Back Taxes Help: How to Set Up a Payment Plan With the IRS

Filing Back Taxes

Back taxes can drive you into significant debt due to penalties and accumulating interests. You may also lose your assets due to liens imposed by the IRS. Setting up a payment plan is the best way to avoid such consequences while organizing your finances.

The IRS allows taxpayers to pay their debt using various installment plans. It also offers tax forgiveness programs to reduce the burden of delinquent taxes.

Here, we discuss ways to set up a payment plan with the IRS. We will also cover some debt relief programs you can consider.

Apply Online

One way to set up a payment plan with the IRS is by applying online. Log in to your e-filing portal using your account ID. After that, complete Form 9465 (installment agreement request) and submit it.

This document will require you to provide details needed during payment plan processing. Such may include the amount you owe, your employer, and your bank information. It also provides a section inquiring about the amount you can afford and the date you want to remit the installments.

Contact the IRS by Phone

Another way to set up an installment plan is by calling the IRS. Use the number 800-829-1040 to apply for debt relief for personal taxes. On the other hand, if you need an installment plan for your business, use 800-829-4933.

The IRS may provide phone numbers on the bill or notice sent by mail. Contact this number if you do not want to fill out the payment plan form. The agent will then request some information and use it to request a payment plan on your behalf.

Apply by Mail

The method used to set up a payment plan by mail can vary. If you request a tax relief program while submitting your returns, attach Form 9465 to the front. However, send the document to the nearest IRS office if you mailed your tax return forms or filed them online.

Contact a Tax Resolution Expert

Working with a tax resolution expert is the best way to set up an installment plan with the IRS. Professionals can review your financial documents and help you file back taxes. They will also consider your income and expenses before recommending a suitable tax relief program.

When setting up a tax forgiveness plan with an expert's help, they will identify all the documents needed for the process. Afterward, they will guide you in filling out various forms or do it for you. The expert will then verify your application before submitting it to the IRS.

IRS Tax Payment Plans to Consider

 The IRS has several IRS fresh start programs to help you deal with back taxes. Such include:

The short-term installment plan is available if you owe a total amount of less than $100,000. When applying for this program, you won't pay a setup fee. Still, you will have to clear the total debt in 180 days or less.

If you owe the IRS less than $50k, you may qualify for a long-term installment plan. The setup fee is $31 when applying online and $107 when using other methods.

An IRS offer in compromise lets you pay less than what you owe. However, you must remit 20% of the debt when sending your application. If the IRS approves your request, you may clear the balance in installments.

An IRS hardship program stops all debt collection measures. Such may include imposing tax liens and freezing bank accounts. Still, the interest and penalties on the owed amount will continue accruing until you can pay.

Reach Out to FinishLine Tax Solutions to Set Up a Payment Plan

Getting tax relief services from expert tax relief companies ensures you opt for a program suitable for your financial capability. At FinishLine Tax Solutions, we provide reliable back taxes help.

Our CPAs and tax attorneys will offer all the guidance and assistance you need. They may also advise ways to manage debt and deal with a tax audit. Call us now for a consultation.

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

Dealing With Tax Debt: How to Set Things Right With 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

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

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.