Think you’re the only one facing tax debt? Think again. 17% of federal taxes go unpaid each year. That means a large percentage of the population is currently looking down the barrel of some hefty fees and penalties. If you’re working on cleaning up your own tax debt, there’s good news. There are realistic and practical strategies you can implement today to swiftly pay off your tax debt and avoid accumulating additional fees.
The Internal Revenue Service (IRS) is not an entity that you want to owe a lot of money to, so the sooner you weigh your options for debt relief the sooner you’ll be able to move forward with your financial life.
If you’re like many individuals, your first reaction to discovering you have tax debt is to procrastinate and put it off as much as possible. However, going into denial is exactly what you don’t want to do in such a situation. When you owe tax debt, you’ll need to address the issue head-on.
The IRS is a real stickler when it comes to penalties and interest and it can create quite the Snowball Effect with your debt as each year goes by. In addition to the interest, pending tax debt can lead to levies and liens if left unattended too.
Sometimes you need an explanation into how much money you owe. A tax attorney will know better than anyone. Tax debt lawyers can assist you with all aspects of relief, but sometimes, the biggest area of relief is your peace of mind.
When you talk to lawyers that specialize in tax debt, they can break things down for you point by point until you know what you are facing and how to find your way out of it.
Negotiating a Fair Installment Agreement
When you’re filing your taxes each year, the amount you owe is due upon filing. If you can’t afford it, you will need to come up with an installment agreement plan.
In most cases, the IRS will gladly accept an installment plan when you apply for it. When you have access to Silver Tax Group, the company can help to negotiate the best terms of an agreement, so that you can pay it off in an affordable manner.
Since these tax bills add up over time and garner interest, you will need to make sure that you sign an agreement that won’t break the bank. In this regard, you will need access to a team of attorneys that can protect your rights while helping you lower your tax bill at the same time.
It’s important to know what to do when you aren’t able to pay your debt in a timely manner. Silver Tax Group can help take the stress out of the situation.
While we admit that the IRS may seem scary, it’s important to remember that they’re similar to most collection agencies. At the end of the day, they just want to get paid.
This means in many cases, they’re willing to work with you to help ensure they get at least part of their money. Often this comes in the form of an installment agreement that’s approved by the IRS.
In order to qualify for an installment agreement, you must file all tax returns within the last 5 years and currently hold a debt balance that does not exceed $50,000.
Assuming that you pass these qualifications, you can be approved for a streamlined installment agreement. In it’s most basic terms, streamlined means the IRS won’t launch any further investigation into your current financial situation and you may have fewer forms to deal with in the long run.
Those who owe $10,000 or less are typically approved for an installment agreement that can be paid over the course of three years.
When you owe tax debt, you most likely have a host of other accounts open against you as well. For most people, this is a substantial amount of credit card debt.
By working with the Silver Tax Group, you are able to negotiate a settlement or consolidation for your credit card debt as well. This way, you lower the amount of money you owe as a whole and are better equipped to pay off your tax bill.
Streamlined Installment Agreements
Streamlined agreements may sound like the answer to your prayers, but be sure to look into the minimum payment. Typically the minimum payment on a streamlined agreement is about $415.
While you’re able to pay more than the minimum whenever you like, it’s mandatory that you pay the minimum each month.
In the event that you cannot afford the minimum, you still want to speak with the IRS right away to try to establish another form of payment.
In this case, you’ll be asked to fill out and submit form 9465 as the IRS will need to do a more in-depth financial analysis.
Crafting an Offer-in-Compromise
When your tax debt has gotten out of control, sometimes you need an attorney on your side that can negotiate a compromise.
An offer-in-compromise allows you and your lawyer to find an amount with the IRS that you are willing and able to pay, which is less than you actually owe. This is very much to your advantage and can get you out of debt without you having to break the bank in the process.
Note: Be Careful to Avoid a Tax Lien
If you owe a certain amount of debt, the IRS can file a tax lien against you.
