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Taxes After Death: What You Need to Know About Filing and Paying Taxes for a Deceased Person

Filing taxes for deceased loved ones is one of the unexpected tasks that can go along with managing final affairs. Many people are uncertain about what goes into filing taxes for a deceased person because they aren’t sure where the responsibility falls. 

The first thing to know is that the IRS does not cancel tax debts upon death. The hard reality is that IRS penalties and interest can accrue if unfiled returns are allowed to linger without being addressed after a person had died. If you’re handling the estate of a loved one, it’s important to know how to file a tax return for a deceased person.

Yes, you do need to file taxes on behalf of a deceased person if you have been tasked with managing an estate, because tax obligations don’t evaporate when a person passes away. Both the IRS and state taxing agencies will hold the estate of the deceased liable for filing and paying taxes on time. If you are the representative of an estate, you must file taxes in the exact way that the deceased person would have. That means filing both state and federal taxes for the year of death. In most cases, the estate representative will need to file an IRS Form 1040. When filing taxes for a deceased person, you must report all income up to the date of death. Family members sometimes discover that a loved one has not been consistently filing and paying income taxes. If this is the case, you’ll need to go back to take care of all unfiled taxes before you can claim refunds or request relief for tax debt.

What Happens if a Deceased Person Owes Taxes?

If you discover that taxes are owed after filing a deceased tax return, it’s necessary to pay the outstanding balance. The consequences of not filing or paying state taxes and federal taxes do not go away just because someone is deceased. If taxes are not paid, the IRS and state taxing authorities may decide to pursue collection from the person’s estate. If unpaid taxes go back several years, the IRS may conduct an audit. In some cases, the IRS will actually attach an estate lien to a person’s property.

Do You Have To File Taxes for a Deceased Person?

Yes, you should file a tax return for a deceased person if they had any reportable income or assets in the year that they died. This includes both earned income and income from investments. While you may not be required to file a tax return for the deceased if the person made less than $12,400 (under 65) or $14,050 (over 65), it’s still a good idea to file because there are various credits and deductions that could actually provide the estate with a refund.

In some cases, the surviving spouse or representative of the estate will have to file a separate return from the deceased person’s personal return that represents the estate. This is determined by the size and nature of the estate. For instance, most estates that receive $600 in income annually will require you to file an IRS Form 1041. Additionally, there is the matter of estate tax for larger estates. If an estate is liable for the estate tax, the estate administrator must file IRS Form 706 within nine months of the estate owner’s death.

Who Should File Taxes for Someone Who Has Passed Away?

Typically, the default is for surviving spouses to take care of filing taxes for deceased spouses. If a joint tax return is filed, the responsibilities of tax preparation and payment of any owed taxes fall on the spouse. If a person is not married at the time of death, the executor or estate representative will be tasked with filing the deceased person’s federal and state income tax returns for the year. 

If a joint return is filed, the surviving spouse shares this responsibility. As far as who signs the tax return for a deceased person, the person who prepared the return should be the one to sign it. If a spouse is filing a joint return, they will sign the return as the surviving spouse. In all other cases, the executor or estate representative will sign the return.

How Long Should You Keep a Deceased Person’s Tax Records?

The minimum amount of time that you should keep a deceased person’s tax records is three years. Generally, returns are only subject to audits going back three years. 

However, there is the rare case where the IRS will go back as far as six years into past returns. For this reason, it’s recommended that you hold on to all tax records belonging to a deceased person for at least seven years. Keeping the tax records of a deceased person can be even more critical than holding on to your own tax returns, because trying to obtain records on behalf of someone else in the event that you need to supply evidence of tax records during an audit can be very difficult. You may not have access to stored documents or passwords that are needed to obtain copies of tax-related documents.

What Happens to a Tax Refund Check for a Deceased Person?

If you are claiming a tax refund on behalf of a deceased person, the IRS requires you to fill out Form 1310: Statement of Person Claiming Refund Due a Deceased Taxpayer. In most cases, you’ll save yourself a big headache if you request a refund in the form of a paper check. If direct deposit is set up using a bank account that is not in the name of the deceased taxpayer, there is a good chance that the bank will reject the transaction. The person claiming the refund must indicate that they intend to distribute the tax refund according to applicable state laws in the state where the deceased person resided. It may also be necessary to supply a court certificate documenting that you are the legally appointed representative of the deceased’s estate to prove that you are entitled to receive the deceased person’s tax refund under state law.

Get Help for Taxes After Death

Filing taxes for deceased family members can be a difficult and overwhelming task due to complicated, ever-changing tax laws. In addition to reporting income, a surviving spouse or estate manager must also figure out tax obligations for things like IRAs and retirement accounts. What’s more, many people are surprised to discover that they can inherit tax problems when they inherit estates. If you discover that an estate owes taxes, many of the same tax relief solutions that apply for all taxpayers can be used to pay down tax debt using an Installment Agreement (AI).If you’ve been left to handle a final tax return for a deceased person, Tax Group Center is here to help you get everything squared away. Our tax experts and CPAs are backed by 30 years of experience. If necessary, we can work with the IRS on your behalf to take care of any lingering tax debts or penalties that are tied to a deceased person’s estate. Contact us today if you have any questions about managing taxes after death.

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What Is the Minimum Income To File Taxes?

Determining What You Owe the IRS: What Is the Minimum Income To File Taxes?

If you had a relatively low income this year, you might be wondering if you have to file taxes. First, don’t assume that making a modest income means the IRS isn’t expecting a tax return from you. If you skip tax preparation due to a misunderstanding, you’re still subject to all of the penalties that apply for unfiled returns. That’s why it’s essential to know the minimum income to file taxes.

Income tax minimum varies by filing status. The IRS has different income minimums for taxpayers based on both filing status and age. If you’re filing as single, the income threshold for owing income taxes is much lower. The threshold is also lower for people under the age of 65 than for people over that age.

What Is the Minimum Income to File Taxes?

More than 40 percent of Americans aren’t required to file taxes because they don’t meet the income minimum. However, the actual minimum income amount can look different from person to person within that group of millions of people. Here’s how it breaks down for 2020 incomes:

  • Filing Single: $12,400 (under 65)/$14,050 (over 65)
  • Married Filing Jointly: $24,800 (both spouses under 65)/$26,100 (one spouse over 65)/$27,400 (both spouses over 65)
  • Married Filing Separately: $5 for all ages
  • Head of Household: $18,650 (under 65)/$20,300 (over 65)
  • Qualifying Widow(er) With Dependent Child: $24,800 (under 65)/$26,100 (over 65)
  • Filing as Self-Employed: $400

You also have some other factors to consider before you shove your tax return into a drawer without sending it to the IRS. While the minimums above will apply in most cases, there could be an additional factor in your case that compels you to file. For instance, a self-employed person who makes below the threshold for their filing category should still file a return. People who purchase health insurance from state or federal marketplaces should also file. Lastly, you may be required to file taxes this year if another person claimed you as a dependent on their return.

