Dealing With Tax Debt: How to Set Things Right With the IRS

Dealing With Tax Debt: How to Set Things Right With the IRS

Remitting all the taxes you owe can be challenging, especially when facing financial problems. If you owe the IRS, it is vital to act promptly to avoid penalties and significant debt. This step can also prevent tax liens and stop the IRS from using harsh debt collection measures like seizing your assets.

Are you wondering about the best ways to deal with tax debt and protect your finances? Read on for tips on setting things right with the IRS and the benefits of working with a professional if you have delinquent taxes.

1. Ask for a Deadline Extension

Sometimes, you may fail to remit taxes due to delays. For example, you might be waiting for an investment to mature and use the funds to pay what you owe.

If you will likely get the funds to clear tax debt soon, it is advisable to ask for a deadline extension. While the IRS will not charge any fees for the process, they will impose a 0.5% monthly penalty on balance.

Requesting a short deadline extension will help you avoid paying fees associated with other tax relief programs. Besides, it gives you more time to get your finances in order and repay the total amount.

2. Apply for Installment Payment

If you cannot pay the taxes you owe in full, you should apply for debt relief. The IRS provides an installment agreement program to help taxpayers pay the amount they owe over an extended period.

Still, you must meet the eligibility criteria, including filing back taxes. Besides, your debt should be less than $50,000 but more than $10,00, including fines and penalties.

When the IRS accepts your application, they will require you to send a given amount each month for an agreed period. For example, if you choose a short-term installment plan, you will clear the debt within 120 days. On the other hand, the IRS will require you to pay delinquent taxes within 72 months with a long-term plan.

Enrolling in an IRS installment agreement program will help you avoid accruing penalties and fines. Further, you get more time to organize your finances and pay the debt without worrying about collection measures.

3. Do Not Ignore the Matter

While you may not be in a financial position to pay taxes, ignoring the issue will only worsen it. File your returns on time to avoid penalties associated with failing to submit your forms. Further, determine the most suitable repayment program and send your application within the deadline provided by the IRS.

If the IRS sends a notice or contacts you regarding tax debt, you should respond promptly. This measure will help you set things right and avoid consequences like:

  • Property seizure
  • Ruined creditworthiness
  • Imprisonment
  • Bank levies
  • Wage garnishment

4. Contact a Tax Resolution Expert

Dealing with tax debt may be confusing without professional help. Set things right with the IRS by consulting a resolution expert near you. These will assess your situation and determine the best way to deal with accrued debt. Besides, they can identify the most suitable tax debt relief program and help you apply.

Another way a tax resolution professional may assist is by filing back taxes and determining the total amount you owe. They will then develop a tax relief plan and meet with IRS officials on your behalf.

If the IRS seized assets and imposed a bank or property lien, you cannot use the funds to finance debt. A tax resolution professional will help you negotiate a lien release. Further, they will ensure you only apply for a debt relief program that will not cause more financial challenges.

Contact FinishLine Tax Solutions to Set Things Right With IRS

Setting things right with the IRS can protect your reputation and lessen financial problems. At FinishLine Tax solutions, we will help you deal with debt using an ideal repayment plan. Our professionals can also determine the debt relief plan you qualify for and present the required forms. Contact us now to lower the effects of unpaid taxes.

How Can Tax Relief Services Help Businesses Sustain During Tough Times?

Businesses are not here to play when it comes to money. Your finances are of utmost importance for the progress of your corporation. One of the best ways to ensure financial security in tough times is by opting for professional tax debt relief services. 


Professional tax relief services can benefit your business in ways you personally cannot. You may have the right knowledge and ability to handle your finances. However, hiring an expert service will only make your operations more precise and agile. 


When the going gets tough, smart businesses seek help from the experts. If you are unsure about relief services, here are some things that might help you make your decision clearer. Continue reading to find out ways in which a tax relief service will assist you in difficult times.


8 ways tax relief services help your business in tough times


Here are eight instances when you can count on your professional tax relief service to have your back.

 

1. You have back up with the IRS


Hiring a tax relief firm for your business is one of the best decisions you can take. This is with regards to facing government services like the IRS. With experts on your team, you will have no trouble tackling the most difficult of situations.


Tax attorneys are equipped with the right knowledge and the right tools to get you out of sticky situations easily. You might not be able to get the right settlement and rulings without their assistance. Use their knowledge and experience to your advantage and work alongside professionals to benefit your business in the long run.


2. Get out of paying additional taxes 


Often, the tax amount you receive consists of additional penalties and interest values that you can get out of. You have to pay the exact amount you owe to the government. However, you can often work your way around these values.


