How to Find Out How Much You Owe in Taxes to the IRS

When you owe taxes to the IRS, it is essential to clear them to avoid debt accumulation. Taking this precaution also prevents the consequences of unpaid taxes like federal liens and financial audits.

Unfortunately, it may be challenging to calculate your debt since the fines and penalties accumulate with time. Here, we discuss four methods to find out the amount you owe the IRS. We'll also highlight the steps to follow when using each and discuss why it is advisable to work with tax resolution experts when determining your tax debt.

1. Call the IRS

One ideal way to determine the taxes you owe is by contacting the IRS via phone between 7:00 am and 7:00 pm. This method is suitable if you do not know how to use the online tool or prefer to talk to a representative for clarification.

Since the IRS receives many calls, you may have to wait for about thirty minutes to connect with their staff. The best strategy to avoid staying on hold for an extended period is to call as early as possible.

If you want to contact the IRS to determine the amount of personal taxes you owe, you can use 1-800-829-1040.  On the other hand, if you are calling on behalf of a business, use 1-800-829-4933.

Once you get connected with a representative, they will request various details to confirm your identity. Some of the information they may need is your social security number, date of birth, and filing status. They will then use this data to check your profile and inform you how much you owe.

2. Using the IRS Online System

The IRS provides you with a tool to view your tax status and payment history. While the system can help you determine the amount you owe, it is not available all the time. The periods you can log in are Monday-Saturday, 6 am-9 pm, and 10 am-12 am on Sundays. 

When using the portal to check your tax balance, you need to confirm your identity. The system will require you to provide various details like:

  • Social security number
  • Date of birth
  • Email address
  • Mobile phone number
  • Filing status
  • A bank account number 

Once you log in to your account, you can confirm the balance you owe. Still, it is crucial to note that the system takes about 24 hours to update. Hence, you may not view the most recent penalties and fines.

3. Mailing the IRS

Another way to determine the taxes you owe is by mailing the IRS. Once they receive your request, they will send you a transcript of your account. This document includes one-year taxes, excluding the penalties and fines.

While mailing the IRS may help you determine the taxes owed, it has some drawbacks. For example, the transcript will not provide an accurate tax debt quotation. Besides, you will need to wait for some time to get feedback, which means that the penalties will continue to accumulate.

4. Consulting Tax Relief Professionals

The best way to determine your tax debt is by consulting liability experts. Such include tax attorneys, CPAs, and enrolled agents.

When working with these experts, all you need is to provide them with various identifying details. After that, they will determine the exact amount you owe, including penalties.

The main benefit of working with tax liability experts is that you will have an accurate figure of your debt. Besides, they can guide you in selecting a repayment program that is suitable for your financial status.

Contact Tax Industry to Find Out How Much You Owe

Working with a tax liability professional is the simplest way to determine your total debt. At Tax Industry, we have a team of experts specialized in tax resolution. 

With their services, you can avoid lengthy processes of contacting the IRS. Further, they can help you negotiate favorable installment repayment terms and forgiveness programs. Contact us now to consult with a tax liability expert.

Delinquent Taxes and How to Handle Them

The IRS requires each taxpayer to remit the taxes they owe before the provided deadline. If you do not send the whole amount, the debt accumulates with an interest of 1.5% each month up to 25%. Besides, your account becomes delinquent, implying that you now owe the IRS and are subject to debt collection.

If you have delinquent taxes, it is crucial to clear them to avoid getting in trouble with the IRS. This measure also stops the penalties from accumulating, saving you from repaying a hefty amount.

Here, we provide more details about delinquent taxes and the best ways to deal with them. We will also discuss the precautions you can take to avoid owing the IRS in the future.

What Happens When I Have Delinquent Taxes?

Once the deadline for paying taxes passes, the IRS will start the collection process. The first step they will take is sending a notice to your mailing address. 

This document states the amount due and the consequences you may face if you do not pay. It also indicates how much the penalties and fines will accumulate until you clear the balance.

It is vital to contact the IRS after receiving the notice to develop a payment plan. If you do not do this, they may take various debt collection actions.

