Getting delinquent tax help can be a difficult process. There are many companies and individuals that claim to have the best resolution practice. In truth, a lot of these resolution sources will not be very helpful, and may even charge a great deal for their services. At Tax Relief Network, our resolution team puts customer satisfaction at the top of our priority list when resolving delinquent tax issues. Our tax resolution process is separated into two parts. During the investigation phase, our team undergoes a very detailed investigation of our client’s financial situation, getting the master file from the IRS and using a questionnaire to ensure that any details of the client’s life are discovered. After the investigation phase, our case analysts will go through the results of the investigation and let you know exactly what services Tax Relief Network offers for your specific case so that any fees associated with our services are known before we begin working. After you decide to move forward into phase two, our tax resolution team will start work to negotiate with the IRS and resolve your delinquent tax issues.
Taxpayers searching for delinquent taxes help should consider working with Tax Relief Network. If you are in debt to the IRS or a state tax authority, there is only so much time before collection actions begin. The IRS will begin by placing a lien on your accounts, which will damage credit ratings and make it harder to borrow money, get a mortgage or rental agreement, and other loans or credit cards. Should an individual still fail to pay their income taxes when facing a lien, the IRS will continue to levy actions to the point of seizing income and assets.
In many cases, taxpayers that try to handle the situation on their own will often overlook important parts of the filing process and their own eligibility for certain programs offered. The problem taxpayers face is that once the IRS becomes involved with their overdue tax debt, they allow too much time to pass before seeking help or taking the necessary steps to solve the problem. In this ‘downtime’ a taxpayer could see huge penalties accrued on their account and end up owing a lot more than they otherwise would have.
It is incredibly important to seek help immediately, formulate a plan in dealing with the tax debt, and then move forward accordingly. Even if a taxpayer does not know what to do, silence only worsens their case with the IRS. It’s advised that at the very least a taxpayer should reach out to the IRS and communicate their difficulties in paying their debt and explain that they’re currently in the process of searching for a solution. This way the IRS or Revenue Agent can note that the taxpayer is aware of the problem and taking the right steps in handling it.
The short answer is yes. As stated before, seeing a tax professional is incredibly important in identifying the different options a taxpayer has when trying to settle his debt. No tax settlement will be entertained by the IRS unless all the past returns have been filed. This means if a taxpayer has outstanding tax returns that they have yet to file, they must first file these before beginning correspondence with the IRS.
Generally, the IRS is not going to destroy your financial situation because you do not have the money to pay your taxes. With a professional and the right course of action, the IRS will work out an agreement with the delinquent taxpayer that works for all parties involved.
When dealing with the inability to pay outstanding taxes, the IRS has multiple different installments that can give relief to a taxpayer. It’s important to note that it’s recommended the taxpayer pay off as much as they can of their debt before moving forward with a payment plan. The payment options go as follows; an installment agreement, an offer in compromise, or a temporary delay of collection.
Installment Agreement: Essentially, this is a monthly payment plan that allows a taxpayer to pay off the entire debt owed in certain increments over a longer period of time. In this way, the taxpayer pays off the debt much like they would a loan. The time can range of payment can range anywhere from 3-6 years, dependent on the amount. If the amount owed is $50,000 or less, there are ways apply for the installment agreement online.
Offer in Compromise: This type of payment plan is basically a single settlement. After consulting with the a tax professional, the taxpayer then pays off an entire lump sum that equals less than the amount owed. This amount is decided by the IRS after assessing the taxpayer’s account thoroughly. However, the taxpayer has to meet a specific criterion for this type of payment plan and it’s usually fairly difficult to meet eligibility. Take a taxpayer that is eligible for an installment agreement into consideration, if they are indeed so, they will not be further eligible for an offer in compromise. That’s why it’s important to consult professional help to determine eligibility. If the taxpayer is eligible, the offer in compromise can be incredibly beneficial because it forgives part of the outstanding amount.
