When you owe money to the IRS, it can be tough to gain control of your finances and remain calm. Your initial reactions may be worry, fear, or stress, but the best thing you can do is take a deep breath and understand that you do have options. In this week's blog, Raichelson Law, P.C. reveals 5 IRS facts you may not be aware of to help you understand your payment options.
1. Payment options do exist.
When the IRS calls to collect, it can be daunting. You may immediately become worried for your financial situation and pay what you owe without question. We suggest taking a moment to survey your payment options because they do exist. Because most taxpayers are not aware that alternative payment methods do exist, they can end up sending the government more money than they can afford to pay.
This can put your financial situation at risk even further. The IRS offers a variety of ways for taxpayers to pay off their tax debt. This includes a payment plan, which requires a qualification process and paperwork to determine eligibility.
2. Accrued interest can make or break your finances.
Did you know that if you do not pay your tax debt, then interest accrues on top of penalties? Dealing with burdensome interest rates can already be difficult, but they can become even more crushing when you have penalty costs added into the mix. Paying on time or opting for an alternative payment option are the best ways to stay on track with your finances.
3. The IRS takes collections seriously.
There is no question that the IRS takes collections seriously. Failure to pay can result in wage and account levies, property liens, and even the denial of a passport. The consequences can be rough to deal with regardless of your financial situation. Consider working with a tax attorney to resolve your tax debt and take the burden off your shoulders.
4. Offers in compromise are an alternative solution.
With an offer in compromise, once a number is agreed upon, the taxpayer can elect to pay the amount in 24 months or less. The advantage of this payment option is that the remainder of the tax debt is forgiven. With this alternative, it is crucial to stay on top of payments to avoid penalties and other potential consequences.
5. Looking into other delayed payment options.
If you are unable to pay your taxes now, but can soon, the IRS offers up to 120 days for taxpayers to pay in full. This payment plan is available for eligible taxpayers who are looking for short-term relief but are still able to pay the amount requested.
The attorneys at Raichelson Law, P.C. help clients through Ventura and Los Angeles counties overcome complex financial adversity. Are you having trouble with taxes? We offer over 20 years of experience in tax debt and tax controversy to help take the burden of debt off your shoulders. Contact us today for a free consultation to learn more about how our tax attorneys can help you.