What if none of those conditions apply to you? The truth is that you might still want to file your taxes even if you don’t technically have to file this year because you might benefit from some tax perks. For instance, you could receive an unexpected refund if you file, which you won’t receive if you have any unfiled returns. It can be beneficial to file a return every year just to stay on track and keep records of your income. Additionally, the amount you had withheld from your paychecks during the year may be returned to you in the form of a tax refund after you file. This is what’s known as a refundable credit. Not filing your taxes this year could mean that you’re not claiming things like the Additional Child Tax Credit, Health Coverage Tax Credit, or American Opportunity Education Credit. In other words, not filing is like waiving a free check from the IRS!

How can you estimate if you’ll get a refund this year even though you had a very low income? Generally, it’s wise to file your taxes if your employer withheld federal taxes from your paychecks. The same goes if you paid your quarterly estimated tax payments.

Who Doesn’t Pay Income Taxes?

Ultimately, the total income you make in any given year determines your tax obligation. The thresholds above for the various filing categories are what the IRS uses to determine who is required to pay income taxes in any given year. The very basic definition of someone who won’t be required to pay income taxes is a single filer under the age 65 making less than $12,400 per year. When looking at the chart above, you may have noticed that the threshold for all people filing as married filing separately is just $5. No, that’s not a typo. The IRS essentially provides no threshold for people who choose to file as married filing separately.

Do I Need to File a Tax Return?

The only person who can really answer this question is you. First, you’ll need to take a look at your paycheck records for the year to determine if you reached the threshold for your age and filing status. It’s critical to file even if you’ve only made a dollar above the threshold, because not filing when you make a low income opens you up to all of the same penalties for not filing at any income level.

Should You File Your Taxes This Year Even If You Didn’t Make a Lot of Money?

Even if you didn’t meet the minimum income to pay taxes, it’s still generally a good idea to file. The bottom line is that you’re probably entitled to a number of deductions and credits that could result in a nice refund. You also want to look at the whole picture to make sure that you’re accurately reporting your entire income. The full formula for determining if you made the minimum to file taxes includes your filing status, federal income tax withheld for the year, and your gross income.

Some people assume they don’t need to file taxes based on their paycheck and later realize that other earnings they made throughout the year do qualify as income. If you made relatively little income, filing your taxes will likely be a very quick process that only includes a few tax forms. Taking just a little time to file your return is a much better option than dealing with a surprise tax lien down the road.

Final Thoughts: Getting Your Taxes Ready If You Meet the Minimum Income to File Taxes

Not being able to pay what you owe in taxes is never a reason to avoid filing your taxes at any income level. The IRS checks all tax records from around the country to calculate income. That means that the IRS will know how much you made in any given year even if you don’t report your earnings. If you’re worried that filing will create tax problems, you should know that not filing will create even bigger problems. Fortunately, there are many options for tax forgiveness and payment plans that allow you to take care of a tax debt without incurring interest and penalties. The team at Tax Group Center helps taxpayers prepare and file taxes to avoid penalties every day. We also negotiate with the IRS on behalf of our clients when taxpayers can’t pay their tax bills in full. If you’re trying to determine if you meet the minimum income to file taxes, we can take a look at your situation to let you know where you fall. We may also be able to identify some potential credits and refund opportunities that will have the IRS writing you a check this year. Contact us today for a tax consultation with Tax Group Center’s team of tax experts and CPAs.

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Are Political Contributions Tax Deductible?

How Giving Impacts Your Taxes: Are Political Contributions Tax Deductible?

If you gave to political candidates last year, you might be wondering if campaign contributions are tax deductible as you gear up for this year’s tax preparation. If you routinely deduct contributions made to charities on your tax returns, you may assume that the process works roughly the same when you make political donations. 

This is not accurate. It’s essential to distinguish between donations made to charitable organizations and political contributions before getting to work on your unfiled taxes. Only one can actually reduce your tax liability for the year!

Are Political Donations Tax Deductible?

No. “Political contributions deductible status” is a myth. The IRS makes it clear that you cannot deduct contributions that you make to any organizations that aren’t qualified to receive tax-deductible donations. This doesn’t just mean that donations made to candidates and campaigns are excluded from being tax deductible. It also extends to political action committees (PACs). Only donations given to registered 501(c)(3) organizations can qualify for tax-exempt status.

Are Political Contributions Tax Deductible for Businesses?

If you own a business, you understandably have a strong interest in how laws and policies will impact your industry. Unfortunately, that doesn’t mean that the IRS bends the rules to allow you to benefit from your political contributions. If you’re wondering if campaign contributions are tax deductible for your business, the same rules apply. You cannot claim political deductions on your tax return for your business. More specifically, you cannot claim any amount paid in connection with influencing legislation as a business expense. This rule is so strict that the law even prevents political candidates from deducting the money they spend out of their own pockets while running for elected office!

Where does that leave you if you made large political contributions last year? If you were hoping that contributions made to political causes would help to offset your tax bill for the year, it’s time to make a plan to avoid the penalties and interest that could accumulate if you can’t cover your tax bill in full. The good news is that there are many other expenses that you paid for throughout the year that many qualify for deductions this year. This is especially true if you take itemized deductions instead of the standard deduction.

If I Volunteer for a Political Campaign, Can I Deduct My Expenses?

We’ve already covered the fact that money donated to political campaigns will not be tax deductible. However, you may be wondering how the IRS treats the time you donate to candidates. Are donations to political campaigns tax deductible if those donations are volunteered time? The rules are the same for donations of both money and time. So the answer is no: any time you donate to a political candidate, political campaign or political action committee (PAC) is not considered a tax-deductible donation by the IRS.

Is Supporting the Presidential Election Campaign Fund Tax Deductible?

You may have noticed that you have the option to contribute to the Presidential Election Campaign Fund when you complete your tax return. The maximum that you can set aside for this contribution is $3. You might be wondering if that $3 deduction is tax deductible since it’s displayed on your tax form. It is not. Checking the box to make this contribution has no impact on your taxes or deductions for the year.

What Are the Political Contribution Limits for the Year?

