IRS Tax Debt Solutions – Get IRS Tax Help
There are numerous tax programs in existence that can help you get out from under the stressful burden of IRS debt. Owing back taxes comes in many different forms, and each type of tax-related issue has a different solution. It’s important to know just what kind of options are out there and which ones work best for you.
In recent years, the IRS began focusing on the IRS Fresh Start Initiative. This initiative helped expand relief for taxpayers by modifying standards to make it somewhat easier for those owing tax debt to get their heads above water. In many cases, this has involved lowering restrictions or modifying dates in order to help make it easier to qualify for different programs. As a result, those who find themselves in debt to the IRS could have even more options than they once did.
The first step is simply realizing that you do have options and that you don’t have to just take whatever the IRS throws at you. Understanding more about the tax relief programs that may be able to help is the key to unlocking a solution for your tax problems. Here are some of the most commonly used – and most effective – tax relief programs available.
IRS Bankruptcy Law Firm in Sarasota & Punta Gorda, Florida
Tax bankruptcy certainly isn’t a ‘best case’ option, but in some instances filing bankruptcy could help alleviate tax debt. Certain requirements must be met including that all taxes must be due for at least 3 years and all returns must have been filed for at least two years. Additionally, tax liabilities must have been assessed for a total of at least 240 days. If these conditions are met, it’s possible to use Chapter 13 or Chapter 7 to alleviate tax debt.
Penalty Abatement Lawyer in Sarasota & Punta Gorda, Florida
This type of relief is designed to help those who can afford to pay the total amount of taxes they owe, but not the interest or penalties that their back taxes have accrued. Form 843 must be completed to request penalty abatement, and if approved it is possible to remove the fees and penalties attached to tax debt. You’ll need to show reasonable cause as to why you didn’t pay taxes properly. This essentially means that you must show a valid reason that you couldn’t file your tax return or pay them on time. Issues like loss of wages or disability could qualify as reasonable cause.
Innocent Spouse Relief
IRS Form 8857 allows you to request Innocent Spouse Relief status. This form covers the request entirely, with no additional forms needed. Approval of the request frees you from being held liable for the tax debt incurred by a former spouse or even a current spouse. You must meet specific guidelines such as proof that you didn’t benefit from the money obtained through tax manipulation. There are a few different types of relief that fall under this category, and finding the specific one for you is important.
Currently Not Collectible
This status simply means that you are found to be completely unable to pay off your current tax debt. If you achieve this status the IRS will be required by law to stop all collection activity against you. This includes levies, wage garnishment, and more. However, the status of Currently Not Collectible is only a temporary solution to the problem. Normally, you’ll hold your CNC status for 12 to 24 months. During that time, you won’t be required to make monthly payments and won’t face any collection actions. But, interest and penalties will continue to be charged against you. In some cases, this status is a way to postpone collections until the statute of limitations has expired, turning a temporary solution into a permanent one. Forms 433A or 433F will need to be filled out to begin the process.
Statute Of Limitations
One of the simplest, most effective, and most overlooked options that can be used to help resolve IRS tax issues is the expiration of the Statute of Limitations. According to section 6501, there are very strict guidelines in place that the IRS must abide by. Essentially, the IRS only has 3 years in which they are allowed to audit a tax return and only 10 years within which they can collect back taxes. In other words, if those time limits expire, you aren’t legally obligated to pay the back taxes. There are certain things that could extend these limits, however, and actually requesting things like an Offer in Compromise will add time to the statute of limitations. Other exemptions may apply as well, and as a result, it is important to carefully consider each option available to you during the process of handling an IRS related issue.
Installment Agreement Attorney in Sarasota & Punta Gorda, FL
An IRS Installment Agreement is just what it sounds like. Instead of paying off one lump sum amount, you’ll be paying a monthly payment much like a credit card. Agreeing to this will allow you to avoid bank account levies or wage garnishment as long as you make your payments on time. IRS Form 9465 is used to request an Installment Agreement, but there is no guarantee that you will be accepted for the program. Form 433A or 433F will need to be completed as well to report your financial information and determine whether or not you are eligible. The overall amount owed, your income level, and other factors will determine whether or not you’re accepted. If so, payment plans will be set up with various terms or conditions in place. Different steps are taken based on the total amount of back taxes owed. Those owing less than $10,000 are often guaranteed to be allowed to set up a payment plan. Beyond those amounts, numerous steps will have to be taken.
These points only touch on the basics behind the different tax relief programs available, and the specifics are very complex. Navigating the waters of the tax debt is something that is almost impossible on your own. An experienced tax attorney can help you determine exactly what kind of relief program works the best for your situation and how to get the maximum amount of relief from your current tax burden.
With over 20 years of experience in tax law, Attorney Mary E. King is one of the leading tax attorneys in Florida and has helped countless Floridians escape the burden of tax debt. Contact Mary for a consultation to get started on your own tax relief programs.
Frequently Asked Questions
What are my options for resolving IRS tax debt?
There are several IRS tax relief programs that may help reduce financial stress caused by back taxes. Common options include installment agreements, penalty abatement, Offer in Compromise, innocent spouse relief, bankruptcy, and Currently Not Collectible status. The right solution depends on your income, assets, and overall financial situation.
What is the IRS Fresh Start Initiative?
The IRS Fresh Start Initiative is a program designed to make tax relief more accessible for taxpayers struggling with IRS debt. In many cases, it expanded eligibility rules for payment plans and other relief options. This program may help qualified taxpayers avoid aggressive collection actions and manage tax debt more effectively.
Can I set up a payment plan with the IRS?
Yes. Many taxpayers qualify for an IRS installment agreement, which allows monthly payments instead of paying the full balance at once. As long as payments are made on time, a payment plan may help prevent wage garnishments and bank levies. Financial information is usually required during the application process.
What does “Currently Not Collectible” status mean?
Currently Not Collectible (CNC) status means the IRS temporarily stops collection efforts because a taxpayer cannot afford to pay. This may pause wage garnishments, levies, and other collection actions for a period of time. However, interest and penalties may still continue to grow while the account remains in CNC status.
Can IRS penalties and interest be reduced?
In some cases, yes. Penalty abatement may help remove certain IRS penalties and related interest charges if you can show reasonable cause for filing or paying late. Common reasons may include serious illness, financial hardship, or unexpected life events.
What is Innocent Spouse Relief?
Innocent Spouse Relief may protect someone from being held responsible for tax debt caused by a current or former spouse. To qualify, you must show that you did not benefit from or know about the tax issues. The IRS reviews each case carefully before approving relief.
Why should I work with an experienced tax attorney for IRS debt problems?
IRS tax laws and relief programs can be difficult to understand without professional help. An experienced tax attorney can explain your options, communicate with the IRS on your behalf, and help you choose the best strategy for your situation. Proper legal guidance may improve your chances of reaching a successful resolution while protecting your rights.
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