12 Sep Drowning in Tax Debt? There is a way out
Tax debt and IRS collection notices infuse instant stress and anxiety for taxpayers who are already drowning under deep financial pressure to pay their bills and debts. Even in the most hopeless of situations, the worst course of action is to do nothing as penalties and interest on back taxes will continue to compound.
Beginning with multiple notices of tax due that increase in urgency, the IRS, or state tax agency, will make several attempts to collect. If all notices go unanswered, they will issue a “Notice of Federal Tax Lien,” a public document to notify creditors that they have a legal right to the taxpayer’s assets. After the lien is issued, the IRS will move forward with a “Notice Of Intent To Levy,” to seize the assets in order to obtain funds to satisfy the tax debt.
The IRS, or state tax agency, will issue levies on bank accounts, wage garnishments to employers, and even a “Demand For Payment” notice to all accounts receivable for self-employed taxpayers that can ruin professional reputation. The latter can be the most damaging of the collection processes because income is stopped, and once customers receive these notices, they will think twice about doing business with the taxpayer.
Getting professional help is the best way to obtain IRS collection relief. A tax practitioner can provide consultation on the best course of action, such as:
- Requesting an installment agreement for underpaid taxes.
- Submitting an Offer In Compromise for to request to settle tax debt for less than the balance due.
- Filing missing returns, or amending previous returns, to possibly reduce the taxes due.
- Quickly and efficiently requesting a release of levies or wage garnishments.
When it comes to tax debt, time is of the essence to get a hold on things before they spiral out of control, so contact a tax professional today.