While you won’t be getting a tax deduction for your contributions to political candidates and campaigns, there’s a good chance that you still want to throw your support behind a candidate or party. You should know that there are caps for every American when it comes to political donations. Here’s what you can legally give each year without violating any campaign finance laws:

  • Up to $2,800 per candidate per election
  • Up to $10,000 combined for all state, district, and local parties
  • Up to $106,500 to a national political party
  • Up to $5,000 per year to PACs

The Federal Election Commission (FEC) sets these caps, but the IRS will have questions for you if you go above them. Be sure to keep good records of your political donations if you routinely give large amounts of money to politicians and causes, because the IRS strictly enforces these limits.

How Can I Give to Tax-Deductible Causes for Tax Purposes?

While giving to a political cause isn’t going to help you lower your tax burden, there are still countless opportunities to give to charitable causes. From soup kitchens to animal rescues and humanitarian organizations, your options are endless.

The only detail to remember is that a charity must be registered as a 501(c)(3) organization for your donation to be legally tax deductible. Under the IRS’s rules, a donation that you give to an individual or group without that 501(c)(3) status won’t count on your taxes. 

It’s also important to note that purchasing goods from not-for-profit organizations won’t count toward tax deductions. For instance, a local church might be having a bake sale to pay for a new roof following a bad storm. You might purchase a slice of carrot cake during the sale to throw your support behind the effort, but that purchase will not be considered a tax-deductible contribution due to the fact that you received a “good” in exchange for the money you gave.

Final Thoughts on Political Contributions and Your Taxes

Are political contributions tax deductible? Unfortunately, you’re not going to be able to turn your political giving into a tax gain this year. That means that you’re out of luck if you were counting on the money you gave to political causes last year to help you lower a tax debt. The good news is that you have many legitimate options for avoiding the consequences of not filing or paying taxes, including things like installment agreements and debt forgiveness.

If you have any questions about figuring out your tax debt while factoring in charitable giving, Tax Group Center is here to help you get on the right page with the IRS. While using deductions to lower your tax burden may help you, it’s also crucial to understand that getting your return filed quickly can help you to avoid severe penalties like liens and levies. Our team of tax professionals and CPAs can help. We’ve been working with the IRS on behalf of our clients for 30 years. If you have tax problems that have grown too serious or confusing to handle on your own, simply contact us today for a consultation. Tax Group Center will work hard to get you on the road to tax relief. Having your taxes prepared by tax experts can help you maximize deductions of all types to reduce your tax liability for the year in full IRS compliance.

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What Happens If a Deceased Person Owes Taxes?

What To Do if a Deceased Person Owes Taxes

One of the most sensitive topics tax professionals must face is helping people handle taxes for family members or loved ones who have passed away. 

Family members often wonder if filing taxes for decedents is necessary. The answer is that death doesn’t erase taxes; a tax obligation still stands even if a person passes away. In fact, this is one of the first orders of business to take care of to avoid “surprise” debts that the estate could be responsible for going forward.

If you need to file taxes for someone who has died, you may be wondering where to start. In some cases, you may need to request copies of tax records from the IRS to determine how many years back you’ll need to go when filing taxes on behalf of the deceased. If you are the executor of an estate, you must essentially take on the tax burden as if it’s your own. 

But let’s take this one step at a time. First, we’ll explore the path typically followed when filing taxes for a deceased parent or loved one.

Filing Taxes on Behalf of a Deceased Person

Taxes for a recently deceased person should be prepared and filed using generally the same methods required for any taxpayer. This means reporting all income earned up until the day of death. All relevant deductions should also be claimed to reduce the overall tax burden the same way you would for any filing. Here are some basics to know:

  • You may need to file IRS Form 4506-T: Request for Transcript of Tax Return to obtain tax records of the deceased person.
  • Form 1040, W-2s for withheld income, and 1099s for untaxed income may be needed.
  • The decedent’s income will count from January 1 of the year they passed until the day before they passed.
  • Write “deceased” next to the taxpayer’s name when filling out tax forms.
  • When a person is deceased, the tax deadline is automatically pushed to April 15 (tax day) of the year after the death.
  • A surviving spouse can still file a joint return for the last year that the deceased was living.

It will be necessary to use Form 1041: U.S. Income Tax Return for Estates and Trusts if the deceased individual is leaving any estate with taxable income. You’ll also need that form for any estate with at least $600 in gross income during the tax year in question.

One issue that family members often come across when attempting to prepare current tax returns for deceased individuals is that unfiled taxes remain from previous years. In this case, it will be necessary to file any unfiled returns on behalf of the deceased. While it may seem odd, it’s important to file tax returns from previous years on behalf of the deceased individual to avoid allowing IRS penalties and interest to accumulate against the estate.

What Happens If a Deceased Person Owes Taxes?

If you discover that your deceased loved one owes money, you’ll need to pay what is owed. If you don’t have the funds immediately available from the estate to do this, you may be able to work out a payment plan with the IRS. Similarly, you may find that the deceased is actually owed refund money. The IRS has a special form called IRS Form 1310: Statement of a Person Claiming Refund Due a Deceased Taxpayer that allows you to claim the refund.

Filing Taxes for a Deceased With No Estate

Typically, the executor of an estate is tasked with filing taxes for the deceased. But not everyone passes away with an estate in place. If no executor has been named, tax responsibilities should be handled by a surviving family member. If there is no estate, the tax situation can get a bit tricky. The responsibility to pay owed taxes may fall on your shoulders if you’re the representative of the deceased. To determine what is owed, it may be necessary to contact the IRS to get tax records dating back a few years. Here’s a look at some of the possible taxes that may need to be paid:

  • Federal taxes
  • State taxes
  • Local taxes
  • Self-employment taxes
  • Business taxes

How long do you have to worry about taxes owed by the decedent? The IRS Collection Statute Expiration Date (CSED) for all federal taxes is 10 years, even if the person who owed the taxes is no longer living. With that said, each state has its own statute for owed taxes. The expiration date for state taxes ranges from three years to 20 years, and in a handful of states, state tax debts never expire. 

It’s also important to know that the IRS can still audit a person who has passed away, although the worry of an audit generally disappears after three years.

Don’t Ignore Tax Debt After Death

Many families assume that tax obligations evaporate because the person who owed the money is no longer living. Unfortunately, this can set you up for years of pursuit by creditors while penalties pile up. The IRS will not automatically “forgive” a tax debt just because a person is no longer living. If there is an IRS debt after death with no estate, the IRS will take all possible measures to collect that debt before it expires. Expect the IRS to contact beneficiaries of the will to try to recoup tax debts. This often includes children and siblings, and it is also common for both close and distant relatives to hear from the IRS when a debt is pursued. When settling debts on behalf of someone who has passed away, the IRS should be considered the primary creditor above other creditors.