Tax relief Experts have better strategies


Experts from the tax firm you hire can assess your taxes. After careful examination, they might be able to come up with ways to get rid of these penalties. Most of these penalties can be deducted from your taxes once you get the right kind of help from professional tax attorneys. Hiring a professional tax relief firm is an investment that will only prove to be financially fruitful to you in the future. 


3. Keep your property safe in tough times


People often end up losing their homes and cars when businesses face trouble with the law. Tax debts can be very difficult to tackle without professional help. If businessmen ignore such debts, they can reach critical stages that can take a lot of time and effort to resolve. Property seizure is one tactic the IRS uses in extreme cases.


When businesses are unable to pay off their debts, the IRS begins seizing property like homes, cars, etc. You can avoid such problems if you choose to get professional help from tax relief firms. Attorneys can help you dodge such severe consequences easily.

  

4. Avoid bank levies with the help of tax relief services


The IRS could be on your back if you have taxes due from the past. One of the most common ways the IRS collects this money is through bank levies. You will receive numerous warnings, and an official letter before such extreme steps are taken. However, businesses usually pay no heed to such warnings and end up facing the consequences.


Tax relief is a great way to avoid such issues. Contact your attorneys the moment you receive a warning from the IRS. This will help them come up with a strategy to help your business stay afloat. 


5. Prevent wage garnishment by the IRS


Wage garnishment is another popular tactic used by the IRS to collect the funds you owe them. Your paycheck is tampered with when the IRS decides to go forward with wage garnishment. Your employer complies with their demands and chooses to withhold a certain amount of money from your paycheck.


This money is a significant amount that can throw your daily activities off the rails. If you hire a professional attorney, they can help you by appealing to the IRS on your behalf. This can lead to a reduction in the garnishment amount or the complete elimination of wage garnishment too. Find my 401k is as simple as contacting your previous employer. The HR department at your employer should have records of your retirement account and may advise you on how to access it or roll it over if you want to do so.


6. Get up to speed with former returns 


Tax issues are more common than you might think. This is because people all over the country lack the essential knowledge required to file taxes smartly. Often people end up not paying taxes altogether because they deem it too tedious. This practice piles on and becomes an issue in the long run.


If you fail to file your tax returns on time, you will be in deep trouble with the IRS. The solution to this problem is hiring professional tax relief services, which can sort your tax returns out for you. This way, you can catch up to what you missed out on and stay up to date with your filing.  


7. Tax relief services provide Audit assistance 


Tax audits are nightmare fuel for most businesses. IRS audits are the last thing corporations want to deal with. However, audits are more common than you might want them to be. They are a tedious process, and you might want a professional tax relief service by your side when you are being audited.


These firms can look after all your needs and will stand by you to make the process easier. You will not have to face the procedure alone. 


8. Get some work off your shoulders


When your business lands in financial trouble, your responsibilities are doubled, if not more. You have to pay special attention to the operations and finances all by yourself. This might be very difficult to manage. The quality of your work might falter.  You are spread out too thin, and this could affect your business negatively.


In such cases, hiring a professional tax relief firm can help you save time and money. This investment will not only protect your business financially, but it will also help clear your mind. Focus on what is important and keep your business running while you let the professionals handle your finances.  


Financial security is something you cannot compromise on. If you are looking for a trustworthy and competent solution to your tax needs, it is crucial that you pick a reliable tax relief service too. Let go of all your worries and inhibitions and work alongside professionals to get your business back on track again.


Talk to a Tax Relief Expert Today

Tax Relief Services During Coronavirus

Getting tax relief services during a global pandemic can help. Fortunately, there's help with FinishLine Tax Solutions. If you owe back taxes and can't afford to pay them back, find a tax relief services professional. Dealing with back taxes can be hard, but it's especially hard during a global pandemic. Fortunately, the federal government continues to provide tax relief options for taxpayers seeking relief during the coronavirus. Even outside of a global pandemic, there are tax relief services available to taxpayers who owe more than they can pay. We'll share the various tax relief options that are available to you. Additionally, we'll touch on tax relief options that are available as a result of the COVID-19 pandemic.

What are tax relief services?

First, we want to tell you exactly what tax relief services are. If you owe more in taxes than you can pay, you may be eligible for tax relief services. But, the program you qualify for will depend on how much you owe. In other words, those owning more than $50,000 will be eligible for a different program than those owning $10,000. Fortunately, there are several tax relief programs available. Additionally, in light of the current COVID-19 pandemic, the federal government has offered even more tax relief programs.

