A Comprehensive Guide to Settle Back Taxes
- November 12, 2019
- Posted by: Platinum Tax defenders
- Category: Tax Resolution
Being a member of society comes with certain responsibilities that make the individuals held accountable for paying taxes. These responsibilities can be a great help for the state. The reason is that the budget for the expenses comes from the taxes paid by the citizens. One example of a tax that a citizen has to settle back taxes. Guide to Settle Back Taxes
Taxes are the amount of money that citizens pay for so that it can pay for the public services that provide to the state. Imposing taxes is the way of the government to give services to the public, who is the one paying for it. The government uses it to fund different programs, especially for the less fortunate individuals. Since the government uses taxes to serve the citizens, it improves the way of living of the people in a particular society.
Moreover, taxation is the process of imposing levies on a state’s citizens to raise the revenue of the government. It has three purposes: the allocation of the resources, distribution of income, and stability of the economy.
What is the Significance of Settling Taxes?
One important purpose of taxation is the allocation of resources. The government imposes taxation to secure that there will be an equal and justifiable partition of the funds.
Another purpose of taxation is the distribution of income. Workers have their salaries for a living. It compensates for the hard work that they provide for the state. However, it is accompanied by paying taxes to secure the budget of the government. These taxes are what fund the services that the government gives them.
Moreover, taxation is also an important factor for economic stability. A stable economy means a strong state. Having a stable economy simply means that it can provide the needs and necessities of the state for them to be more productive as members of society.
Thus, to attain these purposes, there are different kinds of taxes imposed by the government. One of which is the back taxes. These are taxes that are fully or partially unpaid in the given year that they are due. Back taxes build up penalties and interests regularly.
How to Settle Back Taxes?
Back taxes is a form of tax an individual must settle to avoid any legal conflicts. The first thing an individual has to do when paying for back taxes is to contact the Internal Revenue Service (IRS). Understanding the role of the IRS will help you determine the back taxes that you owe. Such will help you come up with a plan regarding your tax.
These are some of the critical points to determine how to settle with back taxes:
Create an installment plan for your back taxes with the IRS
The Internal Revenue Services (IRS) allows payment of back taxes on a given period of time. If the back tax is of large amount, it is a heavy load to pay it on one time pay. For this reason, an installment plan would be the right decision for settling taxes. IRS installment plans are called installment agreements. IRS agreements have different types. The type of contract that you will get depends on your situation and the amount of balance you have.
Get a loan for back taxes settlement
If an individual wants to settle the back taxes in one payment, he or she can have a loan from a bank. Such is the best way to pay back taxes more comfortably. The interest from the loan would be lesser than the penalties imposed by the IRS. There are also other purposes of taking a loan, such as life insurance.
Avoidance of collections during economic adversities
If a taxpayer is in the middle of difficulty with regards to back taxes, the IRS can provide a solution. Internal Revenue Service will include you in a current not collectible list (CNC). As long as you are on the list, IRS will not impose any collection from you. But, the person under this supervision must have a regular notice of the situation. Such a thing will justify that you are on the list of Currently Not Collectible.
Tax penalties reduction
Penalties accumulate from a tax that an individual fails to pay. Hence, in the case of settling back taxes, the sanctions would be of higher amount since it is a partially or unpaid tax. There must be a justification for the IRS that an individual cannot pay at that particular moment; thus, creating a possibility to reduce the penalty for unpaid taxes.
Hire a tax resolution expert
A tax resolution expert is a professional tax specialist who can help taxpayers. These specialists have certification from the IRS to deal with the clients’ tax issues. They assist the taxpayers in settling taxes, such as back taxes. Consultations and giving of options to the clients will help them decide based on different cases.
What if Back Taxes are Left Unpaid?
An individual has to face the consequences of failing to pay back taxes. The tax authority can use a tax levy to individuals who have back taxes. A tax levy is the toughest collection of the IRS and other taxing authorities. It is used to satisfy the taxes owed by the client. Tax levy also pertains to the actual apprehension of the taxes.
In this case, when the taxpayer is not able to pay for the penalties of the back taxes, his assets will be collected in exchange for the amount that he failed to pay. Tax levy permits the taxing authority or the government to take and sell the assets of the payer to surely pay for the back taxes.
Where to Find Help in Settling Back Taxes?
An individual facing difficulty in paying back tax does not have to worry as there are other ways to settle this tax. Rather than setting it aside and leaving it behind, take action on this by looking for dependent tax resolution services for your tax issues. Tax resolution experts can provide quality services and advice for you to deal with your payment problems.
It is important to know one’s responsibility as part of a community. It will create awareness and accountability for the different consequences and benefits of it. In this regard, experts can help you attain tax relief. Settling back taxes is a serious matter that you need to understand fully. It needs proper attention to take action.
Platinum Tax Defenders as Trusted Back Tax Specialists
When you need tax relief, Platinum Tax Defenders is here to assist you. We are a group of tax professionals who can provide you with tax settling assistance. For more information, visit us at https://platinumtaxdefenders.com. You can also contact us at 1-800-385-6840 for a quality discussion of advice and consultation for you!