For Getting Out From Under Heavy Tax Debt Burdens
Posted on February 25th, 2010
The Internal Revenue Service of the United States is the governing entity that controls taxes and collection. This is the department you must negotiate with in order to resolve disputes or woes you may have with current tax debts.
There are businesses that operate solely to give aid to those in tax debts. These professionals will look at your tax debts, make a report, and give you options as to what you can do. If you are unfamiliar with the IRS and how it works, this is something you can’t avoid. Look for a tax professional that has a long history of success with clients.
File for an extension if you know you can’t pay for your debts at the specified time, but know that you will have the funds later. An extension is only to be used when you know that you won’t miss the next deadline set. If you are under incredible financial stress, an extension will do no good for you except delay your debts and likely put you in more trouble than what you started off with. This method works best for businesses.
Payment plans are available with the IRS. They don’t like to always offer them initially, and only for specific cases do they allow the plan to go forth. A payment plan should ideally be stretched out over 12 months. If the payments go longer than that, you are not fixing the problem but delaying it, as you will have new tax debts for the new year to pay. The better solution at that point would be to negotiate a better debt amount.
The IRS does allow bargaining for cases where you know you can pay a lesser amount. This is called an Offer in Compromise. An Offer in Compromise is only reserved for those who genuinely may not make their payments. The IRS will only agree to a lesser amount paid if they think that the funds required to try and collect the amount outweigh your actually ability to pay the amount in a reasonable time.
A penalty fee is applied to all accounts that are late in payment. If you already know you will be late with your payment, a solution would be to file for a penalty abatement. A tax officer will be able to help you with this. It’s not an overly complex process, but will take some work in filling out forms and contacting the IRS. In the end you can not only save on penalties, but also negotiate a fair debt price.
Closing Comments
Problems with tax debts don’t have to dictate your lifestyle. You should already be making phone calls to the IRS and to tax brokers to see what your options are in decreasing the debt, making payments, or deciding on what you can do to better your debt situation.
Learn more about St. Joseph Missouri tax credits and Syndication of federal historic tax credits.
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