Final Thoughts on Handling Taxes After Someone Has Died

None of us like to think about what happens if a deceased person owes taxes. However, this is a reality that can land on your plate if a family member passes away with unsettled IRS debts. Filing taxes after someone has died can be a confusing process, even if you usually handle your own taxes with no issues. In truth, it is one of the most complicated tax situations a person can encounter. This is why bringing in a tax expert is so important for peace of mind.

At Tax Group Center, we help people take care of any lingering tax obligations that loved ones may have left behind. Let us help you use the correct IRS forms when filing taxes for someone who has passed away. In addition, we can assist with obtaining tax records to ensure that no unfiled tax returns or lingering debts are going unnoticed by you. If a tax debt is owed, our team can help you explore tax relief options for paying the debt over time in smaller installments. Tax Group Center has more than 30 years of experience with IRS issues. If you have any questions about handling taxes after death, contact us today.

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What to Do If You Forgot to File Taxes

What To Do if You Forgot to File Taxes

The thought of owing late taxes can be terrifying if you’ve never dealt with the IRS before. If you just realized that you forgot to file taxes by the tax deadline, you may even be expecting the IRS to show up on your doorstep. But how worried should you really be?

You don’t have to panic if you’ve forgotten to file your taxes, but you do need to act quickly. Every day that you sit on this problem is one more day for the consequences of not filing or paying taxes to pile up! If you’re unsure about what to do to catch up with the taxes you owe, get expert help with tax preparation to get things moving before you run into bigger problems. Let’s cover the steps you should be taking if you’ve skipped a tax deadline.

What You Need to Know After Missing a Tax Deadline

What happens if I forgot to file my taxes? If you forgot to file taxes last year, you are not out of options. The IRS and your state tax agency want you to get up to speed with your unfiled returns. 

The first order of business is to confirm that you were required to file a return for the tax date that has passed. You may not be required to file if you made below a certain threshold for the year, but you may still want to file to see if you qualify for any tax credits. If you are required to file, just file your state and federal taxes using forms for the year you missed. You should also be prepared to pay any money that you owe. If you’re unable to pay what you owe in full, you can explore payment options that will help you to avoid IRS interest and penalties.

Not everyone owes tax money. You may actually be getting a refund even if you filed late. However, you can’t wait too long; you only have three years to file before the IRS keeps your refund. You can also lose your ability to claim tax credits if you don’t file soon. 

In short, you won’t receive any refunds until you’re fully caught up with all returns.

The IRS Might File Your Tax Return for You

Most people don’t realize that the IRS actually has the right to file your tax return on your behalf. This is far from a courtesy, though. Using something called a substitute return, the IRS will file your taxes for you without adding in tax credits, giving you the “worst deal” as the default by only using the standard deduction and one exemption. 

They do this using information gathered from W2 forms, 1099 forms, and third-party sources to identify your income for the year. You will have a 90-day window to dispute what the IRS claims you owe in taxes based on their assessment. However, the IRS can move forward with collection efforts based on their tax assessment if you don’t respond during that window. Call a tax expert if you feel stuck!

Does the IRS Charge Fees for Late Taxes?

Yes, the IRS begins charging fees if you miss your filing deadline for taxes. The first fee is something called the failure-to-file penalty. The total that you’ll be charged if you allow this fee to accumulate is between 5 and 25 percent of your total tax bill. That fee jumps to a maximum of $135 if you still haven’t paid your tax bill 60 days after the deadline. 

Bear in mind that these fees are actually the least of your worries if you’re allowing a tax bill to go unpaid. The IRS can come after you with liens, levies, and wage garnishments to try to collect what you owe. Failing to cooperate with the IRS can even lead to criminal prosecution in some cases. The good news is there’s really no need to let it get to that place when the IRS offers so many options for debt payments and forgiveness.

What Happens When You Forget Something on Your Taxes?

Sometimes you make an honest mistake. For example, it’s not uncommon for people to forget to complete a 1099-R. If you forgot to claim 401k withdrawal on taxes, you can go back and fix the mistake using something called an amended return that you can mail to the IRS. The IRS will need to see the amount you omitted from your original return because it could change your amount of taxable income for the year.

If you have several income streams, you may realize that you forgot to file a W2. You will need to file an amended return that documents the income on the unfiled W2 if you’ve forgotten to file. The process will require you to go back and recalculate your new adjusted gross income for the year with the new total that includes your missing W2. You may have to also submit amended versions of other forms if they are impacted by your new W2 totals. 

For most people, the benefit of getting that missing W2 in as quickly as possible is that you’ll be getting a refund back. If you end up owing money, amending your W2 promptly may save you from fees and penalties.

The Best Strategy: File Even Though You Can’t Pay What You Owe

If you failed to file your taxes by the deadline because you didn’t think you could pay what you owe, it’s time to develop a better strategy. The IRS will know what you earned for the year even if you don’t file your taxes. They use sophisticated software that compares employer records with worker records to track who isn’t paying taxes. That means that the IRS will be contacting you if you didn’t file. It’s better to simply get ahead of the situation by filing if you can’t pay what you owe in taxes. This will enable you to work with a tax professional to apply for relief options like an Installment Agreement (IA), Offer In Compromise (OIC), Currently Non Collectible (CNC), and more.

Who Can Help After I Forgot to File My Taxes?

If you forgot to file taxes last year, you have more options than you realize! At Tax Group Center, our team of tax professionals helps people get their late taxes filed every day. We’ll help you work with the IRS to get a clean slate. Let us help you find what you need to get your late taxes filed as quickly as possible. If you’re unsure about how many years back you need to go with catching up on late taxes, we can help you get a copy of your tax records to see how far back you need to file. If you’re dealing with potential tax debts, we’ll help you explore relief options. We want to help you handle every step the right away to avoid time-consuming, expensive penalties. If you forgot to file taxes, reach out to the Tax Group Center today!

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Seeking Relief? Here’s How the IRS Decides Your Ability to Pay

How The IRS Decides Your Ability to Pay

How the IRS Decides Your Ability to Pay When You Owe Taxes

If you owe the IRS money, you’re probably constantly thinking about it. Worrying about your tax debt can be stressful and overwhelming if you know that you don’t have a way to pay it off. 

Many taxpayers are surprised to learn that the IRS actually provides a little bit of leeway for people who are unable to pay what they owe. The IRS does have some strict requirements when it comes to determining who isn’t in a position to pay a full tax bill, however, so take a look at the information we’ve compiled below if you’re considering asking the IRS for debt relief. Don’t forget that relief options are only available if all past returns are filed!

