What You Need to Know About Tax Relief

Falling behind on your taxes is something that many Americans have dealt with at one time or another. Even so receiving threatening letters from the IRS can be overwhelming and at times even downright scary. However you don’t have to face the IRS alone. Here is a look at the IRS collections process and some of your options to achieve tax relief.

Tax Assessment & Collections.

Once the IRS determines that you owe them money they will assess you a tax. The IRS can do this if you submit a tax return and didn’t pay your bill in full or after an audit of you finances. Once they determine that you owe them money the IRS will send you a notice of their assessment and a bill for the amount of taxes they claim you owe. You then have thirty days to pay. If you don’t pay within 30 days you’ll receive another bill until they IRS deicides to send you a Final Intent to Levy notice. At this point you either have to pay what you owe or the IRS will begin to levy your property and/or paycheck.

How do you achieve tax relief?

Establish and Installment Agreement.

Arranging an installment agreement is the most popular method of obtaining tax relief. Rather than paying the amount you owe in one lump sum you are able to make arrangements to pay in monthly installments for up to 72 months. Although it makes sense to pay as quickly as possible because penalties and fees sill accrue while you’re making payments.

Request “currently non-collectible” status.

If you’re out of work or only earning a small paycheck you can apply for “currently non-collectible” (CNC) status. If are eligible for CNC status you will no longer receive collections letters and/or calls from the IRS. However CNC is typically not a long term solution to resolving tax debt. The IRS reviews review everyone’s CNC status each year and evaluates eligibility. Once you are no longer eligible you will still be on the hook for the entire amounted you owe.

Offer a compromise.

Depending on your financial circumstances and the amount of money you owe, the IRS maybe willing to take less than they entire tax bill. This is what is known as an Offer in Compromise (OIC). To make an OIC offer, you’ll need to submit a list of all your assets along with your liabilities, income and expenses. The IRS then has six months to accept or deny your offer. If the offer is accepted you are then able to make the payment in a lump sum or over a period of time (depending the agreement).

It’s best not to go up against the IRS alone when seeking tax relief. Contact one of your tax professionals today for more information!