Help When Dealing With Taxes
Help with tax problems
Cymru Debt and money Tax Problems with tax Help with tax problems
Many people find tax matters confusing, but there are ways of getting help. We've listed some of the most common sources of help below.
If you have a tax problem and you are an employee, you may be able to get help about a tax code or PAYE from your employer.
There are a number of websites that provide useful information about tax:
If the problem cannot be sorted out by talking to your employer, or looking on a website, the next step is to contact HMRC. Usually, you will need to do this by telephone.
You can contact HMRC on the Taxes Helpline for individuals and employees, including pensioners and people on benefits, on 0300 200 3300 (Textphone 0300 200 3319 for people who are deaf or hearing or speech impaired).
If you are newly self-employed, contact the Newly Self-Employed Helpline on 0300 200 3504 (Textphone 0845 915 3296).If you need help with Self Assessment, contact the Self Assessment Helpline on 0300 200 3310 (Textphone 0300 200 3319 ).
For other HMRC helplines, see their website at http://search.hmrc.gov.uk.
When you contact HMRC, you must be ready to quote your national insurance number and your employer's tax reference number. If you don't know the tax reference number, your employer must give it to you if you ask for it. Or look on your payslip, P45 or P60.
In some cases, you can contact HMRC using an online form. This may be more convenient than using a helpline when the lines are frequently busy. However, you can only do this for certain topics. For example, you can use online forms on GOV.UK to:
Set up a personal tax account with HMRC
You can check your tax information and manage your details with HMRC by setting up a personal tax account.
HMRC provides a special service for people who need extra help with their tax, tax credits or Child Benefit. It replaces some of the services that used to be provided by HMRC Enquiry Centres, which are closing down.
When you contact an HMRC helpline, the helpline staff will decide whether you need extra help and will put you in touch with the service which is best able to help you.
In some cases, this could be by talking on the phone to a specialist adviser, who will take the time to try to resolve your query in one call.
In other cases, where HMRC staff decide that a face-to-face meeting is most appropriate, they can arrange to meet you at a convenient place local to you or in your own home.
You can read more about this service on the HMRC website.
If you need extra help from HMRC with your tax, you can:
- phone HMRC on one of their helplines (see above), or
- contact your nearest Citizens Advice Bureau who can help sort out your problem or contact HMRC on your behalf.
If HMRC aren’t able to resolve the problem, then you may quality for help from a tax charity, Tax Aid or Tax Help for Older People, who can give advice about tax if you’re on a low income.
If you can't get a satisfactory answer to your tax problem and you are on a low income, a specialist tax charity may be able to help you. There are two main tax charities:
- Tax Help for Older People (TOP).
TaxAid runs a national telephone helpline service and face-to-face advice sessions in London and some major cities for people on a low income. They define low income as around £20,000 per year or less.
They provide free and independent advice, assistance and advocacy to people who need help with tax or tax debt.
They can help with problems about tax allowances, PAYE codes, tax arrears, self-employment, tax returns and HM Revenue and Customs administration and complaints.You should try to sort out the problem first with HMRC and look at their website before contacting them. Their tax specialists can often advise how to resolve the problem over the phone. If the problem is complex, they may be able to offer you an appointment, but call or email them first. Their contact details are:
TaxAidTel: 0345 120 3779 (Mon to Fri 10am to 12 noon)
TaxHelp for Older People
TaxHelp for Older People (TOP) is a free confidential service providing tax advice for pensioners over 60 on low incomes who cannot afford to employ a professional tax adviser. They define low income as less than £20,000 per year.
Appointments can be arranged at offices such as at Age UK, or at your local Citizens Advice Bureau. Home visits can be arranged if you are disabled.
