Tax Problem Help: I've been writing articles on this blog for well over a year now, and I know some of you don't have the time to search through my archives to find the Tax Answers you need. I've done this once before, but I thought it would be helpful to write a quick article that lists solutions to common IRS debt issues. Consider this a sample platter of debt resolution services.
They Sent me Notice of Intent to Levy! What do I do?
Don't panic, your Revenue Office can smell your fear! There are several programs that the IRS and private companies offer to give you help with your tax problems, but they all have requirements that need to be met.
The Installment Agreement: This is a monthly payment plan that you setup with the IRS to pay off your debt.However, not all installment agreements are created equal. A payment plan that works for one kind of situation may not work out for yours. It's a good idea to talk to a tax professional, if you owe more than $10,000. Anything over that amount, and the IRS will try to pressure you into unaffordable payments.
The Offer in Compromise: When you hear a late night TV commercial talk about settling your tax debt for pennies on the dollar, this is what they’re talking about. This program sounds almost too good to be true. It is real, but it is also the most difficult to get. Only 2% of applicants for an Offer even get approved.
Currently Non Collectible: If you’re completely broke, or you’re on a fixed income that covers only the most basic living expenses you can qualify for this. Since you have no money or assets the IRS can go after; they temporarily suspend collection activities. The IRS does check up on you every year and if your financial situation changes, they will renew their collection efforts.
Innocent Spouse: Normally if you marry someone you also marry their tax debt. However there are exceptions to this situation and you can get out of a debt created by your ex-spouse. The tax debt has to be your ex’s, you can’t have filed jointly. You have to have not known about the debt. The debt can also be erased if there was abuse. If any of the criteria are met your tax debt can be completely erased.
Penalty Abatement: When you get in debt to the IRS interest and penalties start adding on to your debt immediately. In fact your debt will increase by about 25% each year. If you’ve suffered a catastrophic event in your life you may qualify to have the penalties removed from your debt. This can reduce your debt by up to 30%.
A light at the end of the Tunnel. Being in debt to the IRS makes you feel overwhelmed and alone, but now you know there’s a possibility for hope.
Have a happy weekend everyone. Don't forget, 19 Days until Taxes are Due!