Navigating IRS Tax Collection: Tips for a Stress-Free Experience

Navigating IRS Tax Collection: Tips for a Stress-Free Experience

Tax season is an important time of the year when individuals and businesses file their tax returns with the IRS. However, when it comes to dealing with the IRS, tax collection can be a daunting and overwhelming experience for many of us. The fear of facing penalties, interest charges, or even an audit can cause anxiety and frustration. Fortunately, with the right knowledge and preparation, you can minimize the stress and ensure a smoother experience. In this article, we’ll provide you with essential tips and strategies to help you navigate the IRS tax collection process with confidence.

Understanding IRS tax collection

The IRS has the authority to collect taxes owed by individuals and businesses who fail to pay their taxes on time. When you file your tax return, the IRS will review it and determine if you owe any additional taxes, penalties, or interest charges. If you do, the IRS will send you a notice demanding payment of the taxes owed. This notice will include the amount of tax owed, the due date for payment, and any penalties or interest charges that apply.

Common reasons for IRS tax collection

There are several reasons why the IRS may come after you for tax collection. Some common reasons include:

  • Failing to file your tax return on time
  • Failing to pay your taxes on time
  • Failing to report all of your income on your tax return
  • Claiming false deductions or credits on your tax return
  • Failing to pay estimated taxes if you are self-employed
  • Failing to pay payroll taxes if you are a business owner

Tips to avoid IRS tax collection

To avoid IRS tax collection, it’s important to stay up-to-date with your tax obligations. Here are some tips to help you avoid tax collection:

  • File your tax return on time, even if you can’t pay the full amount owed.
  • Pay your taxes on time to avoid penalties and interest charges.
  • Report all of your income accurately on your tax return.
  • Seek professional help if you’re not sure about how to file your tax return or if you owe taxes.
  • Consider setting up a payment plan with the IRS if you can’t pay the full amount owed.

What to do if you receive an IRS tax collection notice

If you receive an IRS tax collection notice, don’t panic. Here’s what you should do:

  • Read the notice carefully and make sure you understand it.
  • Determine if the notice is accurate. If it is, pay the amount owed by the due date to avoid further penalties and interest charges.
  • If you can’t pay the amount owed, contact the IRS to discuss payment options, such as a payment plan or an offer in compromise.
  • If you believe the notice is inaccurate, respond to the notice in writing within the timeframe specified in the notice.

Negotiating with the IRS – payment plans and offers in compromise

If you owe taxes to the IRS and can’t pay the full amount owed, you may be eligible for a payment plan or an offer in compromise. A payment plan allows you to pay off your tax debt over time, while an offer in compromise allows you to settle your tax debt for less than the full amount owed.

To apply for a payment plan or an offer in compromise, you must submit a request to the IRS. The IRS will review your request and determine if you qualify for either option. Keep in mind that there are fees associated with applying for a payment plan or an offer in compromise, and not everyone will qualify.

Seeking professional help for IRS tax collection

Navigating IRS tax collection can be a complicated and stressful process. If you’re feeling overwhelmed or unsure about how to proceed, consider seeking professional help. A tax professional, such as a certified public accountant or an enrolled agent, can help you understand your tax obligations, negotiate with the IRS on your behalf, and represent you in an audit or collection dispute.

Important deadlines to keep in mind

When it comes to IRS tax collection, it’s important to keep track of important deadlines. Here are some deadlines to keep in mind:

  • April 15: Deadline for filing your individual tax return
  • June 15: Deadline for paying estimated taxes if you are self-employed
  • September 15: Deadline for paying estimated taxes if you are self-employed
  • October 15: Deadline for filing your individual tax return if you filed for an extension

Potential consequences of ignoring IRS tax collection

Ignoring IRS tax collection can have serious consequences. The IRS can impose penalties, interest charges, and even file a lien against your property. If you continue to ignore your tax obligations, the IRS may take more aggressive measures, such as garnishing your wages or seizing your assets.

Resources for navigating IRS tax collection

The IRS offers several resources to help you navigate tax collection, including:

  • IRS.gov: The IRS website provides information on tax collection, payment options, and other tax-related topics.
  • IRS Taxpayer Advocate Service: The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers resolve disputes with the IRS.
  • Local IRS offices: If you need help in person, you can visit your local IRS office for assistance.

