By Michael Rozbruch of Tax Resolution Services
With the IRS enforcement budget reaching a record $5.5 billion, more Americans than ever will need to know their options for income tax relief and IRS help to resolve IRS problems and avoid financially debilitating penalties and levies. If you owe back taxes or have several years of unfiled tax returns, here are a few tips to help you get the IRS tax relief you need.
You can run, but you can’t hide from the IRS. In 2008, the IRS collected $56.4 billion, $7.7 billion more than in 2006. And Congress has sent another $12.2 billion to the IRS this year resulting in a record $5.5 billion budget and hundreds of new IRS agents who have been hired to crack down on back taxes and delinquent tax returns. With the record federal deficit, Americans can expect more tax audits and increasingly aggressive collection tactics by the IRS. But the good news is the sooner you take care of your delinquent taxes, the less penalties and interest you’ll owe.
If you have unfiled tax returns or owe IRS back taxes, it’s important to figure out what the best IRS tax relief option is for your particular situation. It is also important to understand the process for resolving your IRS tax debt so you have realistic expectations and know which tax resolution strategies you can benefit from.
Tax relief from back taxes or unfiled tax returns tip #1:
Know that there is a solution to every problem.
If you have unfiled tax returns it is always better to file them - whether they’re a couple days or a couple years late — than to not file them at all. Filing any tax returns that are due as soon as possible can help you resolve IRS back taxes and reduce additional interest and penalties.
The longer you put off dealing with past due taxes, the more serious your IRS problems will be. Failing to file tax returns makes you vulnerable to potential IRS collection tactics, such as a levy on your wages or bank account, and may be construed as a criminal act by the IRS, punishable by one year in jail and $10,000 for each year not filed. Regardless of what you’ve heard, you have the right to file your original tax return, no matter how late it’s filed. So whether you have 1 year or 10 years of unfiled tax returns, know that there’s a solution to every problem.
Tax relief from back taxes or unfiled tax returns tip #2:
Get help to save time and money.
If you owe more than $15,000 in back taxes or have 3 or more years of unfiled tax returns, it’s important to hire an expert tax attorney or Certified Tax Resolution Specialist. An expert tax relief professional can help you save time, money, and frustration by educating you up front on what you need to do to resolve your specific IRS problems - while helping ensure you don’t pay a penny more than you have to.
Tax relief from back taxes or unfiled tax returns tip #3:
File your tax returns before the IRS files them for you.
If you don’t file your taxes, the IRS may file them for you. What many
people don’t know is that the IRS prepares substitute for returns in the best
interest of the government, which often results in the overstatement of what
taxpayers owe in back taxes and IRS penalties.
So even if you can’t afford to pay your tax bill, it’s important to file
your most recent tax returns, as well as any prior delinquent tax returns, as
soon as possible so you can have the chance to state what you truly owe. This
will ultimately save you money and help you avoid significant long-term
financial repercussions.
Tax relief from back taxes or unfiled tax returns tip #4:
Make the IRS an offer they can’t refuse.
If you qualify for an offer in compromise tax settlement, you can save thousands of dollars in back taxes, penalties and interest. Having expert representation can greatly improve your chances of successfully negotiating and winning tax settlements.
If you don’t qualify for an offer in compromise, there are other tax relief options including negotiating for your account to be placed in a "currently not collectible" status.
An expert IRS tax attorney or Certified Tax Resolution Specialist can help you explore potential tax relief options.
Tax relief from back taxes or unfiled tax returns tip #5:
Get on a plan.
If you can’t pay your back taxes in full but could potentially pay them back over
time, you can negotiate a reasonable monthly payment plan with the IRS. A tax attorney or Certified Tax Resolution Specialist will agressively negotiate an arrangement for the lowest possible monthly payment and options for making those payments.
Once an IRS Payment Plan (also known as an Installment Agreement) is established, the IRS will not enforce collection action, including the levy of bank accounts or wages, as long as you remain current with all filing and payment obligations. However, interest and penalties continue to accrue.
Additionally, a tax lien may be filed as part of the terms of the installment payment agreement, depending on the amount of the total back tax liability. While it is always in the best interest of the IRS to get a signed waiver, it may not be in the taxpayer’s best interest, so seek the advice of your tax attorney or tax resolution expert first.
The IRS is trying to put forth a kinder and gentler image in the face of the
current economic meltdown. But the fact remains that in order to get the tax
relief you need, you may need help filing those unfiled tax returns and paying the back taxes you owe. Remember that the key word in tax relief is relief, and you now have the power and the knowledge to make that happen.
For more information on how to resolve your back taxes and unfiled tax returns, visit www.taxresolution.com. For a free tax relief consultation or call 866-IRS-PROBLEMS.
Michael Rozbruch, one of the nation’s leading tax experts, is a Certified Tax Resolution Specialist (CTRS), licensed CPA in the state of Maryland and the founder of Tax Resolution Services (http://www.taxresolution.com/). He teams up with an expert staff of tax attorneys, CPAs, and tax relief professionals to help individuals and small businesses solve their IRS problems with tax liens, unfiled back taxes, offers in compromise, wage levies, tax relief, delinquent returns, tax debt installment plans, bankruptcy and protecting an innocent spouse from unfair tax burdens.
[Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information can not be guaranteed. Readers act on this information solely at their own risk. Neither HandelontheLaw.com, or any of its affiliates, shall have any liability stemming from this article.]