The Form 433 Series: A, B, and F

The IRS uses a series of Form 433s to determine eligibility for relief based on a taxpayer’s ability to pay. You may hear the full series referred to as a Collection Information Statement (CIS). While the 433 F is the most important form for most taxpayers, you may need to pay attention to other documents in the series depending on how you earn income. 

Form 433 A is used exclusively for self-employed individuals, while Form 433 B is only used for tax debts tied to a business. The IRS uses these documents to determine if you qualify for a pay-collection alternative. Form 433 F can be used by either wage earners or self-employed individuals; it’s the most commonly seen Collection Information Statement.

It All Comes Down to IRS Form 433 and Your Collection Information Statement

You will most likely use Form 433 F if you need to ask the IRS for help with paying off a debtThe good news is that you can usually get this two-page form filled out and submitted relatively quickly with help from a tax professional. 

What is Form 433 F used for? You can look at this form as the IRS’s eligibility metric for determining if you qualify for debt relief. The IRS is essentially looking at your income and assets to determine how realistically you can pay back what you owe.

The IRS would rather get something from you. From their perspective, it’s better to begin collecting some money from you as opposed to spending time and energy tracking you down for late payments. In fact, the IRS has a variety of payment options that will allow you to pay back what you owe over time. Qualifying for relief may mean having debt reduced or frozen. The bottom line is that it’s worth seeing if you qualify for debt relief if you’re struggling to get a tax bill paid in full.

Preparing the Form 433 Series

You aren’t just “filling in documents” when completing your Form 433 series. Every piece of information you provide must be backed up by documentation! Be ready to pull up bank statements, pay stubs, information related to any businesses you own, and much more. Your ability to qualify for relief hinges on your willingness to provide honest, accurate information. You’ll jeopardize your eligibility if you provide false or inaccurate information to the IRS on any of your Form 433 documents. 

Now, let’s cover what to expect as you fill out your form.

How to Fill Out Your Form 433 

Starting the process is fairly simple regardless of which form you use. You’ll need to fill out your name, address, and Social Security number. Business ownerswill need to supply EINs and information regarding the size of their businesses.

The IRS will also want to know about any lines of credit or asset sources you have. This will help them to determine if you have the ability to pull funds or funding from someplace to cover your debt. Additionally, the IRS will be inquiring about any properties you own. This includes primary residences, investment properties, and vacation homes. Be prepared to supply information regarding purchase price, current value, and equity. You will also be asked to share information about credit cards and current balances.

If you owe other personal or business assets, this is the time to talk about them. The IRS will ask you to detail anything like a boat, car, or insurance policy in your name. If you’re a business owner, the IRS wants to know about things like inventory, assets, liabilities, employees, and pending lawsuits. 

The IRS also wants to know about your employment status. You’ll need to share the name of your employer, your payment schedule, your wages and the amount that’s removed for taxes each pay period. If you have non-wage household income, the IRS will need to know about that. This can include things like child support, unemployment payments, Social Security payments, and passive income. 

Showing the IRS Your Ability to Pay

Sections 5 of Forms 433 A and 433 B and Section H of Form 433 F are where you’ll list all of your costs of living and/or business expenses to help the IRS determine if you can realistically pay down your tax debt. Don’t embellish this section, as the IRS may ask for proof regarding every expense you list in this section down the road. 

If you’re a wage earner or self-employed individual filling out Form 433 F, the IRS will want to know about:

  • Food
  • Clothing
  • Personal care
  • Transportation
  • Health insurance
  • Medical expenses
  • Utilities
  • Rent/mortgage
  • Childcare costs
  • Court-ordered payments

If you’re a business owner filling out Form 433 B, or a self-employed individual filling out Form 433 A, the IRS will also want to know about: 

  • Net business income
  • Rental income
  • Wages 
  • Gross receipts
  • Inventory costs 
  • Repair costs
  • Dividends 

The IRS will use information regarding payments and assets from the top of your form to determine what these living/business expenses mean for your ability to pay. It uses a formula based on standard cost of living to ensure that you aren’t stuck paying more than is “reasonable” under the law. That means that you’ll likely qualify for relief if your monthly living expenses combined with your tax debt would tip you over the edge.

Submitting Your Collection Information Statement

Once completed, your forms can be sent to the IRS. There’s no need to send any supporting documents along to the IRS with your application. If the IRS needs proof or clarification, they will contact you.

What Happens After You Send Your Forms?

The IRS will review your documents once they are received. You should hear back shortly regarding the decision. The good news is that the IRS will stop all collection activity immediately if it’s determined that you qualify. However, make sure you’re addressing the potential for future liens or collection activities with a tax professional. 

Keep in mind that the IRS does have the right to review your case in the future to determine if you’re still eligible based on changing financial circumstances. 

Get Help With Debt Relief From Tax Professionals

The team at Tax Group Center helps taxpayers successfully complete Collection Information Statements every day! If you’re unable to pay your taxes, we can help you submit applications for relief options like an Installment Agreements(AI), Currently Non Collectable (CNC) status, and Offer In Compromise (OIC) along with your statement. Reach out today to explore options for reducing or freezing IRS tax debt!

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How Much Do I Owe the IRS? 5 Ways to Find Out

How Much Do I Owe The IRS

Your Question Answered: How to Find Out How Much I Owe the IRS

“How much do I owe the IRS?” 

If you’re asking this question, time is probably already of the essence. There’s no hiding a tax debt from the IRS, even if you haven’t filed taxes for the year you owe payment for yet! That’s why finding out how much you owe is the first step to getting help with IRS debt.

For most people, reaching out to the IRS directly to ask about an unpaid tax bill doesn’t exactly seem like a “friendly” option. Fortunately, you have several ways to confirm the amount you owe to the IRS. There’s no changing the fact that it’s important to know exactly where you stand with past due payments if you’re ready to get IRS tax help. 

Below, we’ve put together five ways to find out how much you owe the IRS.

1. Go Online

In 2016, the IRS introduced a tool to make it easier to find out how much you owe. The Account Information portal lets you see what you owe for each tax year. The second benefit is that it’s free to access your information. You’ll also be able to glance at your payment history if you’re trying to catch up with tax bills.

You will need to register to use it, which means providing extensive verification information. The registration process can take up a significant chunk of your time. In addition, you may run into technical road bumps if you’re missing any information, don’t know the answer to something, or make a mistake. 