Their contact details are:
TaxHelp for Older PeoplePineapple Business ParkSalway AshBridportDorset
Helpline: 01308 488 066 (Mon to Thurs 9am to 5pm and Fri 9am to 4.30pm)
Fee-charging tax advisers
If your income is too high to qualify for advice from a tax charity, you may need to consult a commercial firm of advisers, who will charge a fee. The following professional bodies will help you find a local specialist:
Institute of Chartered Accountants in England and Wales (ICAEW)Level 1, Metropolitan House321 Avebury BoulevardMilton KeynesMK9 2FZTel: 01908 248100Fax: 01908 248088
The Institute of Chartered Accountants of Scotland
CA House21 Haymarket YardsEdinburghEH12 5BHTel: 0131 347 0100Fax: 0131 347 0105
Chartered Accountants IrelandThe Linenhall32-38 Linenhall StreetBelfast
Tel: 028 9043 5840Fax: 028 9023 0071
Challenging a tax decision and negotiating with HM Revenue and Customs
If your problem has still not been sorted out, you may wish to challenge it, or negotiate, with HM Revenue and Customs (HMRC) The procedure to follow and the correct office depend on the type of challenge or dispute.
Some of the main procedures are:
- appealing, for example, against a calculation of tax liability or a PAYE code. A factsheet about appealing against a decision of HMRC is available on the GOV.UK website at: www.gov.uk
- seeking a waiver, because of HMRC delays
- negotiating tax debts. There is lots of useful information about dealing with tax debts on the Tax Aid website at: www.taxaid.org.uk
- complaining about HMRC conduct. HMRC publishes a charter about what you can expect from them, and what they expect from you. You might find it helpful to look at the charter before you make a complaint. You can find the charter on the GOV.UK website at: www.gov.uk
When dealing with any query or negotiation, whether in writing, over the phone or in person, remember the following tips:
- prepare in advance
- make a note of the relevant facts
- collect all available evidence
- have a clear idea of what outcome you want
- make a record of who you speak to and what is said
- try to stay calm
- say thank you if your contact was helpful and mention any helpful advice you get in any letters you write
- be persistent
- ask about any appeal process.
For more information about how to challenge or negotiate with HMRC, you should see an adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.
If you are not satisfied by the outcome or your complaint or negotiation, you may want to take matters further by complaining to the Adjudicator or Ombudsman.
You might also want to consult with a tax charity or specialist tax adviser before you do this.
The Adjudicator's Office
The Adjudicator's Office considers complaints of maladministration by HM Revenue and Customs (HMRC), for example:
- excessive delay
The Adjudicator's Office will not consider:
- legal disputes
- complaints that have already been investigated by the Parliamentary and Health Service Ombudsman — see below
- appeals against property valuations, including appeals against council tax bandings. These should be referred to Valuation Tribunals
For more details, see Council tax.
- matters relating to a criminal prosecution during the course of legal proceedings.
A complaint should not usually be referred to the Adjudicator's Office until you have given HMRC a chance to remedy matters.
The contact details of the Adjudicator's Office are:
The Adjudicator's OfficePO Box 10280Nottingham
Tel: 0300 057 1111Fax: 0300 057 1212
The Parliamentary and Health Service Ombudsman
The Parliamentary and Health Service Ombudsman may be able to help with complaints against HM Revenue and Customs if, for example, there has been:
- avoidable delay
- failure to give appropriate advice
- failure to follow proper procedures.
The Ombudsman cannot investigate complaints about government policy or about tax legislation.
If you want to complain to the Parliamentary and Health Service Ombudsman, you must first contact your MP and ask for the matter to be referred.
For more details about the ombudsman, in England, see How to use an ombudsman in England, in Wales, see How to use an ombudsman in Wales, in Northern Ireland, see How to use an ombudsman in Northern Ireland or in Scotland, see How to use an ombudsman in Scotland.
Benefits and Taxes when Someone Dies
The UK Rules
The process of dealing with tax and benefits after a death is simple with the Tell Us Once service. HMRC and the DWP will contact you about the tax, benefits, and entitlements of the deceased person.
