Posts Tagged ‘Back taxes’
5 IRS Tax Relief Programs to Restore Financial Freedom
“In this world, nothing can be said to be certain, except death and taxes.” -Benjamin Franklin
I learned that a tax debt relief program exists for every IRS tax problem, giving back more taxpayers their financial freedom. In this post, I provide you information about 5 IRS tax relief programs that can provide you a Fresh Start for 2020.
Most people don’t go around bragging about their IRS problems. But that doesn’t mean they don’t exist.
Owing back taxes is way more common than you think with the number of delinquencies continues to go up while the ability to pay is decreasing.
According to Michael Rozbruch, a recognized entrepreneur and the founder of Michael Rozbruch’s Tax and Business Solutions Academy, more taxpayers have IRS tax debt right now than ever!
14 million taxpayers are in the IRS’s collection division that has a tax debt large enough to call for professional representation. 19 million people owe the IRS $391 billion right now.
It is very important that you don’t ignore an IRS issue and hope it will go away. The IRS will catch up with you and the penalties, interest, and fines will have only grown bigger!
If you are one of the 19 million people who owe the IRS back taxes, check out these 5 IRS tax debt relief programs aimed at resolving various tax problems (without hiring an IRS tax lawyer).
Grab one of a few NO COST consultations with TheCPATaxProblemSolver to see if you qualify for any of these IRS tax help programs Book Your Free Consultation.
Offer In Compromise (OIC)
This is one of the IRS tax relief programs that gets the most attention because it really gives you the best chance at a Fresh Start. An Offer In Compromise is an agreement between you and the IRS and the settling for an amount less than the full amount owed. It is an option for those who are not able to pay the past due amount in full, or if paying the full amount will cause financial hardship or leave you in a state of financial distress.
To qualify for an OIC, you must have filed all past tax returns & must be current with federal tax withholding or estimated tax payments for the present year.
The IRS will take the following facts into consideration once you file for an OIC:
- Ability to pay
- Total monthly/yearly expenses
- Assets and equity
When an OIC is approved by the IRS, there are two payment methods available. The first is a “Lump Sum” in which you pay the offer amount in one lump sum or in a payment installment of 5 or fewer payments within a set period of months. The second is a Periodic Payment Offer in which payments are made in 6 or more monthly installments and must be paid within 24 months.
If the IRS agrees to the OIC, you are required to timely file and pay all future taxes over the subsequent five years. If you do not abide with the set terms of the OIC, the IRS may consider the OIC to be in default. In this event, the OIC is null and void and the IRS will demand immediate full payment of the original tax balance plus penalties and interest.
When you cannot pay your tax debt in full immediately, you might be able to set up a monthly payment plan or Installment Agreement (IA). If you agree to pay the full amount, you may be able to reduce the interest owed and any other fees.
Folks may be eligible for an online payment plan if they owe less than $50,000 in combined individual taxes, interest, and penalties. You must have filed all of the necessary tax returns. You must also make the minimum required payment by the set due date. Any future tax refunds will be applied to your debt until it is paid in full.
A penalty abatement may be granted for the following penalties:
- Filing Late
- Paying Late
- Failure to deposit
Requests for penalty waivers may be filed if you meet the following criteria:
- Before the penalty has been assessed by the IRS, you can file a “penalty non-assertion request”
- After the penalty has been assessed, you can request a penalty abatement via a written letter to the IRS.
- Once the penalty has been paid, you can request a refund using Form 843. However, you must file this request within 3 years of the return date or within 2 years of paying the penalty.
You may request penalty abatement for the following reasons:
- Reasonable cause
- Statutory exceptions
- Administrative waivers
- Correction of an error on the behalf of the IRS
As many married taxpayers opt to file a joint return, this filing status leaves both partners liable for any taxes, penalties, and interest due in the event of a divorce. However, the spouse who feels they are being wrongly held liable may file for “Innocent Spouse Relief” in the event that one of the involved parties failed to report any income or claimed false credits or deductions.
Innocent Spouse Relief may be granted if you meet the following criteria:
- There are erroneous items on your joint return.
- You can prove that you did not know there was an error on the form at the time it was filed.
- You were coerced into signing a joint return or were unaware of the joint filing
Currently-Not-Collectible (CNC)/ Financial Hardship
Should you and the IRS agree that you do owe the amount in question, but you are unable to pay in full due to your financial situation, you may be able to apply for Currently-Not-Collective (CNC) or Financial Hardship status. In order to qualify, the IRS must determine that you cannot pay your cost of living expenses and your taxes at the same time.
When your necessary living expenses exceed your monthly income, the IRS will approve your CNC request and will not try to collect any past debts or issue any levies against you while you are in CNC status. However, the IRS has the power to add interest and penalties during that time, as well as to withhold any pending tax refunds and apply them to the amount owed.
Call Keith Jones, CPA TheCPATaxProblemSolver toll-free TODAY at 844-888-1040 to determine if you are eligible for a Fresh Start and get on the road to financial freedom! You Will Sleep MUCH BETTER TONIGHT!