What exactly do you need to register online with the IRS’s tax payment portal? Buckle up for a lengthy process! The IRS will ask you for details like your Social Security number, mailing address from your last tax return, filing status, mortgage information, student loan information, telephone number, date of birth, auto loan information, and more. The IRS also pulls a credit report on you as part of verification. 

Keep in mind that the IRS’s online payment portal is only available from 6 a.m. Monday to 9 p.m. Saturday, as well as Sunday from 10 a.m. to midnight EST. If you use accessibility software such as a screen reader, magnifier or voice command software, please consult the IRS’s accessibility guide, as the portal has compatibility issues with some accessibility tools. 

2. Give the IRS a Call

Placing a call to the IRS is an intimidating prospect for many, because they’re concerned about saying the wrong thing. But you won’t have to complete a long registration process just to make contact the way you do when accessing the online portal. You can inquire about your IRS balance by calling 1-800-829-1040 (toll-free) and speaking with a representative who can pull up your file. Its hours of operation are 7:00 a.m. to 7 p.m., so put some time aside to make the call, as it’s not uncommon to be on hold for up to 30 minutes.

3. Visit an IRS Office

Many don’t realize that you can actually walk into an IRS office to ask about your balance. The question of if you’d want to do this without some type of representation is a different story. If this seems like a good fit, simply use the IRS’s portal to locate the Taxpayer Assistance Center Office closest to you.

4. Request a Transcript by Mail

If you’re curious to know what your tax situation looks like from the side of the IRS, requesting a transcript may be your best bet. You can view your transcript online or request a physical copy be mailed to you. To view your transcript online, you’ll need an IRS account. You can request a transcript be sent to you by mail whether or not you have an IRS account, butyou’ll need to provide your Social Security Number, your date of birth, and the mailing address used on your latest tax return. You can expect the transcript to arrive within five to 10 days if the request is received and processed.

5. Seek the Help of a Tax Professional

If any of these options for finding out how much you owe the IRS seem overwhelming, you have another course of action. Many people seek the help of a tax expert or lawyer right away because they don’t want to take any chances.

A tax professional will get you answers regarding how much you do or don’t owe the IRS right away. You’ll also receive guidance for how to address your tax debt, whatever it may be, in real-time. In some cases, that might mean appealing the IRS’s assessment of what you owe. You may even be in a position to look at IRS debt forgiveness programs if you qualify for installment payments, reduced debt, or frozen debt.

Final Thoughts: How Do I Find Out How Much I Owe the IRS?

If you owe the IRS money, it’s time to act! Every day that you let the problem linger could cause you to miss out on relief options. What’s more, things like interest, penalties, liens, and levies could be stacking up without your knowledge if you’re somehow missing letters, calls, and other communications from the IRS. You should also be careful about assuming that the IRS hasn’t discovered that you owe tax funds simply because you haven’t filed your taxes. The IRS uses sophisticated software to detect when taxpayers have unfiled tax returns floating around. The bottom line is that there are many benefits to figuring out what you owe, getting caught up with returns, and making a plan to get your IRS debt settled.

If you’re ready to find out if you owe taxes, the team at Tax Group Center is ready to help. Let us give you that final number on what you owe – and if you need more help, you’ll have an array of tax professionals and lawyers backed by 30 years of experience standing by to work out your debt with the IRS. Reach out to Tax Group Center today to get started!

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Six Ways to Know When to Hire a Tax Attorney

Do you need a tax lawyer? Admittedly, it’s not a question that anyone looks forward to asking. However, the reality is that knowing when to hire a tax attorney can potentially save you from lots of needless legal trouble and IRS fees. You may be looking at some telltale signs that it’s time to get dedicated legal support on your side. Do tax lawyers really help? Let’s break down the reasons to bring in a lawyer to get a tax issue taken care of now.

Reason 1: You’re Being Audited

If you’re being audited by the IRS, this is a case where legal representation is essential. While an IRS audit may appear to be a simple case of “paper shuffling” for now, you want to make sure you’re not mishandling the situation, exposing yourself unnecessarily, or failing to sufficiently comply with the IRS. You may also want to bring in a lawyer if you think you’re at risk of being audited.

There’s also the post-audit support that a tax attorney provides. For instance, you may disagree with the conclusion reached by the auditor. At this point, it will be time to move to the appeals phase. Are tax attorneys worth it during an IRS audit appeal? Absolutely! With an audit appeal, your attorney will try to negotiate a settlement with the IRS on your behalf. If the IRS is unwilling to do a settlement, your attorney will then represent you in tax court.

Reason 2: You’re Confused About a Notice You’ve Received From the IRS

The big advantage that the IRS has is that IRS agents deal with their own forms, rules, and lingo every day. As a taxpayer, it’s all new and unfamiliar to you. What does a tax attorney do to help? Like the IRS, a tax lawyer speaks the language of the IRS because they deal with tax laws all day long. They also have experience with working directly with the IRS on settlements.

If you’ve received a notice from the IRS that you don’t understand, the worst thing you can do is to ignore it. This is where many people get into trouble with missing deadlines for appeals or allowing interest and penalties to accrue. The IRS doesn’t always provide the highest level of clarity when it comes to naming and numbering forms. Taxpayers are expected to navigate their way through complex forms that are coded based on the IRS’s standards. The best thing you can do when you get a document from the IRS is to call up a tax attorney to figure out exactly what the IRS is asking of you. You can rest assured that whatever form you’re looking at is something that a tax lawyer has seen thousands of times. It’s important to remember that “not understanding something” is not considered an acceptable or reasonable excuse by the IRS. A notice that goes ignored due to a misunderstanding will incur the same penalties as a letter that was intentionally ignored. 

Reason 3: You’re Going to Pursue IRS Tax Debt Relief

If you feel that your solution to tax problems is to ask the IRS for a relief or forgiveness option, it’s best to do it with a lawyer by your side for a number of reasons. First, a lawyer can help you understand which tax relief solutions or forgiveness programs you qualify for based on your positioning. Next, your lawyer can help you to prepare the documents and records the IRS needs to get your request processed and approved quickly.

If you’ll be asking the IRS to settle your debt for less than what you owe using something like an Offer in Compromise (OIC), it can be beneficial to do so with the help of a lawyer because the IRS only approves a small fraction of the OIC requests it receives each year. The application can also be slightly precarious because you’ll be asked to submit detailed financial records to prove to the IRS that you’re incapable of making payments in full. What’s more, you could have your approved OIC plan nullified if you violate any of the terms of your agreement down the road. In short, having a legal expert guiding you can remove much of the guesswork that goes into entering into what can be a complex arrangement with the IRS.