WHO TO NOTIFY: You will need to contact several organisations if you did not use the cross-government service.
How to Contact HM Revenue and Customs
One of the first organisations you should contact is HMRC (Her Majesty's Revenue and Customs).
HMRC Bereavement Helpline Telephone: 0300 200 3300 Outside UK: +44 135 535 9022
Monday to Friday: 8am to 8pm
They will work out whether the person who died paid the correct amount of tax. Once you make contact with HMRC they will tell you:
- Whether any taxes need collecting or need paying.
- If a Self Assessment tax return needs filing on behalf of the deceased person. This applies most if the estate continues to receive a source of income.
HMRC has a bereavement tool to help you work out which forms to fill in and where they need sending. In some cases, Inheritance Tax may be due on the estate when someone dies.
Contacting the Tax Credit Office
The Tax Credit Office deal with issues where your partner dies or a child you are taking care of dies. You must contact them within one (1) month of the death.
Tax Credit Office Telephone: 0345 300 3900 Textphone: 0345 300 3909 Outside UK: +44 2890 538 192
Monday to Friday: 8am to 8pm
Follow UK Rules for 2019 Updates!
You will need to contact the NI Contributions Office online or by post. NI payments will need cancelling if the person was self-employed. The same applies if they were paying voluntary National Insurance contributions.
Child Benefit Office
If a child or their parent dies you will need to contact the Child Benefit Office. There is an eight (8) week deadline to deal with Child Benefit issues after a death of a child or a baby.
Department for Work and Pensions (DWP)
If you contact the bereavement service they will help you cancel any benefits and entitlements. They can cancel the State Pension of someone who died. The bereavement service will also check whether you can get help with funeral costs.
DWP Bereavement Service Telephone: 0800 731 0469 Textphone: 0800 731 0464 Welsh language: 0800 731 0453 Welsh textphone: 0800 731 0456
Get information on call charges.
Personal, Workplace and Armed Forces Pensions
The type of pension the deceased person had will determine what steps you need to take. The Pension Tracing Service will help you find details of the dead person's pension. This applies to personal pensions as well as a workplace pension.
Pension Tracing Service Telephone: 0800 731 0193 Outside UK: +44 (0)191 215 4491 Textphone: 0800 731 0176 Monday to Friday: 8am to 6pm Check call charges to 0800 numbers. The Pension Service 9 Mail Handling Site A Wolverhampton
Contact Veterans UK if the person who passed away had an armed forces pension.
Veterans UK Pension Division Mail Point 480 Kentigern House 65 Brown Street Glasgow, G2 8EX
Telephone: 0800 085 3600
Grant of Representation (probate)
Applying for a grant of representation can give you certain legal rights. It means you can deal with a deceased person's property, money, and possessions.
This would give you access to their 'estate'. In legal terms, this is also known as 'probate' or 'confirmation' in Scotland.
Besides contacting HMRC for help, you can also get advice about dealing with tax after someone dies by hiring a professional. In some cases, you can get free tax advice if your income is in the low bracket.
ALSO IN THIS SECTION
After a Death: Find out how to register a death, deal with a coroner, and arrange a funeral.
Tell Us Once Service: A simple way of reporting a death to most government organisations in one go.
If a Child or Baby Dies: You may need to report the death of a child to other organisations.
Deaths Abroad: A list of things to do if a United Kingdom citizen dies in an overseas country.
Dealing with Tax and Benefits after a Death in the United Kingdom
Last Updated 2019
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11 Tips for Dealing With Back Taxes
Unfiled tax returns and unpaid taxes can add up to trouble. most people, you probably don’t relish preparing your annual income tax returns. But what happens if you don’t file your taxes? The simple answer is that you will incur back taxes — and eventually, you’ll need to deal with them.
Find Out: How to Pay Off Back Taxes
Back taxes are taxes that aren’t paid by the tax filing deadline, which causes you to be delinquent in the eyes of the IRS.
