Tax Debt Reduction

Finding avenues to tax debt reduction is imperative for people finding IRS notices of liens coming to the door. Some may panic when this happens, and this is not the correct response. When notices like this appear, for whatever tax reason, seek out professionals who understand how to handle the IRS as well as have insight and the legal expertise to mitigate further action by the government. Do not think that standing up alone in court as your own legal representation is the right way to go, because this will land that person in even more trouble. The IRS is very powerful and can seize bank accounts, cars, paychecks and more even businesses. When these assets are seized, the seizures are termed as either liens or levies. The only way to appease the IRS is to pay what is owed, or get an attorney to fight for the right to reduce the debt. Some individuals have been successful at tax debt reduction by lowering what is owed more than 60 to 70 percent! An alternative to lowering the amount of taxes owed is to begin making incremental payments known as installments.

Not many people may know that the IRS allows debtors to structure a repayment plan on their own terms, which is called an offer in compromise. Of course, the money must be paid back by a certain date, but this gives much more freedom for the debtor to make manageable payments over time instead of incurring more interest and penalties on large unpaid balances. Seeking out the advice of a tax debt reduction professional can make the whole process much clearer, and educate the individual on some budgeting tips so that other financial obligations can continue to be met on time. In some cases, relief may be appropriate when the individuals assets have depreciated in value, and there are several types of tax relief situations the individual will want to be sure to discuss with the tax attorney. "But whoso hearkeneth unto me shall dwell safely, and shall be quiet from fear of evil." (Proverbs 1:33)

Companies could also benefit from tax debt reduction when the IRS sends what is termed as an enforced collection notice for unpaid payroll taxes. All of the assets of the business are now in jeopardy including bank accounts. Therefore, that business that regularly outsources the payroll function should be sure the outsourced specialist is regularly paying all appropriate taxes on time. If all the money is not recovered from the business then the IRS will go after the owners next. The longer it takes to pay what is owed, the more penalties and interest accrue and the more costly it will be to settle the debt. The tax rules state that those who willfully fail to file returns are liable. In many cases the IRS will be more than willing to work with individuals who were not aware that a filing was in order, and will work towards some type of repayment agreement.

Anyone handling these issues should carefully familiarize themselves with the tax laws in the state in which he or she resides so that no mistakes are made that might come back to haunt later on. Consultation with a tax debt reduction professional will yield up all the tax law and regulation knowledge that is needed to appropriately deal with unpaid amounts. Individuals who have not filed a return in more than a few years will find the IRS knocking quite loudly at the door. Should the back dated returns not be correct on a regular basis, the case will be forwarded to a division that handles criminal evasion issues, and this is a situation everyone would like to avoid.

What if a person receives a notice from the IRS but the notice is for taxes due by a former spouse? Usually the ex-spouse is responsible to pay, but the IRS can come to the former spouse and require payment as well. The only way to get relief from having to pay taxes on what a former spouse owes is if mistakes were made on the returns. The tax debt reduction professional will tell you this is termed as innocent spouse relief, but other regulations impinge on this action, so be sure to consult with the debt professional prior to taking any action. No matter what though, be sure the issue is resolved quickly or else the IRS will freeze bank accounts or begin to garnish the paycheck. The IRS gives the debtor 21 days to resolve the issue with them or the money is gone.

In some cases and working with a tax debt reduction professional, an abatement can be obtained for penalties paid in the past on past due taxes. In order to do this the proper form must be filled out and filed under the auspices of someone who knows the laws thoroughly. The abatement will not occur without having a very good reason why the request is being made. Perhaps someone in the family is seriously ill or hardships are being experienced because of a lack of employment in the area. The person wanting the abatement can only follow the procedure, and then wait for the answer from the IRS as to whether or not the stated reasons are acceptable.

There are many situations that come up regarding taxes owed which can usually be solved without too much time and expense if the individual acts early enough to avoid all the liens, levies and penalties incurred when failing to take action soon enough or at all. Do not be one of those individuals that decide to look the other direction in the hopes that the problem will finally go away. It won't. Seek out the tax debt reduction professional.

