I'd like to thank everybody who has sent me questions about their tax debt problems. I'd like to share some of the more common questions so that you can avoid tax debt.
I've been told that you can get your IRS debt wiped out if you were divorced and the debt was because of something your ex did. Is that true?
Yes, it's called Innocent Spouse Relief. It can be claimed under certain circumstances such as: the debt had to have primarily been the ex-spouses, you didn't know about the debt, or your ex-spouse was abusive to you. Under those circumstances, you can apply for Innocent Spouse and have your tax debt removed.
I have an IRS tax debt and I have no problem paying it off, but I don't think I should pay the interest or penalties. What can I do to get out of paying those?
There's nothing you can do about IRS interest. The only way to pay less interest is to pay the debt off quicker. Now, you can get the penalties (and in rare circumstances, interest that has already accrued) removed from your IRS debt under special circumstances that I refer to as catastrophic events. Some of the situations that the IRS will take into consideration are: drug and alcohol abuse; a death in the family; a life threatening disease or medical condition; and embezzlement or theft for businesses.
I'm in a monthly payment plan with the IRS. If I skip a month, but make it up the next month, will the IRS do anything to me?
The IRS will do plenty. If you miss a scheduled payment, the IRS considers you to be in default of your payment agreement. They immediately send you an "intent to levy" notice, and you have 30 days to appeal your payment arrangement. If you default a second time, the IRS will not renegotiate a payment plan, and you will become the victim of an IRS wage or bank levy.
Can the IRS just come into my house and take whatever they want? Isn't that illegal?
The IRS doesn't just show up at your door. They do give you multiple chances to find a way to deal with your debt, so when they show up ready to seize your stuff, do not be surprised.
IRS revenue agents are able to get a "writ of entry" from a Federal Judge in order to enter your home and seize your assets. And just so you know, it is very easy for the IRS to get that writ, all they have to do is have the judge sign it.
Now you have the smoking gun... Use it!
Labels: Back Taxes