COLLECTION ISSUES

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IRS collection issues, tax resolution, tax problems

Tax Resolution

If the IRS believes that you didn’t pay all your taxes, they will try very hard to retrieve the money they are owed. They may go to extreme measures to collect money from you, such as garnishing your wages and taking your property. This can be very nerve-wracking and cause you to lose sleep at night. However, you don’t have to go through this alone. In fact, hiring an experienced Tax Advisor will take the headache and guessing away and ensure the best possible outcome. Depending on your situation, each option is carefully weighed and only the most appropriate measures are taken on your behalf

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Extension of Time to Pay

If paying your taxes by the due date would put you under severe financial hardship, you may be eligible for an extension of time to pay, as part of the IRS Fresh Start Initiative.

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Offer in Compromise

It’s possible to settle your tax liabilities for less than the balance owed. In this agreement, a taxpayer and the IRS reach an agreement on the amount to pay based on ability, income, expenses and assets.

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Installment Agreements

If you cannot pay the tax bill full amount by the due date, you may set up an installment agreement with the IRS. This allows for more time to pay and/or catch up on back taxes.

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Currently not Collectible Status

If you can’t afford to pay any of your back taxes right now, you may qualify for not collectible status. The IRS may agree to stop their collection efforts for a certain time period, giving you the opportunity to get a handle on your finances.

Do not let your tax situation spiral out of control. Time is of the essence.

Extension of Time to Pay

If approved, the extension can give you 6 extra months to pay the tax amount shown on your return, or up to 18 months to pay a tax deficiency.

To be granted the extension, you must prove that you risk a significant loss if you pay your taxes on time.

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Undue Hardship

Per the IRS “The term “undue hardship” means more than an inconvenience. You must show you will have a substantial financial loss (such as selling property at a sacrifice price) if you pay your tax on the date it is due.”

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When to file

Filing for an extension of time to pay (and providing proper documentation) as soon as you become aware of your tax liability, on or before the due date of the upcoming return due date. If you are requesting an extension to pay a tax deficiency, you must file on or before the payment dues date.

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Extension Period

The extension (6 or 18 months depending on the circumstances) will not be granted if the IRS detects negligence, intentional disregard of rules, or intent to evade tax.

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Payment

Payment of taxes owed must be made before the extension period expires.

Installment Agreements

The IRS Fresh Start Initiative measures recognize that a more flexible payment process may be beneficial to taxpayers facing difficulties. In the case of an installment Agreement, penalties are lower but still will owe interests on the outstanding balance.

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Eligibility

You may request an Installment Agreement if you owe up to $50,000 in taxes.

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Payment Term

The maximum term for this payment option is 6 years.

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Payment Process

To benefit from the streamlined process, you must agree to monthly payment, directly debited from your account.

Offer in Compromise

The Offer in Compromise is your option if other payment options do not work. The IRS will accept what they estimate is the most they can expect to collect within a reasonable period of time.
While your offer is under review, other collection activities are suspended and any payment you make is applied to the tax liability. The IRS has 2 years to make a decision on your offer in compromise, failing which it will automatically be accepted.

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Eligibility

You must have explored all other payment options before submitting an offer and not be in an open bankruptcy proceeding, and you must be current will all filing and payment.

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Payment Option

You can opt to pay an initial 20% with your application then pay the remaining taxes due in up to five payments after your offer has been accepted.

Or you can submit an initial payment when applying and start paying the balance in monthly installments while the IRS reviews your offer. If accepted, your monthly payment plan will continue.

Currently not Collectible Status

The IRS determines you are not able to pay your tax debt at the time, but does not erase your bill. They only temporarily delay collection until your situation improves. Be aware that the Currently not Collectible status does not suspend interests and penalties.

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Eligibility

To be qualified as a not collectible account, you must prove that paying both your taxes and living expenses would put you under financial hardship.

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Statute of Limitation

The IRS may review your financial information regularly to determine if your situation improved, if you can get a loan or can sell assets. They can attempt collection for up to 10 years from the date of the tax assessment.