Conclusion

Navigating IRS tax collection can be a stressful experience, but it doesn’t have to be. By understanding your rights and obligations, communicating effectively with the IRS, and seeking professional help if needed, you can successfully manage your tax collection obligations and avoid unnecessary headaches. Remember to stay up-to-date with your tax obligations, keep track of important deadlines, and don’t ignore IRS tax collection notices. With the right knowledge and preparation, you can navigate tax collection with confidence and ease.

IRS Hardship Program: Eligibility and Program Details

IRS Hardship Program: Eligibility and Program Details

As the tax filing date for 2023 approaches, you may be experiencing the burden of tax debts owed to the IRS, making it difficult to catch up and stay current with payments. If this is the case, it is important to know that you may be eligible for the IRS Hardship Program, which can offer some relief and take the weight off your shoulders. This program allows taxpayers experiencing financial hardship to pay off their tax debt through an installment agreement or an Offer in Compromise. To determine eligibility, the IRS will review the taxpayer’s income, expenses, assets, and liabilities on a case-by-case basis. If you are struggling to pay off back taxes, the IRS Hardship Program may provide the assistance needed to get back on track with your payments.

Finishline Tax Solutions can help you navigate the process of applying for the IRS Hardship Program and getting the tax relief you need.

 

The IRS Hardship Program is a program that allows taxpayers to pay off their tax debts through an installment agreement or an Offer in Compromise (OIC) if they are experiencing financial hardship.

Taxpayers who are experiencing financial hardship and are unable to pay their tax debt in full may be eligible for the program. Eligibility is determined on a case-by-case basis, taking into consideration the taxpayer's income, expenses, assets, and liabilities.

An installment agreement is a payment plan that allows taxpayers to pay off their tax debt over time, rather than in one lump sum. The payment plan may last up to 72 months, and the taxpayer must make monthly payments.

An Offer in Compromise (OIC) is an agreement between the taxpayer and the IRS that settles the tax debt for less than the full amount owed. To qualify for an OIC, the taxpayer must demonstrate that they are unable to pay the full amount and that accepting the OIC is in the best interest of both the taxpayer and the government.

To apply for the IRS Hardship Program, taxpayers must complete Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, or Form 433-F, Collection Information Statement. These forms require detailed financial information about the taxpayer's income, expenses, assets, and liabilities. The forms can be submitted online or by mail.

If a taxpayer does not qualify for the IRS Hardship Program, they may still be able to arrange a payment plan with the IRS or explore other options, such as an Offer in Compromise or bankruptcy.

Yes, interest and penalties will continue to accrue while on the IRS Hardship Program. However, the IRS may waive or reduce penalties in some cases.

If a taxpayer defaults on their installment agreement while on the IRS Hardship Program, the IRS may take collection actions, such as filing a Notice of Federal Tax Lien or issuing a levy on the taxpayer's wages or bank account.

The IRS has 10 years from the date the tax was assessed to collect the tax debt. However, the collection period may be extended in certain cases, such as if the taxpayer enters into an installment agreement or an Offer in Compromise.

Yes, it is possible to qualify for the IRS hardship program more than once, but it will depend on your specific situation. If you have previously entered into an installment agreement or Offer in Compromise and are experiencing financial hardship again, you may be able to apply for the IRS hardship program again. However, the IRS will consider factors such as your payment history and current financial situation before approving your application. It's important to note that you must be current on all your tax filings and payments to be eligible for the program.

Back Taxes: Why You should Seek Help From Tax Resolution Experts

Back Taxes: Why You should Seek Help From Tax Resolution Experts

Dealing with taxes is stressful for many people. Even if you are diligent and organized, you may find yourself owing back taxes to the IRS. You may not know the best way to deal with owing money to the IRS. Fortunately, there is help available.

If you have outstanding back taxes, it may help to work with a tax resolution expert. A tax resolution expert can provide professional advice and assistance. They help individuals and businesses resolve their tax debt on time and cost-effectively.

