Taxes are serious business. Beginning in the years before the birth of our country, the colonies were subject to taxation by Britain, and beginning in 1861 they began paying federal income tax. Though taxes have long been a part of life in America, they are still a source of anxiety for millions of citizens. It is hardly surprising, since the IRS has a remarkable number of weapons in its arsenal for dealing with taxpayers who underpay or fail to file. If you’re one of the large number of citizens dealing with federal tax problems, here are a few of the most important things for you to know about federal tax debt relief.
Before levying, the IRS is legally obligated to notify taxpayers of their debt and to give them an opportunity to contest it. At this time, you are legally allowed to file for IRS abatement. If the Internal Revenue Service sends you a corrections notice that is in error, you have sixty days to notify send an IRS abatement letter, stating that you disagree with the notice and request that they abate the assessment. If the IRS abatement letter is successful, you will be discharged of the debt about which you were contacted.
I Owe Federal Taxes. Now What?
If you know for a fact that the debt about which you’ve been contacted is legitimate, you have options besides accepting the levies. To be considered for any of these options, you’ll need to present your case to the IRS, proving that you are unable to pay what you owe. If you owe between $10,000 and $25,000 it is recommended that you meet with a tax professional for help. The options are as follows.
1. Debtors can seek to set up an installment agreement, under which they develop a monthly payment plan.
2. Debtors can set up a partial payment installment agreement allowing them to develop a long term payment plan to repay debts at a reduced amount.
3. The IRS can agree to the “not currently collectible” program under which the IRS agrees to wait for a year to collect on tax debt.
4. The debtor can file for bankruptcy, thereby discharging all debts
5. The debtor can file for offer in compromise, a program allowing debtors to settle debts for less than what they owe after making an initial payment.
What if I Owe Federal Taxes and Don’t Work Something Out With the IRS?
The IRS can levy upon your assets. Sometimes they will garnish wages, requiring your employer to send a large percentage of your wages directly to the IRS. Though they have to seek permission from a federal magistrate, the IRS can levy upon a house in which the taxpayer lives. These levies don’t just cover the amount owed, but any additional fees and penalties incurred by late payment or failure to file.
Dealing with the IRS can be intimidating, but the most important thing to remember is that there are options and help available. If you owe federal taxes, get in touch with a professional who can help you review your options and find a plan that works for you. For more information see this: federaltaxproblem.org