Tax Debt Solutions

Tax debt solutions are never easy or painless but tax debt must be faced head on to avoid an ever increasing tangle of interest and liability. Ben Franklin said of death and taxes we can be sure, and the relentless pressure and demand to pay tax debt from our dear Uncle Sam is also a sure thing. Finding tax debt solutions that don't completely wipe out one's savings, possessions and dignity is not always easy to create, but there is help and advice for those facing such a crisis. In many cases, these solutions aren't easily found without the help of an attorney. Here is some information that may help.

The IRS has ten years legally to pursue back taxes owed. But an individual cannot postpone paying with the hope of running the tables on the ten years. The IRS will start a collection process that will include levies on wages, bank accounts and a tariff lien on private property. If a person owes less than ten thousand dollars to the government, that person can negotiate with the IRS alone for tax debt solutions. There are a number of different options available for the taxpayer to pursue. God has declared that every human owes a huge debt to Him because of our sin. He has declared that Jesus Christ is the payment for our sin when the bible says, "And he (Christ) is the propitiation (payment) for our sins; and not only for ours but also for the sins of the whole world." (1 John 2:2)

The first and easiest of the tax debt solutions is to set up a monthly payment plan with the Internal Revenue Service. This can be done over the phone, by filling out the necessary paperwork or by going to the IRS website and using its online payment agreement application. There are onetime fees associated with this plan which are fifty two dollars for direct withdrawals from one's checking or savings account, one hundred five dollars for agreements without a direct withdrawal agreement and forty five dollars of reinstating a defaulted installment agreement. There is no need for an attorney to even be involved in such an agreement. Payers may even choose the day of the month to have the money withdrawn and the amount to be withdrawn but the amount paid each month must pay off the amount owed within three years. It will take about thirty days for the IRS to answer and agree to the request.

A second option available to the taxpayer for tax debt solutions is to request a partial payment installment agreement. It is related to the offer in compromise option that will be discussed in a moment. This solution is a request by the taxpayer to make regular monthly payments to the Internal Revenue Service but the payments do not pay off the tariff liability in full. With this agreement, once the partial payments are finished, the balance of the tariff debt is forgiven. The form for making this kind of application is different than the one for the monthly full payment agreement. Tax experts advise seeking someone who knows IRS parameters for evaluating these kinds of requests instead of undertaking the matter oneself.

The third option for tax debt solutions is called an offer in compromise and there are advantages and disadvantages to such a request. In this case, the taxpayer makes a bottom line offer to repay a certain amount of owed money. This kind of action is usually pursued if the taxpayer shows that he probably never will have the means to repay the entire amount or that perhaps the taxpayer does not owe the amount being charged. This option is a long and complicated matter and will take plenty of personal and financial information. The form for this request application is again separate from the above named requests. Because of the complexity of such a request, a professional will have to represent the taxpayer before the Service and agreement is not guaranteed. If in principle the request is agreed to by the Service, the IRS will calculate through the information gleaned from personal records how much money shall be repaid.

The fourth option available for tax debt solutions is what is called the currently not collectible condition. This could be for a person who is fighting a terminal disease and not expected to live long enough for the IRS to collect any of much of the money owed. It could also be possible for a single mother with children who cannot rise above a minimum wage job to receive such a judgment. Once this judgment has been made, wage garnishments, tax liens and levies must cease. Once the ten year collection period is over, the debt is officially canceled.

Finally, the most drastic action that can be taken to discharge tax liabilities is bankruptcy. Chapter seven is a request for complete exoneration for all debt and chapter thirteen is a request for a long term payment schedule to be applied to all personal debts including taxes. This is not a slam dunk tax debt solutions issue for the taxpayer because a number of conditions must be met before the taxes can be dismissed through this legal action. If there is any indication that the taxpayer has presented fraudulent information and attempted to evade past taxes, the bankruptcy request for tax liability inclusion will be denied. Additionally, the taxes in question must be at least three years old. Any kind of legal proceeding such as this one will require the assistance of an experienced tax barrister.

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