With their expertise, a tax resolution expert can help you get your finances back on track. They can also save you money in the long run. Here are a few reasons why you should get help from tax resolution experts to resolve back taxes.

Experienced Guidance

Tax resolution experts can provide invaluable guidance and advice. Thus, they can help you make the best decisions for resolving your back taxes. They will also take time to assess your unique situation. Doing so allows the experts to provide you with a customized plan to get the best possible outcome.

Tax resolution experts have a wealth of knowledge on tax law. Given their experience, they can help you understand your tax situation. You will be able to better comprehend why you owe taxes and your options for resolving your back taxes.

Negotiation Skills

Tax resolution experts have had years of experience negotiating with tax agencies. They know the best strategies to negotiate favorable terms with the tax agency.

These strong negotiation skills can be a major benefit when resolving back tax debts. Tax resolution experts handle negotiations to create a manageable payment plan for you.

In addition, the experts can help negotiate a settlement with the tax agency. Doing so can result in a reduced amount of taxes owed.

Cost Savings

A tax resolution expert can help you utilize the right strategies to minimize your tax debt. In doing so, they help save you money.

Tax resolution experts can also help you set up a payment plan that makes back taxes more manageable. Doing so can help taxpayers avoid additional penalties and interest.

Filing back taxes can get complicated, and you might make costly mistakes. When you work with a tax resolution expert, they can help you avoid making mistakes. Thus, they can help save you time, money, and stress. The experts can also ensure you get the best possible deal when resolving your back taxes.

Reduced Stress

Dealing with back taxes can be stressful and overwhelming. A tax resolution expert can help you relieve some of that stress. They can take the burden off your shoulders and deal with the paperwork and negotiations. In doing so, they allow you to focus on other important issues.

Working with tax resolution experts can also afford you peace of mind. You can rest easy knowing that your back taxes are being handled correctly. Experts will work to ensure that you get a resolution that is in your best interests.

Save Your Credit Score

Your credit score measures how trustworthy you are in paying back debt. It’s important because it affects what types of loans you can get. It also impacts how much you’ll pay for them.

Owing money in the form of back taxes can hurt your credit score. The unresolved debt will reduce your credit score. A lower credit score may make it difficult for you to get a loan. Experts can help you with timely tax resolution, saving your credit score.

Reach Out to the Tax Resolution Experts at FinishLine Tax Solutions Today

Working with a tax resolution expert to resolve back taxes is a wise decision. They have the expertise to help you resolve your back taxes effectively.

At FinishLine Tax Solutions, our tax resolution experts are ready to help. We can provide you with the guidance you need to resolve your tax issue. Don’t wait any longer. Contact us today to get the help you need.

6 Common Back Tax Mistakes

Each year, the IRS requires citizens to remit a certain amount of taxes based on their revenue. Unfortunately, when facing financial challenges, you may find it hard to pay what you owe. In some cases, you may also make mistakes when calculating your taxes and remit a lower amount.

If you owe taxes from previous years, it is essential to clear them as soon as possible. Besides, take various precautions to protect yourself and your business from audits and asset freezing.

Are you wondering which mistakes to avoid when owing to the IRS? Read on to discover six common blunders people make with back taxes and how you can prevent them.

1. Failing to Confirm Details on the Notice Letter

Once the IRS notices that you owe them taxes, they will send a notice explaining the reason for the contact and instructions on handling the issue at hand. Most people often fail to confirm the details indicated then end up repaying an amount higher than what they owe.

After receiving notice, confirm if the details indicated are correct. You can do this by comparing it with tax forms from the year in question. This way, you can correct an erroneous tax bill and prevent paying higher fines and penalties.

2. Not Responding to the IRS

Most IRS notices often indicate that you should respond by a certain date. Failing to do this can cause wage garnishment and bank account or asset freezing, worsening your financial situation.

Most IRS notices often indicate that you should respond by a certain date. Failing to do this can cause wage garnishment and bank account or asset freezing, worsening your financial situation.

3. Delaying to Select a Payment Plan

The IRS offers payment plans to help clear back taxes when facing financial problems. Still, most people delay selecting a suitable tax debt relief program, leading to interest accumulation. Waiting too long to start repaying the debt also affects credit scores and financial credibility.