With this lien, it’s the first step toward the IRS potentially going after your assets. It can also be a serious ding to your credit report, similar to a bankruptcy.
By getting the help of tax lawyers, you will be able to oppose the lien and protect yourself. These attorneys will create a defense or a settlement for you so that you don’t have to go up against the IRS alone.
Ask For Assistance in Filing For Bankruptcy
At times, filing for bankruptcy is the best course of action to take when you owe a significant amount of tax debt.
You should never go through this process without the help of the best tax attorney you can afford. They’ll advise you on whether you should look into Chapter 7 bankruptcy or Chapter 13 bankruptcy, both of which could help you relieve your tax debt and build your financial life again.
By hiring the Silver Tax Group, you will receive the proper counsel and advice to will help you make the best decision. In doing so, you will also have full information on the process and repercussions that come with filing for bankruptcy.
Don’t think of this as a loss. Filing for bankruptcy can actually be the best thing to happen to your financial life if you find yourself in desperate straits. By getting the IRS off of your back, you will be able to alleviate your tax burden and buy some time to rebuilding your financial life piece by piece.
Ensure You Prevent Levies on Your Checking Account
A tax attorney can protect your bank accounts, or at the very least help you postpone the IRS from taking action.
When the IRS puts a lien on your bank account, they can withdraw every dime that you owe them in one fell swoop. This could potentially happen at the most inopportune time and when you least expect it.
By having access to a tax lawyer, you will have some backing in this regard to protect you.
3 Criteria For Reduction of IRS Penalty Fees
Failure-to-file, failure-to-pay and failure-to-deposit penalties will increase your tax bill almost immediately.
First-time penalty abatement (FTA) waivers can eliminate these penalties. The IRS allows you relief for one mistake. Both individuals and businesses can request FTA, but is not available for accuracy-related penalties. In the post, we will discuss FTA requirements.
You must be able to answer yes to the first two questions and no to the third question below:
- Have you filed all your required returns or sought a valid extension?
- Have you paid your taxes or arranged to pay them through an installment agreement (are you current with any payment plan)?
- Were you assessed any tax penalties in the preceding three years?
Even if received reasonable cause relief from a tax obligation in the past, you could still be eligible for FTA.
One year and one-time relief
FTA only applies to one tax year. If you need relief for more than one tax year, the FTA would apply to penalties assessed in the earliest year. If you haven’t been able to pay your taxes in 2016, 2015 and 2014, the FTA would apply to the penalties assessed in 2014. Other remedies might apply for the other years such as hardship waivers or currently not collectible status.
Prior to seeking FTA relief, it is best to speak with a tax attorney. Each situation is unique and there could be other remedies available to deal with a growing back tax burden.
Getting Help With a Tax Deferment
Getting a tax deferment can be a breath of fresh air when you’re trying to relieve your debt.
In this regard, you’ll need a lawyer who can vouch for you. With a deferment, you will buy yourself more time to pay off your taxes, as opposed to having to pay what you owe all at once.
A Silver Tax Group attorney can assist you in negotiating the terms of the deferment so that you have enough time to get your finances in a row so that you can make payments.
An Attorney Can Help You Manage the Statute of Limitations on Your Tax Debt
When you owe any significant amount of tax money to the IRS, you have a statute of limitations of 10 years to pay it off. This includes the amount of principal that you owe, in addition to any interest, fees and late payment penalties.
By having a lawyer by your side that can assist you, you’ll be better able to stay within these statutes and work within these parameters. It will buy you time to handle your affairs accordingly.
Lawyers Can Help With Liquidation Efforts
Sometimes settling your tax debt is all about paying what you can afford at the moment.
If you don’t have cash on hand, attorneys can help gauge your assets so that you can liquidate enough to make a substantial payment. When the IRS sees these sorts of efforts, you will generally receive more leniency and will be better able to get time to pay off your tax debt in full.
Representation of You and Your Interests During Hearings
When dealing with tax issues, the IRS will go through your finances with a fine-toothed comb to see what you owe and see to it that the debt is satisfied.
