Afraid of the IRS?

By on August 12, 2013

Problems with irs

Taxes are ubiquitous. Since before 1776, citizens of the U.S. have been subject to taxation. Whether it’s the income tax adopted in 1861 or the Alabama 10 cent tax on playing cards, every American adult is required to pay up or face the consequences. For those with Irs problems, taxes can be a major source of anxiety. Neglecting to submit returns or underpaying can result in additional fees and interest, leaving them in even worse financial shape than when they originally couldn’t pay their taxes. In this article, we’ll give a few tips for avoiding tax debt problems in the first place as well as some suggestions about IRS problem resolution for those who are already struggling under the weight of IRS back taxes owed.

Prevention

Being in debt for a mortgage, car, or education is not the same as being indebted to the IRS. It is essential to avoid tax debt by making wise choices and remaining aware of tax obligations. When tax season comes, keep these things in mind:

  • Fill out your W 4 forms appropriately. Your projected annual income can be used to determine your tax obligation. Just make sure that the amount your employer withholds will cover your obligations.
  • If you’re self employed, make quarterly payments instead of paying at the end of the year.
  • Be completely sure that all the information you provide on your tax forms is accurate.
  • Get help if you’re not confident in your ability to prepare your own taxes. The U.S. is home to some 1.2 million tax preparers who can help.
  • File online, if it makes you feel more comfortable. It’s been an option in 36 states since 1989 and across the country since 1990.
  • File every year, regardless of your ability to pay. If you’re sure that you don’t have sufficient funds, contact the IRS to arrange a payment option and avoid failure to file penalties.

IRS Problem Resolution

For those who need help with tax problems, there are only five options for resolving debt. They can be used to stop the IRS from garnishing wages and levying on assets.

  1. Installment agreements take a variety of forms, but all accomplish roughly the same thing. Under an installment agreement, those who owe taxes can make monthly payments to the IRS.
  2. Partial payment installment agreements also offer indebted taxpayers the chance to pay the IRS in monthly payments, but at a reduced dollar amount.
  3. Offer in Compromise is a program under which debt can be settle for less than what is owed. A lump sum or short term payment plan must be made to pay off the IRS at a reduced dollar amount.
  4. Not currently collectible is an option afforded only tho those in extenuating circumstances. The IRS will voluntarily agree not to collect on tax debt for another year.
  5. Bankruptcy is a last resort option that discharges all tax debts.

Each of those programs for Irs problem resolution can be undertaken for payment on late taxes. Those owing less than $10,000 can pursue such arrangements on their own, but those owing more than $10,000 are strongly urged to contact a tax professional.

Owing money to the IRS is a serious situation that needs to be addressed head on in order to avoid further fees and interest. The best way to avoid tax debt is to be vigilant about your tax preparation. For those who are already indebted, there are options and help available.

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