The best way to avoid this issue is by picking a suitable repayment plan quickly. Some of the programs to consider are installment agreement, offer in compromise, and IRS Fresh Start.

4. Paying Taxes with Credit

Another common mistake with back taxes is borrowing money to repay it. While you may want to clear your debt faster, it is crucial to consider your financial situation. Taking out a loan or paying tax bills with a credit card charging a high-interest rate will further affect your finances.

In the long run, you will end up spending a significantly high amount. Avoid further damage to your assets by applying for a suitable IRS repayment program. This way, you have more time to clear the debt with limited straining or financial pressure.

5. Failing to Seek Professional Help

While you may find it less expensive to deal with the IRS alone, it may lead to costly mistakes. Without professional help, you may reduce the chances of qualifying for a repayment program. Moreover, you increase the chances of higher penalties and fines after failing to abide by IRS policies.

Working with a tax resolution expert can help you deal with back taxes more efficiently. These experts will ensure you select a payment plan that is suitable for your financial status.

6. Inadequate Documentation

If you do not keep proper records of your interactions with the IRS, it may be hard to provide evidence for a claim. Besides that, following up on your application may be challenging and time-consuming.

Avoid this back tax mistake by keeping copies of all documents shared by or with the IRS. Further, ensure you note the name of the personnel you converse with for simplified follow-up. If possible, record these conversations as you may need them for future reference.

Contact Tax Industry to Help Deal with Back Taxes

Seeking professional help when handling back taxes can help you avoid the discussed errors. At Tax Industry, we offer specialized tax resolution services to help you deal with IRS debt.

Our experts can help rectify erroneous tax bills and guide you in picking a suitable repayment program. Contact us today for back tax filing and tax relief services.

Difference between Wage Garnishment and Bank Levy: What you need to know?

Difference between Wage Garnishment and Bank Levy: What you need to know?

If you owe federal back taxes, the law empowers the IRS to take extra-ordinary measures to recover these taxes by claiming your known assets. This is likely to happen if you have not taken steps to explain your circumstances and/or set up a payment plan if you are unable to pay the taxes in full.

Bank levies and wage garnishments are two methods that the IRS can use to recover taxes owed by individuals or businesses. Most people mistake one for the other, and yet they don’t operate in the same way. Learn more about the differences between bank levies and wage garnishments in the article below.

What Is a Bank Levy?

An IRS bank levy is a legal process of seizing an individual’s money (in a bank account) to recover the person’s tax liabilities (tax, interest and penalties). The bank must comply with the IRS and will often freeze your account until you have sorted out the liability with the IRS. The IRS can freeze and enforce a levy on any type of bank account, including overseas bank accounts.

Bank levies are usually a last resort for delinquent tax evaders, and they tend to occur as a one-time event. The IRS will seize the amount that satisfies your tax liability, and they can seize all the funds in your account. If the funds in the account are insufficient, the IRS can move to recover other assets, including homes, vehicles, and other personal property.

Before enforcing a bank levy, the IRS issues a levy notice to the taxpayer, stating that they have ignored or defaulted on their tax repayment plan. The bank levy may persist to all monies coming into the bank account until you repay your tax liability in full, or the statute of limitations on the debt expires.

What Is A Wage Garnishment?

Conversely, wage garnishment does not happen as a one-time event, although it is also enforced to repay tax liabilities. With this method of tax recovery, the IRS approaches your employer to deduct a portion of your earnings before they even reach your bank account. This recovery continues until your debt is paid in full, or you take steps to prevent the garnishment order/settle the debt.

Unlike bank levies, you can contest a wage garnishment order. If you find yourself facing wage garnishment, it is best to hire a tax debt relief professional, as they can help you negotiate with the IRS to prevent extreme action. For example, when negotiating an Offer in Compromise (OIC), the IRS must cease collection efforts until the process is complete – whether or not the taxpayer succeeds.

