Do you currently owe back taxes to the IRS? Perhaps you have been threatened with a lien on real estate that you own, such as your home, or your bank accounts and other personal property. Has the IRS garnished your hard earned wages or seized all of your valuable assets.
If the government has devastated your life, or even threatened to, all is not lost. There are ways to resolve these life-altering problems and settle back taxes once and for all. Help dealing with the IRS or State is most definitely available to you.
Assistance from a team of professional tax relief specialists is by far the best way to stop most IRS seizures levies, and liens that are greatly affecting your life in a negative way.
If the IRS, or State has informed you that they will only accept a full lump sum payment or requires a monthly payment plan that you simply cannot afford, than a company that specializes in professional tax relief solutions has the ability to set up a monthly figure that is based on the lowest amount allowed by federal law.
You do not need to be afraid of the IRS or State. Your days of being completely consumed with unhealthy stress, and losing much needed sleep are over. If you happen to owe less than $10,000 in IRS back taxes than the best advice is to contact the government directly in order to settle back taxes.
As long as you have filed all prior tax returns, and have a clean IRS record, they will make a thirty-six month payment arrangement.
If you happen to owe the IRS over $10,000 in back taxes than you are now at the point where you should get in touch with an expert team of tax relief specialists in order to help guide you through the process. The smart thing to do is work with a company that incorporate a methodology that was specifically designed to resolve your back tax IRS problems.
Your tax relief specialists should have a successful history with methods that will stop most wage garnishments, property levies, and seizures in their tracks.
Some of the best methods to settle back taxes include the following:
There are a few options that are available to settle your back taxes, and all of the problems that go along with it. Ultimately the best solution depends on the extenuating circumstances that pertain to your personal or business situation.
Option One: The Installment Agreement
If you have a large enough income, or enough assets to pay the tax debt balance or a significant portion of it, but cannot pay it right away, an installment agreement may very well be the best choice for you. An installment agreement is one of the most common ways for taxpayers to arrange payment for tax debt. Installment agreements are typically easier to obtain when the balance is under $25,000, but are far harder when the amounts are higher than that.
The Various Types of Installment Agreements
There are various types of installment agreements that allow you to pay the IRS or State tax debt in monthly payments if you do not have the ability to pay in full.
- Guaranteed Installment Agreement: This is the simplest installment agreement, and is designed for people that owe $10,000 or less in tax debt.
- Streamlined Installment Agreement: Designed for taxpayers with tax debt up to $50,000. It is called streamlines due to the fact that it does not require full financial disclosure.
- Financially Verified Installment Agreement: This choice is for taxpayers that owe over $25,000 and cannot afford to make the monthly payment on a streamlined installment agreement.
- Longer Term Installment Agreement: If you owe the IRS over $100,000 than a longer-term installment agreement is required. Often times the IRS will stipulate that you sell of assets in order to make payments.
- Partial Payment Installment Agreement: This is for taxpayers that do not have the ability to pay off their tax debt. If approved you will not need to pay off the full balance, and are allowed to make monthly payments.
- Statue of Limitations: This requires full financial disclosers and is rarely accepted by the IRS.
- In-Business Trust Fund Installment Agreement: This choice is for unpaid trust fund taxes, which equate to payroll taxes.
Option Two: Currently Non-Collectable
Currently non-collectable status occurs when the IRS is in agreement that you do not have the ability to repay the tax debt due to the fact that it would create an economic hardship on you. In essence if you simply cannot afford to pay a lump sum or monthly payments than the government could provide you with a break that may last for years.
In order for a currently non-collectable option to be approved you will need to provide a financial statement that lists your monthly household and living expenses.
If the IRS agrees that after you pay your monthly bills, such as rent, medical expenses, car loans, utilities, etc that you have zero money left over to pay them they many stamp your account as un-collectable.
It is crucial that your monthly living expenses are reasonable in order for the IRS to consider a hardship. Internal expense guidelines, otherwise know as collection financial standards, are applied that limit your living expenses depending on the area in which you live.
Regarding your assets, the government will consider the hardship if seizing the assets would fail to result in any money paid to them. For example, there is zero or negative equity in your property.
Option Three: Penalty Abatement
Penalty abatement eliminates a portion of all the penalties that have accrued since the beginning of your tax debt balance. In most cases the penalties are significant, encompassing upwards of twenty-five percent of the back tax debt balance.
The penalty abatement certainly helps, however it will not eliminate or reduce the primary tax debt balance that the penalties and interest are based on. In addition, it is possible to eliminate all of the penalties, but not the accrued interest. That being said, if some or even all of the penalties are abated or lifted it will certainly help with your major financial burden.
Taxpayers may be qualified for a penalty abatement if they have the ability to pay the tax debt balance owed, but are under the impression that they should not be held liable for any of the penalties that have accrued. Once the penalty abatement is approved, the government requires that the entire balance be paid in full. There are multiple situations where the IRS or State will approve penalty abatement. Here are a few examples:
- Death of an immediate family member
- A natural disaster occurred that you had zero control over
- Theft or destruction of your personal records
- Major disruption in your life such as incarceration
- Family problems such as a divorce
- Unemployment for a long period of time
You may be eligible if there was a factor in your life that was out of your control. You need to remember that if your penalties are abated the full balance of your tax debt is due in full.