Temporary Delay of Action: This isn’t so much a payment plan, but more a hold on the payments entirely. What will happen is the IRS will tag the taxpayer’s account as ‘not collectible’ and will wait for the taxpayer’s financial situation to improve. It’s important to note that this type of ‘payment plan’ will not forgive any of the outstanding amount and will sometimes tack on penalties and interest while the taxpayer comes up with the money. In some cases, the delay of the process goes without penalty and allows the taxpayer more time to resolve the issue.
As a general note, the IRS wants to help those facing economic hardship. That’s why it’s important to not only do your own research, but to make sure that all your cards are in order and that you know exactly what options you’re eligible for.
Again, it is highly recommended that if you’re looking to appeal your amount owed, you first see a professional to determine whether or not you are in the ‘right.’ A few instances in which you have the right to appeal are as follows:
-You believe that there has been a mistake and the amount you owe is wrong in relation to your taxes filed. Just as well, an appeal can be made stating the taxpayer does not owe any money at all.
-If a taxpayer’s refund request is not granted
-If you’ve received an adverse letter ruling from the Taxpayer information and Education section of the department
There are many different programs and methods of dealing with outstanding tax debt. To put it simply, there is a possibility that you will be able to make payments on the amount owed over an extended period of time. There is no guarantee of this, as cases are judged and assessed individually.
However, if a taxpayer does indeed decide to move forward with this method, they will have to complete a financial statement. Depending on this statement, the IRS will then decide whether or not the taxpayer is eligible for a payment plan and what type of plan they’re going to be issued. When making payments to the IRS, all payments must be electronic.
For one, know your tax deadlines. As a taxpayer it is your duty to not only pay taxes but to also know the responsibilities that you have. If you haven’t filed before, filing electronically is greatly recommended as not only is it easier, but the systems used can often flag mistakes that would have otherwise been sent through. As with most things, it’s important to see a professional tax consultant. They know best and will not only help you file properly, but ensure that you receive that correct back taxes and that you’re not at risk for delinquency.
A few general rules of thumb:
1. Open all mailed documents from the IRS. If you’re receiving something via mail from the IRS, chances are it is highly important. Even if it’s just information detailing due dates and the correct way to file, it’s important to be as knowledgeable as possible about the tax filing process.
2. Keep track of everything. Whenever you file your taxes, always make records of what you’re filing. If you’re going to send it in via mail, pay for certified mailing so that you can prove it was sent on a certain date.
3. Notify the IRS of any address or contact changes. You don’t want important IRS information being sent to an address that you’re no longer at. Even something minor sent to an incorrect address can become a nightmare to deal with as it goes on to accrue penalties and interest simply because your address has not been updated in the system.
There’s a possibility that if the delinquent taxpayer is being noncompliant, the IRS will issue an assessment and then go on to issue a tax warrant. This tax warrant covers the initial outstanding amount and then the interest and penalties that have accrued throughout the process. If the tax warrant is not paid within a certain amount of time, for whatever reason, then the case is filed through the county Superior Court. Then there’s a possibility that liens come. A tax warrant basically establishes a lien against personal property, or any asset that could be used to pay off the debt owed. This includes property of any sort, automobiles, wages, and even bank accounts. Once the case is filed, it then becomes legal for the IRS to take your property or put a hold on your bank account – they can even go as far as to take the money from the bank themselves after a respective amount of time has passed.
First and foremost, penalties and interest will accrue on top of the outstanding amount. Once the IRS decides that your taxes are ‘delinquent,’ they’ll start tacking on penalties that will worsen the longer the outstanding amount remains unpaid. The order of the process then progresses if you do not pay the amount or respond to letters or notices that your account has changed to delinquent. A Revenue Agent is then assigned to your specific account and they’ll reach out to you in order to resolve the issue.
To put it simply, delinquent taxes refer to any amount of tax debt owed to the IRS. When there’s a delinquent account, it means the due date for the tax return or whatever established liability has passed and yet the amount owed remains unpaid. In the case that you have delinquent taxes, it’s important that you act as quickly and swiftly as possible in handling the situation, as there are major repercussions to not paying your taxes.
