IRS Debt Settlement
While you could attempt to settle your debt alone, you could be better off by working with a professional. All of the following are reasons you should work with someone who has experience with San Antonio IRS debt settlement in the Central Texas area.
Learn more about Premier Tax Service and how we can help you with this free e-book, Your Best IRS Defense, by Premier Tax Service expert negotiator, Eddie Tovar!
How to Negotiate Debt Settlement with the IRS
You can try to run from your debt, but it can catch up to you. This is especially true of IRS debt. If you are struggling with the burden of your debt, you have a few options. Before attempting to handle your debt, it’s important to understand the different ways in which you can handle the situation. Our IRS debt settlement experts in San Antonio and Austin, TX could resolve your problems.
By speaking with an expert from Premier Tax Service, you can learn more about your debt settlement options.
Can You Negotiate with the IRS?
Not all types of debt will haunt you, but IRS debt is forever.
When it comes to taxes, the government is not lenient. There are many consequences that come with unpaid tax debt and the government is very unforgiving. One such consequence is jail time. Other penalties include fines, garnished wages, and more. Unfortunately, most people do not understand the laws regarding tax debt. As a result, they don’t realize the severity of the situation. They don’t take the necessary steps to get out of debt. By speaking with an expert, you can improve your situation. You may be able to prevent interest from building up, penalties from adding to your debt, and criminal charges from being filed. A professional knows what it takes to eliminate tax debt and can get you on the right track.
Consequences aside, IRS debt can take an emotional toll on you. Even if the IRS hasn’t acted yet, the looming threat is always there. You never know what day will be the day they take action. Unfortunately, this constant fear can impact your day-to-day life. The sooner you eliminate your debt, the sooner you can move forward with your life.
There are a few ways you can resolve your debt issue. But some options are better than others. By working with a professional, you can learn about all of the possibilities. You can also find out about the consequences of each option. A CPA might have some knowledge about making tax settlements. However, that is not their area of expertise. They might not understand the various tax settlement programs and how they can affect you. Therefore, they may not be able to give you all the information you need to make an informed decision.
Every year, there are changes in the tax codes and laws. While the average person does not keep up with these changes, a tax expert does. They know about the latest settlement programs and can tell you how you can reduce or settle your debt. If you choose to do the job on your own or work with an inexperienced party, you may not be aware of the latest regulations and recent policy changes. This puts you at a major disadvantage.
Finally, you have a lot on the line. If you fail to resolve your debt or make a mistake, you may face consequences. In extreme situations, you could go to jail. Even if you don’t go to jail, you’ll start accumulating interest. What was once a minor debt could quickly double or triple in value. Fortunately, the right expert can prevent this from happening. By negotiating a debt settlement, they can keep you from experiencing the serious penalties that come with owing money to the IRS.
Tax Fraud or Evasion Charges
Individuals can face tax evasion or tax fraud charges when they don’t comply with the IRS. They could refuse to file tax returns, pay taxes, or show their income sources. In addition to coming with legal penalties, the charges can be a source of humiliation. The IRS publishes your name, crime, and location on their website. Other people can find out about your tax debt troubles, and this can have a significant impact on your life. If you are convicted of a crime, future employers will know about your criminal record. You may also find it difficult to obtain employment.
If you settle your debt before it’s too late, you don’t need to deal with the criminal charges and embarrassment that comes with a tax evasion conviction.
When Do You Need a Debt Settlement Professional?
Most people know when they have a problem with the IRS. The government might have sent you some notices about payments owed, or have recently done an audit. In either case, you may be in debt to the IRS. The IRS is notorious for its poor communication methods. In some cases, the IRS’ failure to answer your calls could be enough of a reason to work with a tax debt professional. They can get you in contact with the government before your issue spirals out of control. For instance, your attorney may be able to draft a letter to the IRS. If they word it correctly and send it through the correct channels, the letter could gain the department’s attention. An expert may also know better phone numbers for contacting the IRS. Instead of sitting on hold for hours, you may get a direct line to someone.
Anyone who suspects they owe money to the IRS could benefit from working with a tax expert. In Austin, the average resident income is $32,672. In San Antonio, the average resident income is $46,317. Whether you owe $3,000 or $30,000, the debt could ruin your finances. You shouldn’t hesitate to seek help. With a settlement, you may be able to pay less than the amount you owe.
