What Is Tax Debt? It Can Cost You
- June 8, 2019
- Posted by: asal
- Category: Tax Relief
Knowing how you incur tax debt is the first step to preventing tax debt. Back tax debt only becomes frightening when you don’t know how to deal with it. So, do you know what back tax debt is? Do you know how to avoid back taxes? Essentially, tax debt is any taxes that you owe the IRS after the filing deadline. Even if you filed your tax return on time and paid some of your tax debt, it doesn’t matter. The remainder of your back tax balance is considered tax debt. One important thing to do when you have back tax debt is to consult a tax relief professional. Tax resolution experts are intimately familiar with how the IRS works. A tax attorney can negotiate on your behalf to get your tax debt lowered. If you have tax debt and you aren’t sure what to do, call Platinum Tax Defenders today.
Tax Debt Increases Over Time
If you don’t pay your back taxes over time, your tax debt will only increase. The IRS always adds on a penalty to unpaid back taxes. Usually, the IRS charges a 0.5% penalty on the total tax debt amount for failure to pay. The max amount of penalties the IRS can charge on your back taxes is 25% on the full amount. IRS agents charge penalties for each month that you carry a back tax balance. The IRS also charges interest on the total tax debt. Therefore, your total back taxes amount owed increases each month due to penalties and interest. Over time, if your back taxes go unpaid, it can grow into a significant amount. Before your back taxes become a burden, and you can’t pay them back, call a tax attorney. A tax relief professional may even be able to get your penalties removed from your IRS tax debt.
Penalty Abatement For Back Tax Debt
A tax relief professional can get the IRS to reduce or remove the number of penalties on a back tax debt. Even if the IRS believes the reason for non-payment of back taxes is understandable, they never reduce or remove interest. While a tax relief professional can help you reduce penalties, interest remains. Contact a tax relief expert immediately before your interest charges pile up.
Tax relief experts can also help in achieving Penalty Abatement. A Penalty Abatement occurs when the IRS approves to remove all penalties from your back taxes. To achieve Penalty Abatement, you must offer the IRS a “reasonable cause” for not paying your back taxes. The IRS usually considers the following as reasonable causes:
- Natural disaster
- Death in the family
If the reason for not paying back taxes is unpredictable, the IRS will likely consider reducing or forgiving the penalties.
What Does The IRS Do If You Don’t Pay Back Taxes?
If the IRS discovers that you owe taxes, first they’ll attempt to determine how much you owe. Once the IRS understands your back tax debt, they’ll send you a notice asking you to pay. As soon as you receive this notice, you should contact a tax relief professional. A tax resolution expert can get you on track immediately with a tax relief solution. Remember, the IRS will not notify you of ways to settle back taxes. The IRS also won’t inform you about penalty reduction or removal, or any other ways to reduce your back tax debt. The IRS also doesn’t include the deductions or credits that you qualify for when estimating your back tax debt. Therefore, it’s vital that you prepare your case with a tax resolution company before responding to the IRS.
What If You Don’t Settle Back Taxes Right Away?
Even after the IRS has filed a substitute tax return, you can submit your own with deductions for which you qualify. You may also be eligible to pay less in back taxes using tax resolution programs. To find out which tax relief programs are best for your case, contact Platinum Tax Defenders.
When the IRS first discovers you owe back taxes, they will send you a notice, typically in the mail. The notice will provide details on how much you owe in back taxes and when your bill is due. After the IRS sends notifications, they can proceed with the seizure and selling of your property and assets. IRS agents have the power to garnish a taxpayer’s wages and levy their financial accounts. The IRS can seize up to the total amount of taxes owed.
Consult A Tax Professional If You Have Back Tax Debt!
If you can’t pay your back tax debt in full in a single payment, consult a tax resolution service. A tax relief expert can determine payment plans and programs to garner the most beneficial resolution for you. A tax resolution expert can help you apply for programs like Installment Agreements, Currently Not Collectible, and Offer in Compromise. There are many tax resolution options for you. A tax relief expert will take a look at your case to determine which relief option is best. If your back taxes go unpaid, the amount of debt you owe will only increase. Once you don’t pay back your debt, the IRS has no choice but to collect it from you.
Settle Back Taxes By Calling Platinum Tax Defenders Today!
Hiring a tax relief specialist can get you a better deal when attempting to pay off back taxes. A tax attorney can help you determine which repayment method is right for you. The tax resolution specialist can also negotiate with the IRS on your behalf and submit the necessary paperwork. Owing back tax debt can leave you in bad financial shape. The IRS only wants to get what money you owe them in back taxes. Often, they are willing to help you settle back taxes, but you have to know how to try. That’s where a tax relief services company can come in handy. When you hire a tax resolution professional, there are other methods you can use to avoid expensive back tax debt. Call Platinum Tax Defenders for a free consultation today.