There is a new system called the IRS Fresh Start Program which aims to make it easier for people to pay back taxes and avoid a lien coming against them. There are three major parts to the IRS program. Tax liens, installment agreements and offers of compromise are the three features of the program.
The program increases the amount a person can owe before the IRS will file a notice of federal tax lien. Even though the IRS can file before the 10,000 limit this does increase it for the average person.
The IRS has also agreed to more installment options. One can file for an installment plan right over the internet. This could increase monthly payments for up to six years. If the agreement needs to be extended for longer than six years, financial hardship would have to be shown to the IRS.
Offers in Compromise are another agreement for taxpayers to be able to pay off debt but at a lesser amount. The IRS is now more flexible in its way to look at the taxpayers ability to pay. Generally the IRS will accept an offer if they feel it is a fair amount for a reasonable amount of time offered.
This new program will hopefully help taxpayers starting with the 2012 taxes. With compromise from both the IRS and the taxpayer all parties can be satisfied. The taxpayers will also feel less likely that they are being targeted and forced to pay amounts that they can never reach.
If you are looking for IRS tax relief information, maybe this will help you. The IRS has several tax relief programs for people who owe back taxes.
There is an Installment Agreement available to people who don’t have the money to pay their tax debt all at once. The program lets people make monthly payments until the whole debt is paid off. Another one that they have is an Offer in Compromise. This lets taxpayers settle their tax debt for less than the amount that they need to pay. The OIC helps taxpayers in limited circumstances.
In some circumstances, the IRS may do penalty abatement to those who did not pay their taxes because of a special hardship. If the person meets the criteria, the IRS may forgive the penalties. The interest abatement is even more limited and is hardly ever provided.
You can apply for an OIC, Installment Agreement, or interest or penalty abatement without getting the help of a third party. If you would like someone to represent you, only a select few can help.
So if you are in need of tax relief, you should look into what programs you qualify and check with the IRS to see if they can help resolve your problems.
As an increasingly large number of taxpayers in the US are defaulting on their tax payments, they found out that owing money to Uncle Sam can become a significant problem in the long run. For all those people who fall in the low income bracket, tax debt can be easily avoided but if they do, it should be dealt with quickly and smartly. The problem of unpaid tax debt can soon spiral out of control if not addressed properly through the debt solutions that are available for the debtors. While you may get help from a tax attorney during the tax debt negotiation process, you can also take some DIY steps to avoid being charged unnecessary fees and charges. However, there are some secrets that your tax attorney may not want you to know. Read on to know the tax debt relief secrets that can open your eyes and prevent you from paying the tax lawyer to do work that you can do yourself.
The data entry clerks work on the debtor’s delinquent tax case
When a person is drowning in a sea of IRS tax debt and is also receiving harassing debt collection calls, he becomes desperate about paying back the money by getting help of a tax attorney. They think that negotiating delinquent taxes is beyond their ability but the actual fact is that this work is done by the data entry clerks and not by their tax lawyers. That only a tax attorney can resolve tax issues is a wrong notion that most tax debtors harbor. No one will inform you that majority of the paperwork is prepared by the data entry clerks and the so-called ‘tax lawyers’ simply type the data into the IRS form.
The fees charged are based on how much you can pay and how urgent is your case
You may not be aware of this but the fees that your tax attorney charges you are entirely based on the amount that you can pay and the extent of urgency of your tax delinquency case. Your case may be termed as ‘urgent’ if you’re presently facing tax garnishment of your paycheck or have got a verbal threat from an IRS agent. So, only when you’re under the tax levy, your tax attorney will charge you sky-high fees and even demand upfront payment. So, if you want to avoid them, try out the tax debt solutions like OIC or Offer in Compromise on your own.
A tax attorney hardly spends an hour working on your case
When you’re looking for debt relief options to exterminate your IRS tax debt, you should take wise decisions so that wrong steps don’t dig you further into the debt hole when you’re already defaulting. Most debtors can never talk to the actual attorney because this may take double time than what they spend for your case. If you give a glance at the Offer in Compromise paperwork, you’ll understand. The seemingly-complex forms only contain data about your car payments, electricity bills and address, which is the exact information that you provided to the tax debt firm. Do you need a tax lawyer for the data-entry work? Bet you wouldn’t, that too in lieu of heavy charges!
Therefore, when you missed your IRS tax payments and have amassed a huge amount to be paid at once, negotiate with the IRS representatives on your own. Look for worthy tax debt solutions and take the steps on your own to avoid being subject to outrageously high fees from the tax attorneys.
Getting a letter from the Internal Revenue Service stating you’ve been selected for audit is a taxpayer’s worst nightmare and can create a lot of anxiety.
Sometimes these notices are simple, such as you forgot to sign a document or you made a math error. The more ominous possibilities, however, will question your income, deduction claims, and more.
The IRS definition of an audit states that is simple a review of a taxpayer’s return used to verify the tax amount paid and reported is correct. If you happen to be selected for an audit, the IRS website has videos and guides to help you through the process.
In 2011 alone, nearly 1.6 million people were audited. This is slightly more than 1% of the total returns filed. Three foruths of these were completed by correspondence alone, and only one quarter required a field agent examination (in person.)
On income levels, only 1% of those with an income level of less than $200,000 were audited, while 12.5% of those who made $1 million or more were audited.
A spokesperson for the IRS, Terry Lemons, has said that the majority of taxpayers will never have to worry about an audit because their tax returns are filled out accurately.
While there is no magic equation to how the IRS selects who to audit, TurboTax can help you avoid many of the “red flags,” such as significant differences in income or deductions from those within the same demographic, in your 2012 taxes.