Back taxes can be unintentional, meaning that you made a mistake in your calculations or took a deduction you weren’t entitled to, which resulted in you owing more tax than you calculated when you filed your return.
Back taxes can also be intentional, meaning that you purposely paid less tax than you owed or that you didn’t declare all of your income.
If you are married and you believe only your spouse should be liable for the back taxes you owe, you might be eligible for innocent spouse relief. You could also be eligible for this if you are divorced from your spouse. You will need to complete IRS Form 8857, Request for Innocent Spouse Relief, explaining why you feel you are not responsible for the taxes incurred.
Regardless of the reason, it’s important to pay your back taxes. When you’re delinquent, take control of your situation by protecting your rights and coming up with a plan. A tax professional can be a valuable resource in helping you file your tax return in a timely and affordable manner.
No matter what your excuse is, you must file and pay your taxes to avoid further penalties from the IRS. Here are 11 tips for dealing with back taxes:
1. Understand the Process
Receiving a letter from the IRS might be your first clue that you owe back taxes. The letter should tell you how much you owe from specific tax years and when the payment is due. If you can, pay that bill in full by the due date. Once you do that, you will have satisfied your obligation to the IRS — at least until the next time your taxes are due.
Know:10 Tax Loopholes That Could Save You Thousands
2. Get Help From a Licensed Tax Professional
Receiving a notice from the IRS would raise anyone’s blood pressure. Before you jump into action, contact a qualified tax professional for delinquent tax help.
“You are entitled to tax representation in any matter with the IRS, and you should never try to handle any tax issues without proper representation,” said Michael Raanan, MBA, enrolled agent, owner of Landmark Tax Group and a former IRS agent.
Reach out to the IRS and a tax professional immediately if the IRS has already started contacting you to collect. “You can ask the IRS to briefly halt any collection activities until you have secured tax representation,” Raanan said. “Do not hesitate to do so, as a long delay will only make things worse.”
3. Understand Your Rights and Options
Although you shouldn’t delay tackling your tax problems, you need to know your legal rights before taking action. “Do not let the IRS intimidate you into thinking you have no option but to immediately pay the amount of your back taxes in full,” Raanan said. “IRS agents can be quite threatening, so it is important you remain calm and collected and understand your options.”
A licensed tax professional can help you understand your rights and teach you how to file back taxes. You might have more possibilities and payment options than you think.
Options:9 Legal Shelters to Protect Your Money
4. File Every Tax Return Even If You Can’t Pay
No matter why you’re delayed, file your past-due tax returns as soon as possible. A late tax return can be expensive: The failure-to-file penalty can be 10 times as much as the penalty for failing to pay.
“The penalty for late filing is 5 percent of the unpaid taxes for each month that the tax return is late,” said Josh Zimmelman, owner of Westwood Tax & Consulting, a New York-based accounting firm. “The penalty for late payment is 0.5 percent of your unpaid taxes for each month that the payment is late.”
Each day you wait to initiate your tax filing and pay what’s owed, the worse your problem will become. Make sure you file in a timely manner so that the penalties don’t skyrocket. You can file back tax returns anytime, so don’t assume that too much time has elapsed and you no longer have to file.
5. Request an Extension
Individual taxpayers might get an extension to file tax returns by up to six months — or longer if you’re located overseas. To request an extension, file Form 4868, which extends the filing deadline but not the payment deadline.
You might not be liable for the failure-to-pay tax penalty if you pay at least 90 percent of the amount due by the tax deadline. But this relief only applies if you pay the outstanding balance by your extension date. Otherwise, you’ll owe interest extending back to the original due date.
6. Set Up an Installment Agreement
The IRS might be willing to set up a monthly payment agreement if you owe less than $50,000 in combined tax, penalties and interest, and you’ve filed all your required returns. Short-term installment agreements might be available for balances up to $100,000.
