There’s nothing that can keep you up at night quite like owing the IRS for unpaid taxes. The federal government has the power to levy your bank account, garnish your wages, or even seize your property if you don’t work out some kind of payback arrangement with them.
If your paycheck is being garnished, you need more than advice from a financial advisor. You need to contact a reputable tax relief attorney. Says the professionals at Rush Tax Resolution, even though the government might have frozen your bank account or accounts, it’s possible the bank hasn’t sent the money owed to you yet from your employer. Only a reputable tax law expert will be able to stop the IRS before it’s too late so that you can collect the wages you deserve.
However, you need to call as soon as you become aware of a bank levy or wage garnishment. It’s of vital importance that the State or the IRS does not destroy all your bank accounts. You will need the money to survive on a daily basis.
But what are some other ways you can go about getting tax relief when you’re in serious debt to the IRS? According to a new report by Nerdwallet, if you are struggling to pay a tax bill or are behind on your taxes, you are likely to be mulling over your options. With that in mind, here’s an overview of some ordinary debt relief programs engineered for people who need help with tax penalties, back taxes, federal tax bills, and more.
Defining Tax Relief
Tax relief can refer to a number of situations when it comes to paying your fair share of taxes. Generally speaking, any type of incentive, provision, or measure that assists taxpayers with reducing or legally minimizing their tax liabilities is considered tax relief. Relief can include popular breaks like rebates, stimulus checks, tax deductions, and tax credits.
Tax relief is also said to be a term frequently utilized by the IRS when it comes to tax deadline extensions for taxpayers who live in federally declared disaster areas or who were forced into unfortunate circumstances by natural disasters like floods or hurricanes.
The taxpayers who are affected by such events might have the option of deducting a portion of their personal property losses not covered by homeowners insurance or other varieties of reimbursements that might come from FEMA, for instance.
The IRS is said to maintain a list of specific disaster situations for which it will offer some sort of tax relief.
Common Tax Relief Alternatives
- IRS Installment or Payment Plans
If you find yourself needing more time to pay your tax bill, you need to see if you qualify for an IRS installment agreement or payment plan. A payment plan can allow you to pay an overdue tax bill, along with interest and other penalty fees, over a certain period of time. The IRS is said to maintain long-term and short-term plans.
- An Offer in Compromise
Says Nerd wallet, one popular option for tax relief is available in the form of an “offer in compromise.” Like the term implies, it allows you to settle your back taxes with the IRS for less than you owe. The IRS states that compromise might be a good option if it’s impossible for you to pay your debt even over the long term or if paying the debt will result in financial hardship for you and your family.
Keep in mind that it’s not easy getting the IRS to agree on an offer in compromise, the agency preferring payment plans instead. Over half the offers in compromise are said to be rejected. In order to determine if you qualify for an offer in compromise, the IRS will examine your income, expenses, your assets, and your overall ability to pay your bill.
If it’s just plain impossible to pay your living expenses and your tax bill, you can request that the IRS places your account under “currently-not-collectable” status. You can ask your accountant or a tax relief lawyer to request this delay in collection on your behalf. In turn, the IRS might ask you to fill out a Collection Information Statement for Wage Earners and Self-Employed Individuals form which will verify the state of your financial health.
You will be required to supply detailed information about monthly expenses and monthly income on the form.
It’s bad enough getting yourself deep in credit card debt, but at the very least you have the option of paying minimum monthly payments until a time when you have more available cash at your disposal.
However, if you find yourself in debt to the IRS, you will be fighting an uphill battle with the Federal government that can result in legal consequences. Your best bet is to contact a tax relief lawyer as soon as possible so that they can fight for the financial relief you need on your behalf.