Millions of Americans each year are indebted to the IRS and owe back taxes on their income. Because such a large portion of the country’s population owes the government agency money, the IRS cannot realistically collect all of those back taxes. That facilitated the need for IRS tax debt forgiveness programs. If you can’t pay your taxes in full and you’re not sure how to start paying back what you owe, Community Tax can help you determine which IRS debt forgiveness program is best for your situation.
The foundation of any good tax debt resolution program is to find a payment plan or settlement that meets a person’s needs. One of the most sought-after methods to settle an unpaid tax balance is to negotiate debt cancellation from the IRS. A taxpayer who gets IRS tax forgiveness services with an accredited company like Community Tax may begin to eliminate the stress and challenges that accompany the IRS from years of unpaid back taxes. Once a resolution program is implemented, they can begin to rebuild their finances and move on to avoid more money problems.
If I can’t pay, do I have to continue declaring?
Always file your tax return. Regardless of whether you can pay off your tax debt, filing your return before the deadline will help you avoid penalties and interest. The fine for missing a file is steep; Generally, the cost is 10 times more than the penalty for non-payment.
The penalty for failure to file is generally five percent of unpaid taxes for each month or part of a month that your tax return is late; It is self-based, but will never exceed 25 percent of your total unpaid tax debt. Compare that to the late payment penalty: a mere 5 percent for every month that your taxes are not paid. The minimum late filing penalty is $135 or 100 percent of your unpaid tax, whichever is less.
How can I discharge the tax debt?
While it is true many tax debts cannot be eliminated through bankruptcy; however, some others can be eliminated. Even those that cannot be completely written off can be negotiated for smaller amounts with the government or included in a manageable payment plan. If you want to know more about tax forgiveness, contact our bankruptcy attorneys today.
To discharge tax debt, you must meet the following criteria:
- The tax debt must be at least three years old before filing.
- Debt must be evaluated by the IRS at least 240 days before filing.
- The tax refund must have been on file for at least two years.
- Taxes must be income taxes (payroll taxes and fraud fines are not downloadable).
- They did not commit fraud or intentional tax evasion.
Tax forgiveness has many requirements, but it is a bankruptcy benefit that many people do not consider. If you have questions about how to discharge the tax debt, an experienced attorney can help you.
Can I remove a federal property tax lien?
Even if your tax debt is cancelable, previous federal property tax liens can still be a problem. Chapter 7 can eliminate your tax debts if they meet all the requirements stated and mentioned above. However, if the Internal Revenue Service (IRS) office records a lien on your property prior to filing for bankruptcy, that tax lien will remain. Although you may be able to keep the property, you will not be able to sell it with a clear title. Before selling the property, you will have to pay the tax lien.
What types of tax debt cannot be discharged?
Although the oldest tax debt that meets the requirements listed above can be discharged, there are some types of tax debt that may not be cancelable. Those include the following:
- Tax liens on any personal property;
- Property taxes payable within one year of filing for bankruptcy;
- Taxes that were withheld or collected by a third party;
- Employment taxes, such as excise duties, customs duties, and others;
- Tax penalties that are not punitive in nature; and
- Tax refunds that were wrongly paid to you.
If you own a company or operate as a business, there are many types of priority tax debt that cannot be written off, those include:
- Income taxes withheld from paychecks, often called trust fund taxes (FICA, Medicare, etc.);
- Sales tax that you collected from customers; and
- Other taxes related to your business and unavailable funds.
It can be difficult to know if your tax debt is eligible for tax forgiveness. An experienced attorney can view your taxes and let you know if they can be written off. Even if you don’t qualify for tax forgiveness, a tax attorney can help you handle the legal aspects of your case and deal with the IRS for you.
Should I hire someone to help me?
Many taxpayers have attempted to establish an IRS debt forgiveness program on their own. The problem with this is that most people are not aware of the specifics of debt service forgiveness from the IRS and do not have the experience necessary to have the tax balance be eliminated or reduced. Between installment deals, compromise offers, and other settlement options, taxpayers can get bogged down in a world of confusing concepts and end up being rejected by a debt relief program that a tax professional might have approved. There are many practitioners, CPAs, and other negotiators such as Community Tax practitioners who have a strong track record in obtaining debt forgiveness from the IRS and helping clients significantly reduce their unpaid balances with appropriate debt relief strategies. In some cases, these experts can eliminate the entire balance by analyzing taxpayer finances and a well-developed case based on the individual’s personal situation. Tax debt is not worth handling on your own, and Community Tax professionals have the skills to get a debt relief offer from the IRS quickly and efficiently. Anyone having trouble getting out of their tax debt should consider the specialists at Community Tax and let them help restore financial security.
GET HELP TODAY
Call Community Tax Toll-Free
at (888) 676-6634