Reason 4: You’re Making a Big Change to Your Personal Income Stream or Business

Can a tax lawyer help me even if I’m not in trouble with the IRS? Yes, tax lawyers can provide “routine” support to ensure that you’re handling taxes properly. You may want to consult with a lawyer if you’re in the middle of starting, expanding, or merging a business to get an understanding of what that means for your future tax classification and obligations.

Reason 5: The IRS Is Coming at You With Criminal Charges

If the IRS is coming after you for fraud or tax evasion, there’s a lot that a lawyer can do to help you clear up the situation. First, a tax lawyer can help you to provide documentation and clarity if you believe that the IRS is mistakenly charging you for an honest mistake. If you’ve failed to meet your tax obligations knowingly, a lawyer will help you to pursue the legal options that are available for preserving your best interests. A tax attorney may potentially be able to reduce your penalties and help you avoid jail time.

Reason 6: You Simply Want to Make Sure the IRS Is Handling Your Case Properly

There are thousands of reasons why you might be corresponding with the IRS. While not all of them may seem dire enough to require legal representation, it’s still not a bad idea to have your correspondence come from a lawyer. The bottom line is that the IRS wants to collect what is owed and resolve issues as quickly as possible. Once they see that a lawyer is involved, IRS agents tend to find the motivation to move things along quickly. Having a lawyer “do the talking” for you with an IRS matter of any scope is simply a good strategy for putting your best foot forward, getting clear answers, and resolving the situation quickly.

Should I Hire a Tax Attorney? Are Tax Attorneys Worth It When I Only Have a Small Issue?

If you have any questions at all regarding tax issues, there’s no harm in consulting with a tax lawyer to simply learn more about the options that are in front of you. If you’re being pursued by the IRS, a lawyer can potentially help you to avoid penalties and enjoy a better outcome. If you’re seeking some type of relief, a tax lawyer is able to walk you through the process by “putting on the mind” of the IRS.

If you have a question for a tax lawyer, Tax Group Center is here to provide tax-specific and IRS-specific legal guidance. We help clients navigate stressful IRS situations every day. When bumping up against the IRS, you have everything to gain by not assuming that your problem will just vanish with a quick do-it-yourself fix. Reach out today for a consultation. Our team of lawyers and tax professionals offers 30 years of experience to help you avoid costly penalties and missed opportunities for debt settlements.

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Tax Questions Answered: How Does Wage Garnishment Work?

Help to Avoid IRS Wage Garnishment

Can the IRS take your paycheck if you owe late taxes? Unfortunately, the IRS can claim a part of your income through something called an IRS wage garnishment. One of the frustrating features of a wage garnishment is that the IRS will contact your employer directly to have your earnings redirected. Fortunately, the situation isn’t hopeless if you’re proactive about reaching an agreement with the IRS. Many people get into garnishment territory because they’re avoiding the IRS out of fear of penalties after running into tax problems. The reality is that it’s impossible to hide from the IRS. They know how much you owe, which tax years you didn’t file, and all of the personal details needed to track you down. In fact, they will have no trouble finding your employer if they want to get money from you. Avoiding letters from the IRS often just means getting on the fast track to a wage garnishment. This is actually a shame because the IRS only uses wage garnishment as a last resort. If that’s news to you, take a look at the answers to questions that are probably on your mind about the IRS taking your wages.

What Does Garnish Wages Mean?

“Garnishing” your wages means taking a cut until a debt is paid off. A wage garnishment is the legal procedure the IRS uses to take a portion of your earnings by requiring funds to be withheld from each paycheck. Yes, it’s fully legal for the IRS to do this if it is determined that you have neglected your tax obligation. No, the IRS won’t ask nicely for permission to take your money. Your employer must comply when the IRS comes calling to demand that a portion of your paycheck is redirected through IRS Form 668-W.

Will the IRS Notify You If They Garnish Your Wages?

A wage garnishment from the IRS will never come as a surprise. The IRS must first send you a written note detailing the amount you owe using an itemized list of all charges for your tax debt, interest, and penalties. This notice should also include a due date for when the IRS expects your balance to be paid in full. It’s vitally important to contact a tax professional to go over your next step if you receive an IRS Final Notice of Intent to Levy and Notice of Your Right to a Hearing because a garnishment will be just around the corner if you don’t take the right action.

How Much of Your Paycheck Can the IRS Take?

First, it’s important to know that the IRS can’t take everything you make just because a wage garnishment has been issued. The IRS will leave you with something from every paycheck if your wages are garnished. However, a garnishment can still be steep. In fact, the IRS can potentially take your full pay from a single employer if you have more than one income stream. The IRS uses a formula that takes into account your filing status, pay period, and number of dependents when deciding your expected amount per paycheck. It’s not uncommon for the amount taken to be more than half of your pay. What really hurts is that the IRS can take all of a bonus that you are paid during the span of your garnishment. Again, your employer has no choice when it comes to complying with the IRS’s demands.

Can You Negotiate a Wage Garnishment?

The easiest way to fight back against a tax garnishment is to simply pay your tax debt off in full. However, there’s a good chance that you’re in this situation precisely because you lack the assets or borrowing power to do that at the moment. That won’t necessarily mean that you’re stuck with a wage garnishment. The next steps are crucial because you may be able to get a garnishment stopped in its tracks if you can convince the IRS to work with you.

You’ll need to approach a wage garnishment differently depending on how advanced your situation has become. If a garnishment has not yet been issued, you may be able to request a hearing to contest the IRS’s findings. Once you receive the Final Notice of Intent to Levy letter, time is of the essence. You will have just 30 days to request your hearing and petition the tax court.

What if a wage garnishment has already been issued? You’re not stuck if your garnishment is already in place. The IRS may be willing to negotiate a collection alternative with you. Here’s a look at the options that are available to taxpayers who owe money to the IRS:

  • Offer in Compromise (OIC).
  • Installment Agreement (IA).
  • Currently Non-Collectible (CNC)/Hardship Status.

What’s the top thing a delinquent taxpayer should know before pursuing any of these potential relief options? None of these options are on the table if you haven’t filed all past returns. The IRS won’t work with people who are not current with tax returns. What’s more, you’ll be asked to make a commitment to file all future taxes under threat of having your relief plan revoked if you default.

What Happens After a Wage Garnishment Is Paid?

Hopefully, you’ll be able to work with a tax expert to avoid an IRS wage garnishment. However, it’s important to know what to expect if you allow your garnishment to progress. The IRS should notify your employer to stop deducting money from your wages once your debit is paid in full.