For example, the IRS can freeze all your bank accounts and assets. Besides, they may file a federal tax lien, affecting your ability to get financial credit.

How to Handle Delinquent Taxes

The best way to deal with delinquent taxes is by responding to the notice sent by the IRS in time. If possible, pay the total amount you owe and update your filing documents. In case you cannot repay in full, it is advisable to consult a tax liability professional.

With their help, you can determine the most suitable installment program based on your financial situation and the amount you owe. Further, it will be easier to negotiate with the IRS for an installment payment program.

Repaying Delinquent Taxes

The IRS offers various programs to help you pay delinquent taxes. These include an installment agreement, offer in compromise, and currently not collectible. The installment agreement plan allows you to repay debts that are equal to or less than $50,000. In most cases, the IRS will give you 72 months to clear the total amount.

Offer in compromise is a tax relief program that allows you to pay less than what you owe. Still, you will need to remit an agreed lump sum amount and then pay the balance over a specified duration. 

When facing financial hardships, you may not be in a position to pay your tax debt. In such a case, the IRS can declare your account currently not collectible to stop recovery attempts. To qualify for this relief program, you must show that paying your debt will cause severe hardship.

How to Avoid Delinquent Taxes

Delinquent taxes often result from minor calculation errors and failing to provide correct information. Hence, it is essential to double-check all figures when filling your forms. Alternatively, use the IRS online system to avoid miscalculations or hire an expert to file your taxes.

More strategies to prevent a tax debt are:

  • Filing under the correct status
  • Reporting all your income
  • Reviewing all your details before submitting tax forms

Another way to avoid delinquent taxes is by ensuring you remit the total amount owed by the due date. Further, understand all the taxes that apply to your filing status to ensure you pay the correct amount.

Get Professional Help to Deal with Delinquent Taxes

Handing delinquent taxes without the help of an expert can be challenging. At Tax Industry, we provide reliable tax resolution services. Our experienced attorneys and CPAs can help you qualify for a repayment program by providing all the needed documentation.  Reach out to us now to book a consultation appointment and resolve your tax liability.

6 Common Back Tax Mistakes

flts back taxes

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.

Everything You Need to Know About the IRS One Time Forgiveness Program

irs tax forgiveness 2

When you owe the Internal Revenue Service (IRS), you may wonder whether there is a way to avoid accumulating penalties and fines. Besides that, you may want to invest but fear that your tax lien will damage your financial credibility.

Luckily, the IRS offers a One Time Forgiveness program to help people deal with tax liability. Using this initiative, you can evade the negative consequences of owing taxes. You may also get enough time to organize your finances and repay the debt without causing significant financial problems.

Read on to discover several things you need to know about the One Time Forgiveness program. We will also explain how you can determine the most suitable tax relief program based on your needs and financial status.

How Many Options Does the One Time Forgiveness Program Have?

The IRS offers several options under the IRS One Time Forgiveness program. These include Innocent Spouse Relief, Installment Agreements, and Currently Not Collectible. Innocent Spouse Relief allows you to avoid paying penalties, taxes, and interests if your current or former spouse provided wrong information when filing back taxes.

For instance, if they did not disclose some of their income sources, which led to a penalty, you may apply for relief. This initiative is applicable if the IRS can only collect the amount due from the spouse. Besides that, you can only qualify if:

  • The penalties are from self-employment taxes
  • You can prove you did not know about the inaccuracy
  • You and your spouse have not transferred money in a fraudulent scheme

Sometimes, your financial situation may make it very challenging to pay the taxes you owe. In such a case, you may apply for a Currently Not Collectible status. In case you qualify, the IRS will stop penalizing your debt and refrain from collection activities.

An Installment Agreement is a tax forgiveness program that allows you to repay your debts with a schedule. If you cannot remit the entire amount due to various issues and owe a debt of less than $50,000, you may benefit from the initiative.

Offer in Compromise (OIC) Tax Relief Option

OIC is a One Time Forgiveness relief program that is rarely offered compared to the other options. This initiative is an ideal choice if you can afford to repay some of your debt in a lump sum. Once you qualify, the IRS will forgive a significant portion of the total taxes and penalties due.

