What the Internal Revenue Service can do for you – Why you shouldn’t use a private tax relief firm.

If you owe taxes to the IRS but cannot pay them in full, you may want to submit Form 9465, Installment Agreement Request. If your tax debt is less than $10,000, the Internal Revenue Service must consider your request for a payment plan. The return should still be maximized despite this. You may still be subject to interest and late payment penalties for any tax not paid by the original due date, even if your request for an installment plan is approved. To avoid IRS collection letters and processes like a Notice of Federal Tax Lien or a levy, you may set up an installment agreement and pay your taxes in installments.

Qualifying for an Installment Agreement

An Installment Agreement is available to those who cannot fully pay their tax obligation. Participants in the program can make reduced monthly payments until their debt is settled in full. The IRS has raised the maximum repayment time for tax debt under its Fresh Start IRS program from five to six years and raised the barrier for more accessible installment arrangements from $25,000 to $50,000. If you owe less than $50,000 in federal income taxes and are not required to file a Collection Information Statement, you may apply for an installment agreement with the IRS online.

Qualifying for an Offer in Compromise

Taxpayers may permanently settle their tax burden for less than the total amount owing via an Offer in Compromise (OIC). To qualify for the OIC, taxpayers must have exhausted all other payment options before applying; this is a vital qualification process. The IRS expanded the OIC program as part of its Fresh Start strategy to help more low-income filers. However, if the IRS believes that the obligation can be paid in whole through a lump payment or installment agreement, it will not accept the offer. The Internal Revenue Service (IRS) offers guidance on its website regarding how to find a qualified tax expert for an OIC.

Due to significant hardship, certain people may be able to have their tax fines waived or reduced. If the individual meets exceptionally stringent standards, the IRS may agree to waive the penalties. Interest rate reductions are much less common and are granted only in exceptional circumstances. You still have to pay taxes, even if these programs eliminate any penalties or interest you may have accrued. Be cautious of any tax relief company that guarantees to eliminate your interest and liabilities; no matter who you choose to defend you before IRS Collections, your options are severely limited.

They should meet with you in person to review your options and rates if you hire them. The Internal Revenue Service states that you may apply on your own for an Installment Agreement, an Offer in Compromise, or a waiver of penalties and interest. Only Enrolled Agents (federally-approved tax practitioners who may represent taxpayers at all administrative levels of the IRS), CPAs, and attorneys are authorized to represent taxpayers in negotiations with the IRS on their behalf. You should be able to sit down with them in person and have them go through your options and prices.

Before accepting any agreement that requires you to pay for legal representation in a tax collection action in advance, be sure you fully understand the refund terms. You should find out whether the organization has a default billing rate, which is a flat price applied to the work of all employees and not only the tax professionals if you were to terminate your subscription. Even at the beginning of the representation, a high default billing rate might quickly consume a significant portion of your initial donation.

Illusionary Tax Breaks

Avoid hiring tax relief businesses who charge you money yet make a bad situation worse if you have tax debt and are looking for help in resolving it. You need to know a few things, and we’ll go through them in the paragraphs below.

Is the company knowledgeable?

Discuss your tax problems and impending financial catastrophe with the chosen tax relief agency. If the tax relief company you call can’t or won’t answer your questions, you may want to look elsewhere.

A red flag should go up if a tax relief company cannot provide evidence of the reliability of its data sources. The IRS publishes its tax regulations in the form of a website. However, some of the terminologies on official sites may be challenging. The agent working on your case should happily explain whatever paperwork you provide them.

Are there trustworthy reviews?

Online reviews of tax relief services tend to be lengthy and many. Before crediting a study, be sure the company or group that wrote it is credible. Some companies even go so far as to publish client reviews online. Comments about BC Tax can be found here.

Get in touch with the IRS as soon as you see a problem.

Problems cannot be made to go away if no attention is paid to them. The Internal Revenue Service should be contacted without delay if an issue arises. It may work up a payment plan with you so that you may catch up on your bills. Check with the IRS to see whether you qualify for the Offer in Compromise (OIC) program before you hire a tax relief agency to settle your tax arrears. In most cases, only those in dire straits get their bids accepted. Around 63,000 OICs submitted in 2016, but the IRS ultimately authorized only about 27,000.

There are no easy fixes.

Keep in mind there is no foolproof method of avoiding financial obligations. If a tax relief company promises to reduce your debt, run the other way significantly.

The Internal Revenue Service: A Fresh Start for taxpayers in debt

If your tax debt is between $25,000 and $50,000, you may be eligible for the IRS’s Fresh Start initiative. To qualify for the 6-year repayment plan offered by this program, you must commit to paying off your loan in installments using electronic funds transfers. Part of your debt may be forgiven under certain circumstances, but only if you meet rigorous requirements. Schedule a free consultation with the tax experts at Ideal Tax if you have a significant amount of debt. Having them on your side will help you get the best possible resolution to your debt and IRS issue.

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