Did you know that the IRS can seize assets or property for unpaid back taxes? If you are currently in this situation and are tired of being hassled by the IRS because of back taxes, you are in the right place. We are going to share some tips on how to deal with this debt.
Keep reading for our top tips.
Consult a Tax Relief Professional
The first thing you want to do when dealing with back taxes is to contact a licensed professional. You are entitled to tax representation whenever you are dealing with an IRS matter. Make sure that you contact a reputable place like this tax firm.
When you start receiving collection threats you have the right to ask the IRS to briefly stop all your collection activities until you have secured tax representation. Do not waste time finding someone because the longer you delay the case the worst the situation can get.
Installment Agreement
The IRS allows people that owe back taxes to set up a payment plan. The amount that you will pay monthly will depend on how much money you owe in back taxes, your employment situations, and how soon you can pay what you owe.
There is an application fee to make an online payment agreement. If you set up the payment to come out electronically the fee will be much less. You can also see if you qualify for a low-income taxpayer fee.
Keep in mind that there is interest charged by the IRS on your unpaid balance. You want to take your payment arrangement seriously because the IRS can void your agreement for missing a payment.
Hardship Extension
If you are currently going through hardship then the IRS has options for you. If you are able to prove that paying the taxes you owe would cause you financial hardship. The standards are set by the IRS and they will determine if you will end up in financial hardship or not.
If you decide to apply for a hardship extension you will not have a fee or penalties but you will have interest to pay on your balance. When you fill out the application you will have to also include a statement of your assets and your liabilities.
Credit Card
If you have a credit card with a zero interest rate or lower than the IRS rate then use it to pay for your back taxes. The IRS does charge a fee for using a credit or debit card. Make sure to ask what the fee is ahead of time and also verify with the IRS the service providers accepted.
Now You Know How to Deal With Your Back Taxes
Whatever you do never ignore back taxes because it will only result in making things much worse. Make sure that you never give more information than is required by law and find a licensed professional as soon as possible. Lastly, when in doubt, always consider hiring a tax professional.
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