The thought of not being able to pay what you owe the IRS is very scary. There are tax relief programs to help you, if you qualify, the IRS takes settlements, payment plans and other options too. We have all heard how they can put liens on property, a business, garnish or levy your paychecks, and freeze your assets such as checking and savings accounts. There are some tax relief options though that can help. Then you can take care of your tax situation and not have it hanging over you.
Many people don't realize that there are various tax relief options out there though. They feel they are in a losing battle and it can cost them large sums of money. The penalties and interest alone that can be tacked on to what you owe the IRS can result in the debt lingering for a very long time. Don't let that that be what the future holds in store for you.
Get your Tax Returns Looked Over
First, if you have completed your tax return on your own, and you owe a large amount, get a second opinion. It is worth the money to hire a tax professional to look over everything for you. They are well aware of various deductions that you may be eligible for. Something that you overlooked could reduce your tax debt significantly. They will also double check that all of your calculations are correct.
If you have already filed your tax return, this is still one of the tax relief options that can help you. Should the professional tax preparer find differences from what you filed, they can assist you with completed an Amended form called the 1040X. This amended form can be filed for a period of time up to 3 years after the date that you filed your original tax return.
You may Qualify for Tax Abatement
One of the tax relief options that people don't know about is tax abatement. This means that your penalties could be waived by the IRS. Of course they aren't going to offer that information to you. However, it is one of your rights and it means that you can ask them to consider it in your case. They will review your information and look to see if you acted reasonably and in good faith.
They can choose to eliminate all of the penalties that have been assessed on your tax debt. They can also choose to reduce it be a percentage. Every situation is evaluated independently. The IRS is willing to help people, but they often have a reputation that makes people think that it is hopeless to ask for their assistance.
Sending in a letter to the tax abatement coordinator is the first step for this process. It should detail your name, address, and social security number. It should also specifically state the amount of tax penalties that you are asking for abatement for. Then you need to provide them with good reasons.
For example if your spouse has been very ill, there is loss of household income, or someone has passed away in your household. Perhaps you were unable to file your tax return due to a natural disaster. All of your paperwork may have been destroyed. You will need to provide any documentation that you can along with your letter asking for tax abatement.
Verification for Tax Abatement
Some of the items you can include are a death certificate, medical statements from doctors, photos of your home or business after a natural disaster, and notarized affidavits. Make sure you provide a good contact phone number in case they need to follow up with you. They may ask you to provide additional documentation so that they can make a decision on your case.
It never hurts to explore these types of tax relief options. You may find that they offer you a reduction in the amount of money that you owe to the IRS. That can be a big burden that you don't have to face. Don't wait until the IRS is hot on your tail though to evaluate if such options are possible for your own tax situation.
Mike Habib, EA is an IRS licensed Enrolled Agent and focuses his tax practice on resolving his clients tax debt through various tax relief options; he has the tax resolution knowledge, tax relief experience and specialized skill set to assist you. You can reach him directly at 1-877-788-2937.