Hiding from accumulated IRS debt might sound like an option for those struggling with seriously delinquent tax debt, but it’s really no solution to the back taxes you owe. If I’ve said it once, I’ve said one thousand times: you can’t outrun the taxman.
You’re not alone in your tax problems, and there are tax professionals here to assist you in finding tax resolution options that allow you to crawl out from under financial hardship and get back on solid footing.
Many people already know that tax professionals exist and that there are forms of tax relief available, but they may not be sure where to start or what to do.
Here are three tips to help you handle your tax debt in an attainable and affordable way to get atop the mound of debt you owe the IRS.
1. IRS Compliance
If you are looking for a resolution to your tax debt with IRS, the first step is compliance. Some people have been out of compliance and have accumulated so much back taxes, they don’t realize how easy it can be to get back in good standing with the IRS.
So, why the need to get back in compliance with the IRS? Well, eligibility for financial services or an IRS payment plan like the IRS Fresh Start program requires current compliance. How could that even be a possibility for someone who has let tax preparation go by the wayside? Simply put, IRS compliance does NOT mean that you must pay off all your taxes owed, and certainly not all at once.
Compliance simply means that you have filed all your required tax returns and that you are current in paying THIS years’ taxes owed. This option makes you eligible for Internal Revenue Service streamlined installment agreement or other payment plans.
2. Filing Past Tax Returns
Filing at least the last 6 years of tax returns, no matter how many years have gone unfiled, will gain your compliance with the Internal revenue Service. But what if you’re missing records of necessary financial information and your tax documents are in shambles? If you have missing records, a tax professional can help you re-acquire the information from IRS going back as far as 10 years.
Also, if you are unsure of which years you filed tax returns and which ones are missing required tax documents, a tax professional can get you that information, as well. Yes, it’s that simple.
3. Paying Current Year’s Taxes
If your employer pays you with a paycheck and withholds taxes through payroll deduction, you are likely already in compliance with the IRS on your tax balance from the current year’s tax bill. All that needs to be done is to verify that the withhold is adequate for your filing status.
For self-employed individuals, you need to have paid all the quarterly tax estimates for the year. The simple way to figure this is to take last year’s tax liability and divide it by four. This amount needs to be paid on April 15, June 15, and September 15 of the current year, and January 15 of next year.
For businesses with payroll deduction, the current quarter’s payroll tax deposits must be paid up. The further along into the quarter, the harder it is to make up if the business has not been depositing employment taxes.
Current compliance ensures IRS that the taxpayer does not incur additional debt at tax time. If current compliance is maintained, resolution options like currently non-collectible, offer in compromise, installment agreements, and penalty abatements are available to taxpayers who have fallen behind.
If you are unable to pay your taxes, there is no need for concern. If you need help with your tax debt from a qualified tax resolution specialist, contact us as soon as possible so you can get out from under the amount of money you owe the IRS and get back in good standing for your present and future.