Three Options That May Be Open To You, If You Owe The IRS Back Taxes
Posted on: 2 November 2022Share
The Internal Revenue Service is one of the most powerful government institutions. If you owe back taxes, at some point, the IRS is going to send you a collection notice. The process of collecting back taxes can result in a variety of actions. This includes wage garnishment and seizure of assets. From the first time that you get a notice in the mail, or even before you get the notice, you need to contact an IRS tax problems attorney. The following are three options they can assist you with.
You may be able to settle your back taxes with an offer in compromise
This is when you make a lump-sum offer to the IRS. An attorney is needed because they understand what offer is acceptable and what is not. If you have enough money to pay your taxes or enough assets that can be sold, they are likely to reject your offer. It is in those situations when your tax bill is far beyond your total assets. In addition, they will look at your income. If you're making plenty of money to pay your back taxes, a settlement may not be a solution. Keep in mind, before your offer is considered, all of your tax returns for previous years need to be current. If this condition is not met, an attorney may look at another solution.
You can settle your back taxes with an installment agreement
This may not be the money-saving option you're looking for, but it will keep the IRS from seizing your assets and harassing them. An installment agreement can be stretched out for up to 72 months, giving you financial relief, for example. Another feature of an installment agreement is an abatement. This is when the IRS eliminates fees from your outstanding balance. The portion of your back taxes owed that are fees can be quite high. For the most part, these fees are penalties for not filing and for failure to pay your taxes.
You can settle your back taxes due to financial hardship
The last option that may apply to you is a hardship. The IRS has a specific formula to determine hardship. Basically, if your income is equal to or below your allowed household expenses, you will qualify. The IRS is specific about what these expenses are, and how they are calculated. An IRS tax attorney can help you to determine what this number is. If you qualify for hardship, your account is placed on hold. No further garnishments of your checks or further levies against your property will take place.
If you owe back taxes, there are several possibilities that could bring you relief. You may be able to make a settlement offer, or you may be able to enter an installment agreement, and lastly, you may have your back taxes placed on hold due to hardship. Discuss with your attorney what options are available to you.
For more information, contact a tax attorney to learn more.