How to Eliminate IRS Debt
There are only a few ways to eliminate your IRS debt. First, there’s the obvious option — to pay it off. If you can afford it, you can make one lump sum payment to the government. Then, they will leave you alone. But this isn’t always an option. You may not be able to afford the payment. Even if you can afford it, you could be left in a dangerous financial situation. Fortunately, there are ways around making one large payment for the full debt. You may be able to make monthly payments on the amount. Or, you can do one of the following:
One option is to make an Offer in Compromise, or OIC. An OIC is a debt settlement agreement, and it’s one of the most common and effective types of tax debt relief. A tax expert can negotiate with the IRS to get a settlement offer that is less than the full amount of debt. Then, your debt is eliminated as soon as you make the settlement payment. Of course, it’s not as simple as it sounds. It takes an experienced negotiator to get results. In order to convince the IRS to make the agreement, they need to show one of the following:
- You can’t pay the full amount in a reasonable period of time
- Your tax liability is in question
- The full payment would be unfair, inequitable, or cause economic hardship
For instance, you could have a health condition that prevents you from working full-time. This could qualify you for an OIC. It’s important to realize that the IRS will not accept just any OIC. They will check your eligibility and will only accept a fair settlement offer. If the offer is less than they would get through seizing your assets or garnishing your wages, they are unlikely to accept it. You only have six months to pay off the full amount of your OIC. If you fail to do so, the IRS will void the OIC. You will need to pay the full amount of debt as well as interest and penalties.
Another option is penalty abatement. For many, the IRS penalties make their tax debt too high. But the IRS can choose to forgive your penalties in a process known as penalty abatement. Without the penalty fees, you may be able to afford to pay your tax debt.
Although you may be unable to afford a large payment to the IRS, you could be able to manage smaller monthly payments. With a partial payment installment agreement, you can do just that. The agreement allows you to pay a monthly amount that is determined by what you can afford. If you make the payments for a set period of time, the rest of your debt will be erased at the end of the payment period. In most cases, the period is for ten years. However, that timeline can vary. Once your debt expires, you no longer need to fear garnished wages or seized property. The debt is gone.
If you and your spouse file your taxes jointly, you both are liable for the tax debt. But in some cases, the IRS is willing to make an exception. If you qualify for the exception, the IRS can remove the debt from your name. However, your spouse would still have the debt. To find out if you are eligible for this rare type of debt relief, you should speak to a tax expert. They can give you the latest information on the requirements for innocent spouse relief.
Some people think that bankruptcy is a cure-all. While it can eliminate some of your debt, it’s not always the best option. It can impact your credit for years and require you to liquidate your assets. In most situations, this should only be used as a last resort. You should be aware of all the consequences of bankruptcy before going through with it.
What Should You Look for in a Tax Firm?
Not everyone is qualified to handle your IRS debt. In fact, some firms lack the experience and resources you need to get results. To help you find the right expert, you should consider all of these details:
If a company has only been around for a year or two, they may not have the experience you deserve. You should consider how long the company has been in business and how many years their tax professionals have been in the industry.
When you go to a used car lot to buy a car, the salesperson might promise you the world. This is a sales pitch that often ends with unsatisfied customers. If a tax expert makes promises they can’t keep, they aren’t being honest with you. In fact, they are setting you up for failure. You should avoid companies that make guarantees and make you feel as if you are being given a gimmicky sales pitch.
Some companies are all about money. They take on many cases, but don’t spend much time on each individual case. Successful debt settlement takes time. If the company is too busy to give your claim the time it deserves, look elsewhere. Ask them how they plan to handle your case and how you can communicate with them. Some companies have online portals and multiple ways of contacting them. The better the communication channels, the more comfortable you can be. You should be able to get updates on the process as needed.
Some tax companies do it all. While this can be a good thing, you need to be cautious. You should only work with a firm that specializes in negotiating OICs. This means they know what it takes to convince the IRS to accept your settlement. When you speak with someone from the firm, ask them about their specialty niche. If they don’t have much experience with OICs, then you should look for a different firm. In Texas, the median household income is $63,717. Although it might seem like enough money to survive on, debt is still a major issue. IRS debt settlement can make all the difference. If you find yourself struggling with IRS debt, you deserve expert guidance. Contact us at Premier Tax Service and learn more about how we can work towards getting you an IRS debt settlement in Austin and San Antonio, Texas.
If you find yourself struggling with IRS debt, you deserve expert guidance. Contact us at Premier Tax Service and learn more about how we can work towards getting you an IRS debt settlement in Austin and San Antonio, Texas.
