Are you on the hook for paying back taxes? If you have questions about how to negotiate with IRS, you’re in luck. This post will detail the best strategies for dealing with back taxes on your own and finding a compromise you can live with.
What is IRS?
The Internal Revenue Service (IRS) is a US tax collection agency which deals exclusively in financial matters. Founded in 1862, the agency provides taxpayer services which include filing tax returns, answering taxpayers’ questions, updating accounts and resolving issues. The IRS is part of the United States Department of the Treasury and is headquartered in Washington D.C.
Dealing With IRS By Yourself
If you owe back taxes for a fairly small sum, it might be worth your time to handle things by yourself. The first step when dealing with the IRS on your own is to call them up and explain your situation. If you’ve already spoken with a tax advisor, this first step might not be necessary. In some cases, the IRS will work with you even if everything is in order. The IRS will want to know the kind of information a tax advisor might have- for example, how much money you owe and how long it has been since you filed your return.
If you have a regular tax advisor, this step should be routine. The IRS can assess penalties for missing deadlines for filing returns. Failing to file a return by the deadline will incur a penalty of as much as $100 per day, per return, up to a maximum of $5,000 per year.
If you neglect to file your taxes at all, the IRS may assess penalties of up to five percent of the account balance that remains unpaid. If you still owe more than six months’ tax, the IRS can impose penalties that can double the amount owed. Penalties are assessed monthly until the account is paid in full.
The IRS doesn’t just fine people for failing to file; it also puts liens on assets, such as vehicles, if taxes aren’t paid on time. Your bank will charge you for late payments if you don’t pay your taxes before your account goes into overdraft.
How to Negotiate Back Taxes With IRS Using a Lawyer
If you’re in a more serious tax situation, it’s probably worth your time to call up a tax attorney or CPA to assist you for Negotiate Back Taxes With IRS. A lawyer can help you build a defense for your case, answer questions, and find solutions to your tax debt. The IRS will try to negotiate a payment plan with you. When they put a lien on your personal property, they’ll offer to release it if you pay the full account balance, or an agreed upon amount.
If you’re close to going into bankruptcy, the IRS will sometimes dismiss your personal debt in order to keep your business alive. The IRS isn’t likely to negotiate unless you’re close to filing for bankruptcy or if it would be in their best interest (i.e., they don’t get as much money through bankruptcy).
There’s no easy way to settle a tax debt. You might need to talk to the IRS about your case when you’re in the most dire of situations. Before you do, think about how much money you owe and how long it has been since you last filed your tax return. If you don’t have a tax advisor, it’s important to find out if they’ve already worked with you before. If you’ve missed payments, you might be able to get the IRS to reduce your penalties. In the end, it’s worth your time to find out how to negotiate with IRS because it can save you a lot of money.
If you have a tax attorney or advisor already, call them up and ask for their assistance. A lawyer or CPA can help advise and help settle your case. If not, consider finding one who’s familiar with how the IRS works