Yes, a Fresh Start Initiative settlement can be reassessed even after it has been paid. The IRS requires that you finish your payments for the settlement and continue to file and pay all taxes for five years after completing the terms of your settlement package. If you fail to do so, the IRS will likely pursue the full amount of taxes originally owed.
One problem many taxpayers in debt to the IRS face is keeping up with the changes in programs like the IRS Fresh Start Program. There are many details in the Installment Agreements, Offers in Compromise and other resolution options that can be tough to remember. Some of the changes enacted by the IRS may not impact all individuals in debt and it’s difficult to know whether you fall in that group or not. The new updates to the Fresh Start Initiative are yet another set of rules to keep straight when trying to resolve tax problems.
Thankfully, taxpayers can keep the whole process relatively simple by hiring a company whose entire job it is to keep these facts straight and report them accurately to clients. Tax Relief Network focuses on staying up to date on the various changes the IRS makes to programs like the Fresh Start Initiative so that their customer base is never left in the dark and receive all the guidance they need to settle their back taxes. This kind of service can help taxpayers to save money, extend deadlines, or find their way into the best tax debt resolution plan to meet their needs.
Anyone with questions on the Fresh Start Initiative or other IRS programs would do well to contact Tax Relief Network and get quality help to ease their financial troubles. Call now for more information and a free consultation!
Every case is unique, but as a general rule it’s not uncommon for the Fresh Start Initiative process to take several months. There have been cases that can require a year for completion.
There are varied limitations on who can receive this tax penalty reprieve, and some of the most common include:
• Those who are self-employed must provide proof of a 25 percent drop in their net income.
• Taxpayers can’t earn more than $200,000 per year for married couples filing jointly or $100,000 for single filers.
• Your tax balance must be below $50,000 at the end of the year to qualify.
There are various other limitations, but a tax professional from Tax Relief Network can guide you through the ins and outs of the process and help you determine which course of action is right for your financial situation.
Another feature that has been transformed through the Fresh Start Initiative program is the process of a federal tax lien. Under these new terms, you have the right to file for a withdrawal if you’ve paid off your tax debt and fulfilled other certain requirements. The IRS also increased the amount you owe in order to get served with a tax lien. Currently, this amount is $10,000, but there are cases in which a taxpayer may be served a tax lien even if their outstanding balance is less than $10,000.
There are numerous considerations that go into determining Fresh Start Initiative eligibility. Whether it be future income concerns or bankruptcies under your name, a current tax lien or defaulted installment agreement, there are many aspects that go into the IRS’ deliberations.
If your individual circumstances mean that forced collection may cause financial hardship, the Internal Revenue Service may be more willing to consider an offer in compromise.
Beyond these three main facets, you must be up to date on your tax filing. Regardless of whether or not you can pay your tax debt, it’s important to always file. This will help you avoid a failure to file penalty, and make it more likely that the Internal Revenue Service will accept any offer made. You also must not be involved in any open bankruptcy proceedings and will be expected to describe your financial situation in great detail.
Receiving approval for an offer in compromise can be difficult; they’re rare and can take months to approve. It’s important to consider hiring a tax preparer or other tax professional to help arrange the details of such an offer to ensure a better chance of approval.
If the IRS assumes they will be unable to collect the amount owed in the foreseeable future, this may improve your chances of eligibility. They will consider whether they would be able to collect more money through forced collections than they would through the offer in compromise; if the former option will collect them more, the offer in compromise is not likely to be accepted.
In order to prove you do not have the ability to pay your full outstanding balance, the IRS will combine your net equity in assets with your projected monthly disposable income—the value is what is known as reasonable collection potential or RCP. If even projected future income will fall short of what you need in order to pay your debt in full before the collection statute of limitations expires, they are likely to deny your offer.
This compromise is only offered if the IRS determines the full debt to be unpayable. This offer will only be accepted if the IRS believes the money gained from it will be greater than or equal to the amount they could realistically expect to receive from a taxpayer. There are various stipulations that come along with this rare offer.
