Tax Relief for Back Taxes
08/05/08 11:30 Filed in: Tax Relief
A difficult scenario for many people is when they are
in search of tax relief. For most people, this means
they have gotten behind on their IRS taxes and are no
quite sure what to do next. The IRS collections
department doesn't seem to make your life any easier.
Yes, they act as if it's a newer gentler collections
team, but make no mistake...They have only one
mission, which is to collect money! However for
obvious reasons, simply paying back any owed
delinquent taxes is not as easy as it sounds. After
all, if a person owes $40,000 in back taxes, where
exactly are they supposed to get that from? In the
past, many would refinance their home and pay their
back taxes that way. But in the current economy, with
foreclosures dooming so many lenders, refinancing
one's home is becoming impossible. Meanwhile, the IRS
continues sending out threatening letters, makes
visits to one's employers, and garnishes wages and
levies bank accounts. So how is one to receive tax
relief?
A difficult scenario for many people is when they are
in search of tax relief. For most people, this means
they have gotten behind on their IRS taxes and are no
quite sure what to do next. The IRS collections
department doesn't seem to make your life any easier.
Yes, they act as if it's a newer gentler collections
team, but make no mistake...They have only one
mission, which is to collect money! However for
obvious reasons, simply paying back any owed
delinquent taxes is not as easy as it sounds. After
all, if a person owes $40,000 in back taxes, where
exactly are they supposed to get that from? In the
past, many would refinance their home and pay their
back taxes that way. But in the current economy, with
foreclosures dooming so many lenders, refinancing
one's home is becoming impossible. Meanwhile, the IRS
continues sending out threatening letters, makes
visits to one's employers, and garnishes wages and
levies bank accounts. So how is one to receive tax
relief?
Well if you're behind on your federal taxes, the first thing you need to do is come to the realization that you must do something, and do it now! Inform yourself of the collection process and of T.B.O.R.(Taxpayer Bill of Rights.) IRS Collection Agents count on the fact that most people are scared of the IRS and don't know their rights. Granted, if you owe federal taxes, then you should be scared because the IRS has enormous powers, but that doesn't mean you have to give up on life and bow down to them either. You should also familiarize yourself programs that are available to taxpayers to help them catch up on their arrears. There is no perfect fit for everyone, but perhaps if you have a good understanding of what you are facing and what your options are, you may be able to determine which tax relief program you qualify for.
There are a couple things you need to understand first however. First of all, if you are applying for a tax relief plan, you will need to be current with your tax returns. So ask yourself this, have you filed all your returns or are there some years that are missing? If you have some returns that are unfilled, then you will either need to prepare your own taxes, or have a CPA prepare your taxes. Obviously, our clients have their taxes done for them by our CPA's. If you are in a situation where the IRS is after you, then frankly you should probably have a tax representation firm that has CPA's on staff handle this for you, including preparing your returns. Once your taxes are all filed and current, then you can begin the negotiation process. This may include pulling master files to see exactly what the IRS has on you, including penalties and interest. Once you have determined where you stand, you may want to consider filing an appeal to abate some or all of your penalties. Keep in mind, there are many required forms and time lines that must be met since you're dealing with IRS bureaucracy, but you can do this! During this process, you should also determine whether you are likely to qualify for an Offer In Compromise, Installment Agreement, or some other payment arrangement to settle your debt and finally receive the tax relief you are seeking.
Well if you're behind on your federal taxes, the first thing you need to do is come to the realization that you must do something, and do it now! Inform yourself of the collection process and of T.B.O.R.(Taxpayer Bill of Rights.) IRS Collection Agents count on the fact that most people are scared of the IRS and don't know their rights. Granted, if you owe federal taxes, then you should be scared because the IRS has enormous powers, but that doesn't mean you have to give up on life and bow down to them either. You should also familiarize yourself programs that are available to taxpayers to help them catch up on their arrears. There is no perfect fit for everyone, but perhaps if you have a good understanding of what you are facing and what your options are, you may be able to determine which tax relief program you qualify for.
There are a couple things you need to understand first however. First of all, if you are applying for a tax relief plan, you will need to be current with your tax returns. So ask yourself this, have you filed all your returns or are there some years that are missing? If you have some returns that are unfilled, then you will either need to prepare your own taxes, or have a CPA prepare your taxes. Obviously, our clients have their taxes done for them by our CPA's. If you are in a situation where the IRS is after you, then frankly you should probably have a tax representation firm that has CPA's on staff handle this for you, including preparing your returns. Once your taxes are all filed and current, then you can begin the negotiation process. This may include pulling master files to see exactly what the IRS has on you, including penalties and interest. Once you have determined where you stand, you may want to consider filing an appeal to abate some or all of your penalties. Keep in mind, there are many required forms and time lines that must be met since you're dealing with IRS bureaucracy, but you can do this! During this process, you should also determine whether you are likely to qualify for an Offer In Compromise, Installment Agreement, or some other payment arrangement to settle your debt and finally receive the tax relief you are seeking.