It’s tough to escape tax debt. Money owed to the interior Revenue Service is nearly impossible to discharge in personal bankruptcy. And while there’s a 10-year statute of limitations during which the govt can collect the cash , the IRS will surely take action to urge its money before 10 years is passed. Your best solution: Work with a tax attorney to seek out a tax debt relief solution to your problems.
How the IRS Collects Unpaid Taxes
The Internal Revenue Service has several ways during which it collects unpaid taxes. It can:
- Get a federal tax lien against your property. A lien may be a legal claim against your assets—such as land , vehicles and securities—that prevents the property from being sold until the tax debt is paid. In addition, a lien may make it difficult to get new credit.
- Impose a tax levy which—unlike a tax lien—allows the IRS to truly seize and sell your property to repay your tax debt.
The IRS also can add tax penalties to your bill within the sort of fines and interest charges.
If you ignore tax bills and other legal notices from the IRS, they’re going to take action within the sort of tax liens, tax levies, penalties and interest. However, this will be avoided if you and your tax attorney communicate with the IRS and work to seek out a workable solution to pay off your IRS debt.
Legal Tax Resolution Options
There are several ways during which to unravel your tax debt problem. Your tax lawyers can review the pros and cons of every option and assist you decide which tax debt reduction option would work best for you.
If you do not have the cash available to pay your tax debt during a single payment , you’ll apply to pay the cash in an installment payment plan. This allows you to make monthly payments to the IRS until your taxes are paid off. The monthly payment is typically a hard and fast sum, so you’ll be wanting to review your budget and plan to a reasonable amount. Interest and penalties will still accrue on your unpaid debt, which suggests you ought to attempt to pay down the balance as quickly as possible.
If you’ve got immediate access to most of the cash you owe, you’ll apply for a suggestion in compromise. This allows you to settle your tax debt for fewer than the entire amount owed. Typically the IRS will consider a suggestion in compromise if full payment of your tax debt would present a big financial hardship.
When you apply for a suggestion in compromise, you’ll even have to submit a non-refundable application fee. Because there’s a price to use , work together with your tax debt lawyer to return up with a good and appropriate offer. Low-ball offers are going to be rejected if the IRS believes you’ll afford to pay extra money .
You can also request a penalty abatement from the IRS. This is an invitation to erase any fines which will are added to your bill . These fines are intended to penalize people that willfully ignore their tax debt. If you’ve incurred your tax debt because the results of an honest mistake or because you have been unable to pay, the IRS will consider a penalty abatement.
Finally, during a limited number of circumstances you’ll be ready to discharge some or all of your tax debt if you file for private bankruptcy. Tax debt will only be discharged if you meet very specific requirements. Your tax relief attorney can tell you if you qualify.
Hire a Tax Relief Attorney Today
Ignoring your tax debt won’t make it get away . Your tax resolution solution is to rent a lawyer who has experience negotiating tax debt solutions with the IRS and together with your state tax authority.
A tax debt attorney will have the knowledge and knowledge to guage your situation, explain your legal options and suggest the best-possible solution. Your tax relief lawyer can then guide you thru the method of eliminating your tax debt.