You do have options for resolving unpaid taxes.
People get behind on their taxes for all types of reasons-divorce, illness, death of a loved one, bankruptcy, business failure, alcohol, drugs, etc. It really doesn’t matter how your tax debts came to be. The question is how do you fix them. Well, there are several options when it comes to resolving Unpaid Taxes.
Offer In Compromise
Did you know that the IRS settles thousands of taxpayer’s delinquent tax debts for just pennies on the dollar every year! Why don’t you know this? Well, its very simple. The IRS does not publicize the fact that the law allows many taxpayers to settle their old tax debts for a fraction of what they owe. What’s in it for them! They would rather just seize and levy everything you own. Who qualifies for the Offer In Compromise Program? Taxpayers who can demonstrate an inability to pay their delinquent taxes in a short period of time. Let us help you determine if an Offer In Compromise is the best option to resolve your tax problem.
Payment Plan
For those who don’t qualify for an Offer In Compromise, a Payment Plan may be the way to resolve your problem. Many people are able to pay their tax debts but just need a little time to pay it off. Negotiating payment terms you can live with is the key. Unfortunately, penalties and interest will continue to be charged on your outstanding balance as you pay the debt off. However, you may qualify to have the penalties removed or Abated. Interest on the principal tax debt, by law, very rarely if ever can be Abated. Let us help you determine if a Payment Plan is the best option to resolve your tax problem.
Penalty Abatement
The IRS charges penalties for just about everything these days-filing late, paying late, underpaying your estimated tax payments if you’re self-employed, negligence if you make mistakes in preparing your tax return, etc. etc. etc. Its ridiculous how many different types of penalties exist. The original intent of penalties was to punish taxpayers who didn’t comply with the law and to keep compliant citizens from falling out of line. However, the main reason penalties exist today is that they’ve become a huge revenue generator for the government. Many citizens could pay off their tax debts if it weren’t for penalties that double, triple, or quadruple their tax bill in so short a time. Well, there is relief for many taxpayers from IRS penalties. The law allows taxpayers who have “reasonable cause” to file for a Penalty Abatement. Let us help you determine if a Penalty Abatement is the best option to resolve your tax problem.
Bankruptcy
Did you know that taxes in many cases can be discharged or wiped out in a bankruptcy. Many people, as well as attorneys, are not aware of this! For those who qualify, bankruptcy often times can be the solution to resolve their crushing tax problems. However, not everyone qualifies to wipe out their tax debt in bankruptcy. Certain rules have to be met first. If you file bankruptcy and do not meet the rules, you will be shockingly surprised after your bankruptcy is over when you discover that you still have a tax problem and the IRS is in hot pursuit. Proper pre-bankruptcy planning is key to determining if bankruptcy is or can be a viable solution. Let us help you determine if a Bankruptcy is the best option to resolve your tax problem.
Running the Statute of Limitations
Did you know that the IRS is limited in the time it has to pursue collection of delinquent taxes against you? Normally, the IRS has 10 years from the date the taxes are assessed (generally near the filing date) to collect any outstanding taxes, penalties, and interest. Once the 10 years passes, you no longer legally owe the debt. As with all tax law, there are exceptions to this rule. The 10 year period can be extended in several ways. Often the IRS will try to collect delinquent taxes, either through ignorance or deliberately, after the statute of limitations has expired. You must inform the IRS that they no longer have the legal authority to collect the delinquent taxes. Running the Statute of Limitations is often an inexpensive way to resolve your delinquent tax debt. Let us help you determine if Running the Statute of Limitations is the best option to resolve your tax problem.
Lien Subordination
Often taxpayers can’t get home equity loans to pay off their old tax debt because the IRS has filed Federal Tax Liens against their property. These Liens not only become public record but also show up on your credit report, thereby preventing you from getting a loan to pay off the very taxes that created the Liens in the first place. It seems like a Catch-22 situation. If you have significant equity in your home to pay towards your tax debt, there is a way out. A Lien Subordination allows the IRS to reduce its Lien priority and give your bank superior Lien priority protecting their loan in exchange for the proceeds from the loan. This way, the IRS gets the equity it had a Lien against and your bank is protected by their superior Lien. If you have enough equity to full pay your old tax debt, many banks won’t even require a Lien Subordination to protect their loan. They will simply pay the loan proceeds directly to the IRS. Once paid, the IRS will Release the Federal Tax Lien. Let us help you determine if a Lien Subordination is the best option to resolve your tax problem.
Innocent Spouse Relief
When married couples sign a joint tax return, they both become liable for the taxes on that return. If at some future time the IRS audits that joint tax return and determines that additional taxes are due, both spouses become liable for the taxes. Unfortunately, these additional taxes are sometimes due to the misdeeds or fraud committed by one spouse. Sadly, the Innocent Spouse also gets saddled with the tax debt. Innocent Spouse Relief was designed to alleviate unjust situations where one spouse was clearly the victim of fraud perpetrated by their spouse or ex-spouse. If you qualify for Innocent Spouse Relief, you may not owe any tax. Let us help you determine if Innocent Spouse Relief is the best option to resolve your tax problem.
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