How do tax relief services work?

Tax relief services are available to taxpayers when they owe more than they can pay. The IRS has several tax relief services that can help taxpayers in need. Enrolling in a tax relief plan enables you to break down your tax debt into payments. Similarly, there are relief programs that can reduce the amount of tax you have to pay to the government. Tax relief services will not clear out your entire tax bill. But it can save you a lot of money in the long run. Additionally, it can make paying what you owe the government a lot more manageable.

What is tax relief?

Tax relief is when you set up a payment plan or negotiate a settlement with the IRS. However, keep in mind that tax relief isn't about totally erasing your tax obligation. Instead, it makes it easier for you to pay back your tax debt. In some cases, you may be eligible for special tax relief options. For instance, if you've been involved in a natural disaster, you may be eligible for special tax relief programs. Additionally, there are special tax relief programs available in light of COVID-19, which we will discuss later.

What are my tax relief services options?

Depending on your tax situation, there are multiple options for tax relief services. Here are a few programs to consider. We will discuss these more in-depth further below.

  • Installment Agreement: This program allows you to pay back your debt in installments. In other words, you can pay down your debt in smaller payments. There are long-term and short-term Installment Agreement programs. Available.
  • Offer in Compromise: If your debt is more than you can handle, you may be eligible for an Offer in Compromise. Your eligibility for an Offer in Compromise will depend on a few things. In other words, the IRS will first consider your ability to pay, income, expenses, and assets first.
  • Penalty Abatement: When you owe tax debt, penalties can also add up. Fortunately, there are tax relief services that may help. In this case, the IRS forgives the penalties on your tax bill.

What is an Installment Agreement?

Another way to think of an Installment Agreement is a payment plan. In other words, you arrange with the IRS to pay back your tax debt in monthly installments. There are long-term payment plans and there are short-term payment plans.

  • A short-term payment plan is for those who owe a maximum of $100,000. This maximum amount includes taxes, penalties, and interest.
  • Long-term payment plans are for those who owe a maximum of $50,000. This maximum amount includes taxes, penalties, and interest.

An Installment Agreement can be a helpful tax relief plan for taxpayers. It enables you to negotiate an affordable monthly payment plan with the IRS. However, negotiating your monthly payment is a very important step. In other words, you'll want to work with a tax relief specialist on negotiating. A tax relief specialist can help you ensure you get an affordable monthly payment amount.

Offer in Compromise

An Offer in Compromise program can be a beneficial tax relief program. With an Offer in Compromise, you can often settle your tax debt for much less. In other words, the IRS will reduce some of your overall tax debt. But, it's important to note that not everyone will get approved for an Offer in Compromise. The IRS will require financial proof that you are unable to pay back your tax debt in full. In this case, a tax relief professional can help you negotiate your total settlement amount. For example, you don't want to come up with a number that's too low. In other words, you can run the risk of having the IRS deny your Offer in Compromise agreement amount if it's too low. Therefore, working with a tax relief professional can help you get the best deal.

Penalty Abatement

Another tax relief service is penalty abatement. In this case, you can get the IRS to release the penalties you have on your tax debt. However, it's important to note that a penalty abatement will not totally reduce your tax debt. In other words, you will still owe taxes with a penalty abatement. However, it's a tax relief program that can greatly reduce your overall tax debt.

Tax Relief for COVID-19 Pandemic

In light of the current COVID-19 pandemic, the federal government has announced several tax relief services. First, taxpayers now have until July 15 to file and pay back their taxes. This date was extended from the original tax deadline of April 15. However, it's not advisable to delay paying or filing taxes. Work with a tax relief specialist to pay back any debt you cannot afford to pay at once. In addition, the federal government has offered a federal stimulus check available to the majority of taxpayers. The stimulus check amount starts at $1,200 and decreases based on your total earnings. Furthermore, the IRS is making it possible to borrow up to $100,000 from your IRA. In addition, the federal government will allow you three years to pay this back. Furthermore, you get three years to pay off tax debt without consequences.

Need Tax Relief Services?

During these uncertain times, tax debt relief services can be of the utmost importance. If you have tax debt that you can't pay back, don't hesitate to call us. We can help you with tax relief options and more. Call FinishLine Tax Solutions for a free consultation at 855-950-2720.

IRS Penalty Abatement Letter Writing Instructions

If you owe tax debt and fail to pay it in time, the IRS can penalize you. Every year, millions of penalties are assessed. The IRS uses penalties for encouraging taxpayers to comply with the rules. Owing money to the IRS is overwhelming and intimidating. This penalty can further increase your tax debt. However, before the IRS starts taking collection actions, you can request for Penalty Abatement.

