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Sometimes, life happens, and even the Internal Revenue Service understands this. This is why there are government programs in place that will forgive your debts, especially if you cannot afford the payment of the taxes.
However, these debt forgiveness programs are only applied to eligible taxpayers. Not all of the amount is forgiven, and there are still some partial debts that may be left and needed to be paid. Needless to say, this is still a helpful program where the liabilities of a person are significantly decreased.
First, the authorities may check one’s financial definition, condition, and health. This means that the amount that can be collected is reasonable enough not to leave the other person bankrupt. If the collections force a person into bankruptcy or any other crisis that involves losing every sense of financial security, then know that the IRS may not be able to collect the back taxes that you owe to them.
Knowing the Figures
Before you can apply to these kinds of programs, it’s essential to understand the amount of taxes you owe to the IRS. Knowing the figures and where you currently stand is vital for getting the tax relief and forgiveness that may be applied to your situation.
One of the different ways to find the exact numbers is to check the portal of the government agency. You can call a representative, send a mail form, or employ the help of tax professionals who can do the legwork for you. Regardless of how you’re going to use it to figure out the total amount that you owe, it would be best if you still were accurate before asking to join the program.
Be Alert with Collection Actions
You may keep forgetting about the deadlines or haven’t reached out to the Internal Revenue Service to explain your situation. Some may not even know that they can ask for forgiveness assistance, and they simply wait for the tax person to go to their house for debt collection for small business or personal finances. If you haven’t contacted them in some way or another, except that they will come after you and begin to take actions against you.
The actions may seemingly be insignificant at first. However, they can become more aggressive when you receive loads of notices in the mail, and the matter was handed to a private collection agency. This may involve tracking your new address and risking your passport because of the debts. Some of the collection actions that you should be on the lookout for are the following:
Liens
Tax liens are the governments’ claim to your house and car when you fail to pay what’s due on your tax debt. There’s a secured interest on your properties, and this is called the lien. This is not the same with a levy since a lien will not let the government take your properties immediately.
However, the liens still need addressing properly since you won’t sell your house to pay your debts. In the future, the seemingly small actions of collections may snowball into more aggressive actions that you may not be able to deal with anymore.
Levy
Levies are seizures of your property by the government for any unpaid taxes and debts. Some people receive a note from the IRS where they are aware that the authorities are pursuing several levy actions against your name. The levies can be placed generally on what you own, including boats, cars, lots, and when you buy houses for cash. Others find themselves with levies on their tax refunds, bank funds, and wages to ensure that the debts will be paid on time.
Garnishment Of Wages
Wage garnishments are types of tax levies where the IRS will take some of your income to settle your loans. They may contact your employer directly and continue to garnish the wages until the amount is fully paid.
Offer in Compromise
There are situations where you can pay using several resources for your debts. The IRS is offering several payment plans like Offer in Compromise, where you can try resolving the remainder of the amount. Depending on your current financial capacities, you may find yourself with a more reduced debt than you would have paid when you didn’t request this kind of assistance. The remaining balance can be paid through monthly fixed arrangements or in a single lump sum.
However, there’s always a catch with this, as many people don’t usually qualify for these kinds of programs. Fortunately, experts in Tax Relief can give you the information that you need, especially when you want to know the options that can improve your financial situation in life. It’s always best to get an expert’s help regarding your condition to provide you with more info on solutions that can help you out.
Ineligibility For Offer In Compromise
- The person applying hasn’t filed any required tax returns for the previous years
- No required tax payments were made
- There’s a bankruptcy case under a person’s name
- The one requesting is a business owner who hasn’t submitted any tax deposits for employees
- Payment can be made through a lump sum or assets
About the Fresh Start Initiative
Don’t let any of these ineligibilities deter you from getting help. It’s best if you can consult a professional about the best and available options out there. You can also become qualified with the Fresh Start Initiative.
This program will enable you to make more affordable payments without the need to disclose your five-year income to the IRS. With this program, the IRS will look at only two years of your income in the future, depending on the period that you’ve chosen.
Taxpayers with student loans are not allowed to continue their payment, which is guaranteed at the federal level. In certain conditions, any financial hardships that can cause delinquency can be made in installments. There are also allowable living expense standards where credit card payments for a more convenient payment option for the tax debt.