Use the IRS online payment application to find out whether an installment agreement is available for your situation.If you successfully set up a monthly payment agreement, make sure you stick to your repayment schedule. “In the event that you miss a required IRS deadline, it has the right to revoke the payment arrangement and restart the collection process,” Raanan said.
While you are under an installment agreement, any IRS tax refund that might be due to you in future years won’t be sent to you — instead, it will be credited to the outstanding balance on your installment agreement.
7. Pay by Credit Card
Although you don’t want to increase your personal debt in addition to your taxes due, you can choose to make a payment by credit card to help take care of your tax bill.
“Even though you might end up paying interest charges on your credit card balance, depending on your [credit card interest] rate, that might still be cheaper than paying the IRS’ fines and interest charges,” Zimmelman said.
Taxes paid by credit card go through a commercial payment processor, not the IRS, and will incur an added fee that might be tax-deductible. Check the IRS’ website for a list of processors.
Don’t Miss: Is Taking Out Loans to Pay the IRS a Good Idea?
8. Make an Offer in Compromise
As a last option, you might be able to negotiate with the IRS. “If you can prove that you cannot afford to pay your taxes, the IRS may be willing to make a compromise and reduce your balance,” Zimmelman said.
The IRS will consider your entire financial situation, including your income, expenses, assets and ability to pay. You might be approved for a lump sum or periodic payments. In either case, you must have filed all required returns unless you have an extension for the current tax year.
Check out the IRS’ online offer-in-compromise pre-qualifier tool to see if you might be eligible.
9. Communicate and Keep Records
To ensure the delivery of your communications, send everything to the IRS via certified mail with a return receipt. It will show that you sent your tax return and someone at the IRS signed for it.
Make sure a postal employee postmarks your receipt if you opt to use certified mail. The date of the receipt will serve as the postmark date. Again, keep your receipt for proof of delivery.
10. Don’t Dig a Deeper Hole
Don’t let history repeat itself by missing the yearly tax deadline and digging an even deeper hole of tax penalties and debt. Also, don’t make the mistake of thinking you shouldn’t file the current year’s taxes because you failed to file last year. The IRS will hold you responsible for each delinquent tax return.
Most importantly, never ignore the IRS: “If you do not take heed to any letters or calls you may be receiving from the IRS in an attempt to collect back taxes, it could lead to serious consequences such as bank levies, tax liens and wage garnishments,” Raanan said.
Turn Things Around: How to File Taxes Early — and Get Your Return Faster
11. Resolve Your Tax Issues Now
Tax returns serve a variety of purposes: You might need them to apply for student financial aid, a mortgage or a personal or business loan. In addition, your Social Security, disability and Medicare benefits are your reported earnings.
Fortunately, you have options when your delinquent taxes become a problem or if you’re facing a tax audit. Tax information is tricky, however, and the repercussions for failing to file or pay can be substantial — so act quickly.
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Karen Doyle contributed to the reporting for this article.
Should You Lawyer Up When Dealing With the IRS?
June 2, 2014
Yes, absolutely. But hey, this is a blog for a tax relief company with a small army of tax lawyers, so that’s what we’re paid to say, right? Well, yes, but it doesn’t make it any less true.
Maybe these two true life stories will help:
In January, 2014, Beanie Beans founder Ty Werner was convicted of evading $5.5 million dollartaxs in taxes owed on the $27 million in interest accrued from millions of dollars stashed away in a Swiss bank account. The sentence? Two years on probation and some hefty fines, which were small change for a billionaire Werner.
Unrelated, and a couple of months earlier, Daniel Thody, a defense contractor was found guilty to five counts of tax evasion for failing to report $15,000 and $50,000 in taxes from $1.8 million earned as a contractor for the Department of Defense. He faces up to 25 years in prison, 5 years for each count.
Which one do you think hired a lawyer and which one thought representing himself would be the smarter option? The old adage that he who represents himself has a fool for a client may be a cliché, but that doesn’t make it any less true either.