When you owe money to the IRS, you can’t just put it off forever. You need to resolve all issues before the IRS starts taking extreme measures to collect the debt. These extreme measures might include garnishing your wages, seizing your assets, levying bank accounts, and others. But, would Penalty Abatement get you some relief from tax debt? Yes, because penalties and interest make up a large portion of your debt. 

So, if you have a reasonable cause, you can request the IRS for penalty abatement. Here are some of the reasons acceptable by the IRS for penalty abatement:

Reasons acceptable by the IRS for penalty abatement:

  • A medical emergency
  • Death in the family
  • An error made by an employee of the IRS
  • Records destroyed because of a natural disaster or a catastrophe. E.g. Flood, etc.
  • Mailed returns and payment timely but to the wrong address

Even if you had one of the above-mentioned reasons, you must meet the following three basic criteria to qualify for the penalty abatement:

Criteria to qualify for penalty abatement

  • You must not have had any penalty of more than $100 for the last three years.
  • All your returns and extensions are filed properly. If you still have paperwork to do, you won’t be eligible. So, before you write your penalty abatement letter, make sure that you have already updated all the filing with the IRS.
  • You must have made arrangements for any tax debt that you owe. Even if you are not able to pay the debt in full, you must have at least set up a payment plan with the IRS.

For the first time penalty abatement, you can apply in writing, online, or by calling the IRS. If you are eligible, the IRS will remove the penalties. However, if the IRS refuses, the penalties will continue to grow. Also, the IRS removes penalties that were incurred in the first year. On several penalties, there is a limit on how much can be removed. 

Writing a Penalty Abatement Letter

If the IRS has imposed a penalty on your back taxes, you can write a letter to the IRS requesting Penalty Abatement. However, if you want to improve the chances of getting your request accepted, you must take the help of tax professionals. 

For requesting specific penalty abatement that is for more than a year, you have to prove to the IRS that you had a reasonable cause like:

  • The death of a family member
  • Held hostage in some other country
  • Unavoidable absence like being in jail or rehab
  • Tax records were destroyed because of floods, fires, or other casualties
  • Could not make the payment because of a civil disturbance like a riot or mail strike
  • Couldn’t determine the right amount of tax for reasons that were not in your control
  • Received wrong advice from a tax expert whom you thought to be trustworthy and competent.

With the letter, you have to send the copies of documents supporting your reason.

Three things to do before drafting your Abatement Letter

  1. Get all the historical tax records from the IRS as well as your personal papers. It will help you get the same view as the IRS agent.
  2. Next, you need to start reviewing the records so that you have an understanding of what happened that stopped you from paying your tax debt on time. This way, you will be able to start working on the penalty abatement letter.
  3. Once you have an understanding of what occurred and what the IRS knows about you, you need to start conducting research. This is just to ensure you have enough grounds for warranting penalty relief.

Organizing a Penalty Abatement Letter

While writing your penalty abatement letter, you have to design it in a way that the IRS agent is able to easily follow what happened, why you were penalized, and what steps you took for rectifying or mitigating the problems. Every fact that you present might need different styles of organization. Here, is a general section format of a penalty abatement letter:

  1. Introduction - The letter should start with a brief statement where you introduce yourself and tell what exactly you are asking for. In this case, you are asking for relief from penalties and any interest accruing because of those penalties.
  2. Facts - This section is the most important part of your penalty abatement letter. You should present the facts in a way that the reader, the IRS agent who will be making the decision, feels sympathetic to your plight.
  3. Issues - If your fact section is becoming too complicated, you can add a separate section for clarifying the exact issue.
  4. Law and Analysis - This section is a follow-up to the facts sections. In this, you will be mentioning the laws that are in conjunction with the facts. They must support your proposition of warranting penalty relief.
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  6. Conclusion - In the end, reiterate what you are looking for. Request the IRS to give you relief from penalties and the interest accrued from those penalties.

It is not necessary to include the payment along with the penalty abatement letter. But, if you can pay the debt, it will help your case a lot. If you cannot afford to pay, you can apply for an IRS payment plan that allows you to make monthly payments to pay off your tax debt. 

Conclusion

Penalty abatement has more open-ended requirements. It is also easier to get than any other form of debt settlement. This is because, instead of a computer, an actual person will be attending your case. The only important issue here is whether your situation was beyond your control or not. If you want to improve your chances of getting the penalty abatement, take help from tax relief experts who specialize in penalty abatement.