They will then provide a payment schedule allowing you to clear the remaining amount in installments. The payment period is usually a maximum of 72 months, whereby the IRS will require you to remit a specific figure without fail or delay for the entire period.

How Does One Time Forgiveness Work?

The One Time Forgiveness program you qualify for will mainly depend on your financial situation. However, determining the most suitable option may be challenging without professional help. It is advisable to consult with a tax resolution expert before applying for any relief program. By taking this step, you enhance the chances of qualifying and ensure you provide the IRS with correct information.

Once you apply for IRS One Time Forgiveness program, the IRS will assess your situation and evaluate eligibility. If they accept the application, they will provide a detailed repayment schedule.

Depending on the program you chose, you may send the amended debt in installments or lump sum. The IRS will also require you to remit all your taxes within the stipulated time moving forward. Other than that, they may perform periodic assessments on your financial status as needed.

Contact Tax Industry to Apply for Debt Relief

Each option in the IRS One Time Forgiveness program has several qualifications you must meet to be eligible. Unfortunately, gathering all the details you need to apply for this initiative may be frustrating if you do not have extensive knowledge about taxation.

At Tax Industry, we offer professional tax resolution services to help you deal with debt. Our experts can assess your situation to help you apply for the most suitable One Time Forgiveness option. Reach out to us today for reliable tax debt relief services. Due to the complex US tax systems, you may still have some questions about liability and relief programs. At Tax Industry, we have a team of experts specialized in resolution services.  With their help, you can debunk common tax myths and understand how to avoid getting into trouble with the IRS. They can also guide you in applying for relief programs to clear your debt and prevent consequences like wage garnishment. Reach out to us today to consult a tax expert.

Frequently Asked Questions About One Time Forgiveness Program

 

1. Does the IRS Have a Tax Forgiveness Program?

When owing the IRS, you are likely to wonder if it offers a tax forgiveness program. The short answer is yes, but it is important to note that having a debt is not a guarantee that you qualify for forgiveness. Before requesting tax relief, you should understand the options available. This way, you can determine which one you qualify for and know how to apply. The tax forgiveness programs offered by the IRS are an offer in compromise (OIC), innocent spouse relief, currently not collectible (CNC), and installment agreements. Each of these categories has specific requirements for eligibility. Consulting a tax professional is the best way to check if you qualify and increase the chances of the IRS considering your application.

2. When Can You Use IRS One Time Forgiveness?

If you cannot pay tax penalties due to circumstances beyond your control, you might qualify for IRS one-time forgiveness. One type of this debt relief program is a reasonable cause, available to those unable to meet their obligations due to health issues or an act of God like floods or fires. First-time penalty abatement is another one-time forgiveness program that allows the IRS to waive all fines and penalties you owe. The qualification requirements are:

  • No tax debts for the last three years
  • Filing all returns in time
  • Making prior arrangements to pay outstanding taxes

The final type of one-time forgiveness is a statutory exception. This relief program only applies if the IRS sends you an incorrect invoice after a tax debt caused by advice provided by their officials.

3. How Much Does the IRS Usually Settle For?

The value the IRS settles for will depend on the amount of debt. It also varies according to the type of tax relief program you use for repayment. For instance, if you select and qualify for an offer in compromise, you first need to pay a lump sum equal to 20% of your debt.

On the other hand, after an installment agreement, the IRS will ask how much you can afford to pay each month.  They may also request you to remit a specific amount monthly by dividing

4 . How Do I Ask for Forgiveness From the IRS?

When planning to settle your tax debt, you can call the IRS to talk to their personnel. Another option is to mail them a tax relief program application alongside the needed supporting documents. Since you must prove eligibility when requesting IRS one time tax forgiveness, it is always advisable to get professional help. With the guidance of a liability expert, you can file all past returns and submit the proper documents. Besides, it will be easier to negotiate favorable repayment terms.

5. Does IRS Forgive Debt After 10 Years?

The IRS can forgive debts that exceed ten years under certain circumstances. However, it is important to note that you may not qualify if you keep failing to pay your debt for subsequent years. This forgiveness duration can also be longer if you sign agreements and waivers that allow the IRS to extend it.