You’ll need to make sure that this accounting is accurate if you are going to see your way through it. By having the help of the Silver Tax Group, you can always count on an attorney by your side for every hearing, protecting your interests so that you don’t have to go about it alone.
Passports & Travel Restrictions
As of new laws in 2019, the Federal government has the right to revoke your passport if you owe more than $51,000 in tax debt.
If you travel for work, you can’t afford to have your passport revoked. By working with a tax attorney, you may be able to slow the process down or you can file an appeal to help get your passport back.
Tax Burdens in a Messy Divorce
Finally, you might also take on debt that isn’t yours when you are getting divorced from your spouse.
This is a common situation many people are faced with, and you’ll need an attorney that can go through it and sort things out so that you only pay your own debt.
Establishing Your Monthly Expense
It’s not the IRS’s intention to leave you homeless or penniless. In fact, they take into account all necessary living expenses and your current income to come up with a monthly expense amount derived from the net difference between the two.
While there are forms that can help you make your calculations, it’s always best to speak with a tax professional to try to truly establish what you can expect to pay in the event of a fixed monthly payment.
Keep in mind there are plenty of gray areas when it comes to what the IRS does and does not consider as an expense. The definition of a living expense is determined on whether or not your expenses are higher than the average in the area in which you live.
Expect them to go through your current lifestyle with a fine-tooth comb to establish all the areas where you can cut back to help them get their money faster.
Get a Clear View to Your Options
In the event that you feel you’re unable to or uncomfortable with paying the amount that the IRS has stated, there are some additional ways to wipe the slate clean and rid yourself of debt.
Many individuals choose to sell their assets off as a way to generate quick cash to put down on their debt. Some may even look into a loan or credit card as a way to handle the payments.
In some cases, an offer of compromise may be an option. However, this typically leads to a more thorough investigation from the IRS and isn’t guaranteed to be approved.
An offer of compromise also involves filing a number of specific documents and providing evidence that may require the help of a tax professional.
To truly weigh out your options, it’s suggested that you speak with an experienced tax professional that can guide you through the various payment options that the IRS may accept.
Growing awareness of the FTA waiver
For close to 17 years, the IRS has had a program in place allowing for penalty abatements. These abatements are available for individuals with a history of complying with reporting requirements.
The policy behind the first-time penalty abatement program (FTA) was to give taxpayers a break who are in trouble with the IRS for the very first time. However, many taxpayers appear unaware that such an FTA waiver even exists.
Every year, over a million taxpayers fail to take advantage of the FTA waiver. As of 2012, only about eight percent of taxpayers applied for this tax penalty relief.
In response to such a low response, the IRS tried to expand upon accessibility to this program. This includes accepting such requests by telephone. The IRS will now accept FTA requests over the telephone regardless of the size of the penalty amount owed. The IRS also has put in place a hotline helping taxpayers understand their options when it comes to the FTA.
Working Towards Voluntary Compliance
Apparently some taxpayer advocate groups are striving towards additional expansion on programs such as the FTA. They wish for the IRS to look for further ways to encourage voluntary compliance on the part of taxpayers. One particular option would be to provide an automatic FTA. This would entail automatic abatement of penalties with taxpayers with three or more straight years of reporting compliance.
The FTA waiver has its complexities and will not come into play in all circumstances, however. It will not apply for penalties related to estimated tax or regarding accuracy errors. And arguments in favor of abatement still require some reasonable basis.
Get Help With Your Tax Debt
These are only a few ways that a qualified tax attorney can assist you when you’re in need of tax relief. No matter what you are facing, getting in touch with a lawyer is your absolute best bet.
Facing tax debt can be a stressful and overwhelming challenge. However, wit the right negotiating, saving, and payment plan you can handle your debt much faster than expected.
If you’re truly looking to get a head start on paying off your debt contact us today to see how we can be of assistance. We will help you analyze your current financial situation and advise you on areas and which the IRS may be willing to work with you and come to an agreement. You can also reach us 24/7 with your pending tax questions to gain some peace of mind.