A Wage Garnishment Doesn’t Have to Happen

You don’t necessarily have to turn over a big portion of your paycheck just because you owe back taxes to the IRS. In fact, the IRS would prefer not to use this “last resort” option to collect what you owe. This is precisely why IRS tax relief options exist. Getting a tax professional working on your behalf immediately is often the first step to getting on the right course to avoid having your paycheck garnished.

While interrupting a wage garnishment is difficult, it’s not necessarily impossible. Your odds of being able to work out some type of payment plan with the IRS are much higher if you can intervene before the first penny is held back from your paycheck. It’s especially important to get tax help if you believe that the IRS has incorrectly initiated a wage garnishment for a tax debt that you don’t actually owe. Your levy may be stopped if you’re able to prove that your levy is erroneous or the IRS violated the law when issuing your levy.

What should you do if the IRS is trying to garnish your wages. At Tax Group Center, this is something we help our clients solve every day. We’ll help you understand your options for getting a wage garnishment stopped by putting a relief option in its place. If you have unfiled tax returns preventing you from seeking the relief options offered by the IRS, we can start by getting you fully current. Protect your income from the IRS. Call Tax Group Center at (800) 264-1869 to book a consultation today!

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7 Things to Know About Getting an IRS Tax Settlement

Tax settlement for getting IRS debt settled

One of the big things tax experts see time and time again is the way that fear of the IRS can cause people to miss out on opportunities to properly handle tax problems before the situation becomes critical. If you owe back taxes, the situation may not be as bleak as you think. A tax settlement may be a viable option for getting your IRS debt settled. A settlement allows you to do the following:

  • Pay less now.
  • Avoid liens and garnishments.
  • Permanently retire your debt.

A tax settlement is for someone who does not have the funds or means to pay off a tax debt in full even though they’d like to comply with the IRS. When working out a tax settlement with the IRS, you’ll typically qualify for one of two options. The first is a basic tax settlement where the taxpayer qualifies to pay back less than the full tax debt after it is established that the liability amount is too high to reasonably be paid back. The second is an installment agreement (IA) consisting of monthly payments that allow a taxpayer to pay back the full debt over time. Additionally, taxpayers can pursue options for declaring hardship or “uncollectable” status. However, these options focus more on “freezing” debt instead of creating a clear path to retiring debt to the satisfaction of the IRS. The first step to any type of settlement or relief is making sure that all tax returns up through the current year are filed. The IRS won’t work with any taxpayer on a relief solution if they have unfiled tax returns in their closet.

What Is a Standard IRS Tax Settlement?

A tax settlement is simply a mutual arrangement created by the IRS and a taxpayer that allows a taxpayer to settle an outstanding debt for less than the full, original amount owed. While there’s no guarantee that you’ll be granted a settlement, the IRS is often highly receptive in cases where it’s clear that a taxpayer is incapable of paying a full amount owed based on their finances. Both current tax laws and your specific financial details will help to shape the IRS’s decision in your case.

Why Would a Taxpayer Want a Settlement?

A tax settlement is often the fastest path out of legal and financial difficulties for delinquent taxpayers. Generally, tax settlements are approved quickly once a taxpayer files all unfiled taxes. That means that you’re able to begin making reasonable payments that will allow you to pay off your tax debt in a short amount of time. In addition, you can stop living in fear of late fees, wage garnishments, liens and other penalties that can be detrimental. The IRS won’t place liens or levies on your home, wages, business, property, or bank accounts as long as you have a settlement in place.

How Do Settlement Payments Work?

Once your tax debt is reduced, it may be possible to pay off the remaining balance in a lump sum. However, you may prefer to work out a settlement that allows you to pay off what you owe throughout a set, penalty-free window of time using scheduled payments. A tax professional should be able to guide you on the type of plan to request from the IRS.

What Happens After You Pay Off Your Tax Settlement?

Once your payment is complete, you’re considered to be in good standing with the IRS for all tax years covered in your settlement. This means that it’s essentially like your tax woes never happened! If you have a history of defaulting on tax payments, it’s important to get the help of a tax-preparation professional to ensure that you’re filing on time every year going forward. The IRS may not be as willing to provide you with a settlement again if you’re delinquent on future tax returns or payments.

How Does the IRS Determine If You Qualify for a Settlement?

When determining eligibility for a tax settlement, the IRS looks at a number of factors related to your income, expenses, assets and liabilities. In addition, circumstantial factors like job loss or severe financial hardships are explored to get a clear picture of how likely it is that you can actually pay off what you owe. If it’s determined that you are not capable of reasonably paying off your tax debt, the IRS may be willing to accept a reduced amount. It is simply better to get “something” instead of “nothing” from the IRS’s perspective.

Is There Any Downside to Accepting a Tax Settlement From the IRS?

Generally, it is to your advantage to accept a settlement from the IRS if you owe taxes you cannot pay. However, the IRS does claim the right to confiscate all of your future tax refunds to apply the totals to your debt until your debt is fully paid. You will also be back to where you started if you default on any of the terms of your settlement agreement before your debt is paid off.

How Hard Is It to Qualify for an IRS Settlement?

While it’s true that the IRS only grants settlements to a narrow spectrum of applicants each year, there’s room in the program for people who truly need relief. If you can reasonably pay off your debt using assets or borrowing power, you won’t qualify for a settlement. It’s important to get a payment in right away if you currently have enough money or borrowing power to cover your full tax debt because putting off payment will probably result in more needless fees and penalties.

Some Extra Tips for Getting a Tax Settlement From the IRS

There’s no need to “hide” from the IRS if you owe taxes because the IRS keeps close tabs on delinquent taxpayers. A better strategy is to contact the IRS before the situation escalates. If you’re unsure about how to handle the situation, bring in a tax professional to advocate for the best outcomes. The best way to help your odds of being granted a settlement from the IRS is to be as forthcoming and compliant as possible while working your way through the process. When vetting applicants for settlements, the IRS dives deeply into financial statements and records to assess your financial state. Trying to hide income or assets could nullify your application.

What to Do If You’ve Fallen Behind on Taxes

If you know you owe late taxes, don’t let another day pass by without seeking help from a tax expert who can steer you toward a solution. It’s a misconception that the IRS only wants to punish people with harsh penalties if they can’t pay their taxes. Tax Group Center can help you explore settlement options to get your IRS tax debt settled the right way. Our team of tax professionals and lawyers helps people work with the IRS to reduce or forgive back taxes every day using custom solutions. We speak the language of the IRS to the IRS on behalf of our clients. Fill out a Contact Form or call us at (800) 264-1869 if you need help from a Certified Tax Consultant today!