3 Steps to Resolve Tax Debt with IRS
When it comes to ignoring things, you may choose to ignore several things in life- dishes in the sink or mowing your lawn but one thing that you should never ignore is your tax debt. The IRS is really strict regarding unpaid tax and is dedicated to taking stringent actions to recover unpaid taxes. Ignoring your tax debts can lead to hefty penalties and recovery actions from the IRS such as a federal lien, wage garnishment or even prison time. Don’t know how to handle your tax debt? Read on as we discuss three steps to handle your tax debt to lower penalties and resolve your obligation.
1. File Your Tax Returns
Filing a tax return is necessary even if you are unable to pay the entire tax amount you owe. If you don’t file your tax return by the deadline, you could be charged with a monthly penalty of 5% of the amount you owe to the IRS, up to a maximum of 25% of the balance amount you owe. This will make your tax debt a lot worse. If you need more time to file your returns, you can appeal for an extension.
2. Hire a Tax Attorney
Handling tax debt is not easy and you should not try to do it on your own. It is recommended to consult a qualified tax attorney who can help you handle your tax debt. IRS tax attorneys have deep knowledge of the tax code and they can help you find options to get IRS debt relief. In addition to that, your IRS tax attorney can help you to file your tax returns correctly so that you do not attract any further penalties because of errors in tax returns.
3. Request for a Payment Plan
If you are unable to pay your entire tax amount within 120 days, you also have other options that can help you manage your tax debts. There are several payment options that the IRS offers such as IRS installment agreement or an offer in compromise (OIC). Work with your tax attorney to determine which payment option applies to you and suits your situation.
Wrap Up
Handling tax debts can be daunting, but if you work with a qualified tax attorney, you can definitely find some IRS debt relief and find a way to resolve your tax debt issues. If you or a loved one is facing tax debt issues and seeking professional help in and around Dallas, Texas, connect with a qualified tax attorney who has the knowledge and experience in helping clients in resolving their tax issues with the IRS.