When you face significant IRS or other tax debts, you can face serious disruptions to your goals and financial plans. When a potential client walks through the doors of the Cook CPA Group, they are frequently worried and anxious over an array of “what ifs.” The taxpayer will often ask about whether he or she is likely to lose their family home or other assets to satisfy their tax debts. Furthermore, due to a high prevalence of tax scammers, they may wonder if they actually are subject to arrest for their tax debts.
While being in tax debt is never good news, the silver lining is that you cannot generally go to jail just for not filing or paying taxes. With that said, failing to comply with one’s tax duties is never a good idea for a taxpayer. Furthermore due to penalties and interest on unpaid tax obligations, the longer a taxpayer fails to address tax debts, the worse the problem gets.
The tax professionals at the Cook CPA Group can assist with an array of tax debt concerns. To discuss how we may be able to secure tax relief for you, please call our Roseville accounting firm at 916-432-2218.
Why Do People Face Significant Tax Debts?
There are many reasons why people can come to face significant IRS or other tax debts. For some people who may start a side business or try to earn additional funds as an independent contractor, they may not be aware that self-employment comes with special tax rules. Namely, the taxpayer is required to pay the self-employment tax which roughly equates to the tax that is normally paid by the employer. Taxpayers who did not realize that this obligation was due, may be shocked to find a huge tax bill when they file. Over time, penalties and interest can cause the bill to grow even larger.
Other reasons for serious tax debts and problems include:
- The taxpayer failed to file taxes for one year or for multiple tax years.
- The taxpayer was involved in a divorce and did not plan of capital gains due to an existing basis in community property.
- The taxpayer received income by cashing in a retirement account or IRA early.
- The taxpayer made claims for tax deductions or credits that he or she did not have evidence to support.
- The taxpayer had offshore income that was not reported as part of a tax filing or offshore disclosure like FBAR or FATCA.
Taxpayers can face tax debts through an array of circumstances. Regardless of how you fell behind on taxes, the CPAs and tax professionals of the Cook CPA Group may be able to help you get a handle on your finances.
How Can I Fix Tax Debt Problems?
If you have fallen behind on taxes, you don’t have to feel like you are inevitably stuck with a huge tax bill. The IRS realizes and recognizes that a large tax bill can be a huge hardship for a taxpayer. When you face an unmanageable tax debt, you may be able to apply for certain forms of tax relief provided by the IRS.
However, the IRS has a certain approach to a request for tax relief. One of the considerations to make is the taxpayer’s “reasonable collection potential.” Taxpayers who include these considerations in their own relief requests to the IRS may have an increased likelihood of securing tax relief. Potential forms of tax relief that our team of accountants can help you apply for include:
- Offer in compromise – An offer in compromise can permit a taxpayer to settle a tax debt with the IRS for less than its face value. In some cases, the discount can be significant. However, an OIC is not readily granted and a taxpayer must include significant proof.
- Tax payment plan – The IRS recognizes that thousands of dollars in tax debts or greater may be impossible for a taxpayer to pay off at once. As such, the agency makes various payment plan options available. An accountant can help you understand the benefits and drawbacks of each program and help you apply.
- Tax Lein relief – If you owe the IRS greater than $10,000. You could face a tax lien against your property. We can seek options to get the lien against your property released.
- Tax levy relief – If you face a tax levy, you face a time-sensitive situation where inaction will likely lead to the loss of your home, car or other impacted property. Depending on the situation faced, a tax professional may be able to protect your property.
The tax professionals of the Cook CPA Group can explore a number of solutions to your tax debt concerns.
Work With Tax Debt Relief Professionals in Roseville
If you have concerns about tax debts or have received notices from IRS, the accountants of the Cook CPA Group may be able to help. To schedule a free and confidential consultation at our Roseville accounting firm, please call 916-432-2218 today.