Guidance for Individual Tax Issues
Author: Lani Coggins
Have you neglected to file income tax returns, or do you owe the IRS money in the form of back taxes? You must resolve the issue as quickly as possible. As you continue to put it off, the IRS will continue to add penalties and interest and -- at any time -- can commence collection proceedings.
IRS collection methods can include:
- Wage garnishments
- Levies of your bank accounts
- Liens on your property
- Legal proceedings, potentially including a jail sentence
As scary as this may sound, remember that all the IRS really wants is to get its money from you. It would rather not turn this into a situation that threatens the very existence of your company. If it cannot collect from you in full, the agency may be willing to get the amount owed over time, and may even accept less than you actually owe them.
The best way to deal with your IRS issue is to discuss your options with a team of tax professionals, and then let them contact the government on your behalf. Typically speaking, they will file any old returns as quickly as possible to stop the accrual of penalties for your failure to file. Once they have done that, they will work with the IRS to take care of your liability for back taxes. Typical solutions include:
- Paying everything you owe in a lump sum. This will minimize your interest and penalty expense.
- Paying your entire balance through an installment plan. This method lets you make monthly payments on your balance, although it typically means that you pay more, since interest and penalties continue to accrue. (An installment plan can be less expensive than using a credit card to pay your taxes, though.)
- Paying a reduced balance through an "offer in compromise." In certain circumstances, the IRS will agree to clear your debt with a partial payment.
- Eliminating dischargeable tax debts through bankruptcy.
At The Tax Office, we have a lot of experience dealing with the IRS; we can speak their language. We understand the options, and we can help you determine the best one for you. Contact us today, and we'll get this issue resolved -- finally.