If you choose to file an offer in compromise through the OIC program, the government will assess your unpaid tax and analyze whether or not you’ll be able to pay back your full debt. If they deem your current and future income insufficient to feasibly handle your outstanding balance, they may agree to settlement that’s lower than your original overall tax debt. The IR will assess your eligibility based on the following three qualifications:
An Offer in Compromise (OIC) is an IRS tax settlement option given to taxpayers who are unable to pay the full amount of taxes they owe. The OIC program can be a useful tool for taxpayers that have found their tax debt to be insurmountable. If a financially distressed taxpayer can prove that paying off the entirety of their debt would cause undue financial hardship, the IRS may consider reassessing the amount of debt owed.
If you cannot pay your tax debt in full, you can apply for a payment plan with the IRS, known as an installment agreement. An Installment Agreement is granted to taxpayers who would like to pay off their debt in smaller monthly increments. This tactic can help reduce penalties like tax levies from unpaid taxes, and the amount paid may be the full debt amount or a lessened value.
These agreements can be negotiated, but ultimately the amount owed each month is up to the discretion of the Internal Revenue Service. There are a variety of different installment agreements: a streamlined installment agreement, partial-pay installment agreements, and stair-step installment agreements. Regardless of installment agreement, taxpayers approved for this type of payment plan must be sure to never default or miss a payment.
If you owe more than $50,000 and you can’t reasonably pay your tax debt off within six years, you’ll need to work with a tax professional to devise an installment agreement the IRS will approve. You’ll propose a payment plan that offers the IRS the amount of your monthly income minus your essential living expenses. It’s important to begin sending in monthly payments after presenting your offer; the IRS is more likely to approve an installment agreement if you’re making viable steps towards settling your tax debt. There are numerous ways to pay, but installment agreements do come with fees.
You can make on-line payment, send in a money order or check, pay by credit card, and over the phone, but some of these options are better than others in terms of fees. Currently the fee for an installment agreement can range up to $120, but choosing on-line payment can decrease this fee amount. Direct Debit payments pull money directly from your checking account each month, and this can be a wise route for taxpayers who want to avoid missing a payment unintentionally. So long as the account is open and filled with sufficient funds, you won’t need to worry about making a payment on time.
If you owe more than $50,000, you’ll have to submit both Form 433-F and Form 9465. Keep in mind that a tax debt with an outstanding balance of over $50,000 cannot be completed online; it must be done through mail or in-person.
There is also a small business installment payment agreement for companies that owe less than $25,000 in back taxes. This is known as an In-Business Trust Fund Express installment agreement. You must currently have employees to qualify; if approved, you’ll have 34 months to fully pay off your tax debt. If your debt is under this threshold but over $10,000, you must pay through a Direct Debit installment agreement. This can be a great option for a start-up business that has found itself in trouble during its first few years of operation.
Keep in mind that you cannot default on your payment agreement; should you miss a payment, you may face a failure-to-pay penalty and the Internal Revenue Service could revoke your installment agreement.
The original IRS Fresh Start Program was put into place in 2008 to help citizens resolve their tax problems and aid those in dire straits, and it underwent some growth back in 2012. When they re-tooled the system, the IRS made things easier for those struggling with unemployment or hard financial times. For example, the penalties for failure to pay taxes on time may be waived for those that have been unemployed for a period greater than 30 days under the guidelines of the IRS Fresh Start Program. Qualified individuals who apply can seek a six month extension to pay, with no fear of penalties.
The two major tax debt payment plans that were simplified under the Fresh Start Initiative include the Installment Agreement and the Offer in Compromise program.
Once known as the Fresh Start Program, the Fresh Start Initiative is not a program in itself, but rather a series of changes to current IRS Collection procedures and policies. It’s designed to help both individual taxpayers and small businesses attempting to settle an overdue tax liability.
In theory, the Fresh Start Initiative has features that make it easier for taxpayers to pay back their outstanding balances and avoid tax liens, or have existing liens withdrawn.
Tax Relief Network is not just a tax resolution company that can provide delinquent tax assistance. Our company also provides tax preparation and bookkeeping services to help our current and new customers prevent future tax problems. If you are in need of help and are looking for a trusted and professional company to help you immediately with delinquent tax issues, call us today and learn more about how our tax resolution team can help you.
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