Tax Solutions to Various IRS Tax Issues and Problems
There are many ways the IRS allows individuals to settle or reduce their tax debts. Every year there are thousands of people who cannot pay their taxes. The IRS (and many states) has made sure there is a way for every person of every tax problem and financial situation to resolve their tax issues with the IRS. Below are do-it-yourself guides to resolving various types of tax problems.
Common Back Tax Solutions
- How to Pay Back Taxes General guidelines that can help you become more efficient and save you time and money when resolving your unpaid taxes.
- Offer In Compromise Settle IRS back taxes for a fraction of what is owed if you can prove you meet strict IRS specifications. When you hear the saying settle for pennies on the dollar, this is how it is done.
- File Back Taxes The sooner you file tax with the IRS the better. The IRS doesn’t prosecute voluntary filers. File before the IRS finds you.
- Installment Agreement Setup a payment plan with the IRS to pay the total amount owed over a specified period of time. This is the most common method of settling back taxes. It allows people to pay in installments over a certain period of time. When everything is paid off, more than the originally amount owed is paid.
- Partial Payment Installment Agreement Requesting a partial payment installment agreement allows you to pay off the tax amount owed with monthly payments just like the regular installment agreement but the payments do not pay the entire amount of back taxes owed. This method is typically available to those taxpayers that cannot make the payment amounts required with the original type of installment agreement.
- Shot Term Payment Extension Requesting a payment extension can be fairly easy if you plan on paying off the entire tax amount owed within a period of 30 to 120 days. The amount of time you can receive depends on how far along in the computerized notice process you already are.
- Abatement Eliminate penalties and interest if you have legitimate reason for falling behind and not paying back taxes owed on time. There are hundreds of acceptable reasons for failing to pay your taxes on time. If your reason is legitimate enough for the IRS they will most likely eliminate most of the penalties and possibly a portion of the interest.
- Delay Collections If you just need more time to pay and want to delay the IRS collection system you can easily get extensions. The IRS works on a formula, understand how this works so you can delay them from taking action against you and allowing you time to pay off your back taxes.
- Currently Not Collectible Prove to the IRS that you do not have the means to pay your back taxes with your current financial standing. Show you do not have assets worth them attempting to levy. Put collection activities on hold and update IRS annually on your current financial situation.
- Tax Professional Tax Professionals can be the best option for many people when dealing with a lot of money and complex tax problems. Tax professionals have many more tools and know the “IRS Formula” better than most and have the best chances for solving issues with back taxes. The most common types of tax professionals used to resolve tax problems are tax attorneys/tax lawyers, CPAs and enrolled agents.
- Pay Tax Amount in Full This may sound obvious, but even if you cannot pay the full balance you may be able to come up with the extra cash by thinking outside of the box a little.
- Filing Unfiled Tax Returns Understand how to handle your unfiled tax return. Some important things to keep in mind when filing your return and required forms to submit a late return.
- Innocent Spouse Relief Get Relief from your spouse or ex-spouse’s tax liability that you are being assessed back taxes for.
- Options When You Can’t Pay On Time So you are filing your taxes and you realize you did not set aside enough money to pay the IRS. The IRS expects you to pay, so what do you do?
- Amending a Tax Return to Reduce Tax Debt Tax Filing mistakes happens and the IRS knows this. They make it fairly simple for individuals to amend tax returns they have filed and even reduce the amount of taxes they owe by claiming additional deductions.
- Appealing a Tax Ruling Steps to appeal an IRS ruling. It is your taxpayer right to appeal any IRS ruling. If the appeal goes through or not, it is your advantage when you are in trouble with the IRS.
- Bankruptcy to Discharge IRS Debt Why it is not a good idea to use bankruptcy to resolve IRS tax debt problems. Many better solutions exist for tax debt.
- Filing and Paying Old Taxes How to go about filing and paying old taxes. When you have old taxes it is important to file them as soon as possible and then find out the best way for you to pay any money owed to the IRS.