What to Do About Bank Levies and Wage Garnishment

Once you receive a notice from the IRS stating their intention to enforce a bank levy, it is best to contact a tax relief professional and find out your options. Such options include pursuing tax relief programs such as:

  • Tax installment agreement – pay in manageable installments
  • Offer in compromise – pay a fraction of what you owe to clear the debt
  • Currently Not Collectible status – put temporary reprieve until you are in a better financial position
  • Penalty abatement – remove the penalties for nonpayment with valid reasons

A tax professional will assess your current and future financial obligations and advise you on the best way to negotiate with the IRS. They can also make the applications and negotiate on your behalf to maximize your chances of getting a suitable outcome.

Find Help for Your Tax Liability

The worst thing you can do, whether facing a bank levy or wage garnishment, is to ignore the notice and do nothing. Instead, contact our reputable and experienced tax relief professionals to work out the best way to deal with your tax debt.

Call us today to schedule your initial consultation.

Top 5 Best IRS Tax Relief Programs You Need to Know About for 2021

Top 5 Best IRS Tax Relief Programs You Need to Know About for 2021

Have you finished preparing your tax returns and found that you still owe some taxes that you didn’t know about? No need to panic.

It isn’t uncommon to find that you have some outstanding taxes when you prepare your tax returns. Luckily, the IRS offers several tax relief options to assist taxpayers to meet their obligations in a way that doesn’t cripple their financial health. Instead of ignoring your tax bill, take advantage of these legal tax relief programs to gain some reprieve and pay with a plan that suits your financial ability. 

Installment Agreements

Installment Agreements are the most common tax relief method for taxpayers who cannot clear their debt in full. It is available to taxpayers whose total tax liability (tax, interest and penalty) does not exceed $50,000. 

The IRS can allow you to repay the outstanding taxes in small installments for a maximum of 72 months. Note, however, that any interests and penalties will continue to accumulate on the outstanding debt, therefore you should try to shorten the repayment period

Innocent Spouse Relief

Through Innocent Spouse Relief, the IRS allows innocent spouses to avoid tax, interest and penalties that arise from a current or former spouse’s tax delinquency (underreporting, fraud, or nonpayment). 

Innocent Spouse Relief can only be requested when filing individual or self-employment tax returns. However, there are tax liabilities that are ineligible for cancellation under this program, such as business taxes, trust fund recovery penalties, Individual Shared Responsibility payments, and Household Employment taxes.

Offer in Compromise (OIC)

The Offer in Compromise is a tax relief option where a taxpayer pays less than the amount that they owe. Usually, the IRS will accept an Offer In Compromise when they assess the applicant’s tax liability and their present and future (potential) income earning capacity.  

To qualify for OIC, you should make the application to the IRS explaining their circumstances and give them your best offer to settle the debt. The IRS only accepts about 25 of all applications, which is why it is critical to use a qualified tax relief professional when making your application. 

If you succeed, you should pay your offer amount in five instalments or less. You may be able to appeal the decision if your OIC application is rejected. 

Advance Child Tax Credit (ACTC)

This is a tax relief program that the IRS offers to families. Many families will receive Advance Child Tax Credit payments up to 50 percent of the estimated ACTC amount (according to their 2019/2020 tax returns). 

Once the IRS processes your 2020 returns, you will receive 50 percent of this credit and from July to December 2021. The remaining half will be paid once your file your 2021 returns. You can learn more about this tax relief program by clicking here.

ACTC payments from the IRS will be paid by direct deposits to make the money easily accessible to the beneficiaries. You should ensure that you provide your correct banking information. Otherwise, the IRS will send checks in the mail beginning July 15 and every 15th of the month after that. 

The Coronavirus Economic Impact Payments

The IRS is also sending out the third round of Economic Impact Payment to the eligible individuals. Some people have already received their payments, but if you haven’t, it doesn’t mean you won’t get it. 

Additionally, the IRS is offering a 2020 Recovery Rebate Credit for those who didn’t get their first or second Economic Impact Payment or those who got less than the full amount. Those who are eligible to receive the payment but don’t usually fill tax returns can use the Non-Filer Sign-Up tool to register. 

Get Help for All Your Tax Concerns

Do you need help filing your 2020 tax returns? Contact our professionals at Finishline Tax Solutions for tailored solutions according to your needs. 

Have an outstanding tax liability? Contact us and let’s help to determine the tax relief program that works best for your needs.