We’ve already shared the 10 benefits of working with a tax relief firm, but here are a few good reasons you should lawyer up when dealing with the IRS.
Taxpayers with Legal Counsel are Treated Better
It’s unfair, even illegal, but it’s also human nature. IRS agents are flesh and blood and if they can get away with bullying someone into their interpretation of the law, they probably will. A tax lawyer can ensure the IRS is playing by the rules and treating you fairly.
IRS investigators are much more careful about asking inappropriate questions or wasting your time with unnecessary requirements, if they know they are dealing with a tax attorney.
That was the finding of an investigation into nine groups in Ohio and Kentucky that sought nonprofit status.
Organizations that didn’t have legal representation were more ly to have their applications stalled and receive inappropriate or unnecessary questions from the IRS.
You don’t have to worry about an IRS agent getting upset with you for hiring a tax attorney either.
The good ones prefer dealing with tax professionals because they don’t have to waste their time and patience explaining you the ABCs of a tax audit or the basic IRS guidelines for a criminal investigation.
In fact, hiring an experienced tax attorney is generally seen as a sign of good faith to resolve your tax issues.
A few bad eggs may resent you hiring a lawyer and try to dissuade from doing so, but that’s when you really need a lawyer in your corner.The IRS’s own Declaration of Taxpayer Rights clearly states that “If you are in an interview and ask to consult such a person [a lawyer, agent or accountant], then we must stop and reschedule the interview in most cases.
” Be suspicious if an IRS agent prefers not to deal with a tax professional.
The IRS Has Serious Muscle
The IRS is a behemoth of an agency, one of the most powerful organizations on the planet. From 2008 through to 2014, over 50 bankers from Switzerland, India, Israel and other countries have been indicted for helping rich Americans squirrel billions of dollars into offshore accounts.
If you think this is just posturing, you may want to talk to former banker Raoul Weil. In October 2013, he was picked up in Italy while on vacation with his wife and extradited to the United States.
He is now on trial for conspiring to help thousands of Americans hide $20 billion in numbered accounts at UBS.
In 2013, the IRS also cracked the code of silence of Swiss financial institutions and got UBS, the largest Swiss Bank, to divulge confidential information on American tax evaders, and pay a $780 million penalty.
Even The IRS Thinks You Need a Lawyer
The Taxpayer Advocate Service is an independent organization within the IRS which has the job of ensuring that you are treated fairly and helping you resolve problems with the IRS.
Although it’s unly a Taxpayer Advocate Service lawyer will protect your interests quite as aggressively as a regular tax attorney, they are better than nothing, if you can’t afford to pay one.
If money is an issue, there is another option: Low Income Taxpayer Clinics.
Although these clinics are partially funded by the IRS, they are completely independent and are operated by nonprofit organizations and academic institutions.
Only a Tax Attorney Can Represent You in a Criminal Investigation
Certified Public Accountants are great. When it comes to tax planning, business budgeting and asset management, a CPA is – all things being equal – more useful than a tax attorney is. But when you have a dispute with the IRS, especially if you’re accused of tax fraud or tax evasion, a tax lawyer is the only intelligent choice.
Tax attorneys are the only ones who can represent you in a court of law and provide you the legal advice and analysis you need.
If that is not reason enough, I have two and a half words for you: attorney-client privilege. Un CPAs and accountants, attorneys cannot be subpoenaed to testify against a client in a criminal procedure.
If You Think You Need A Lawyer You Probably Do
Does this mean you need a tax lawyer every time you get a letter from the IRS. No, of course not. You can probably deal with small mistakes and omissions by yourself or by giving your tax preparer a quick call.
However, if there is any chance your case could go sour, you need to call a qualified and experienced tax attorney, and pronto. A good rule of thumb is that if you’re asking yourself whether it’s serious enough to merit calling a lawyer, it probably is.
A quick consultation call with a tax lawyer can save you thousands of dollars in unnecessary legal fees you could have avoided by not procrastinating. Tax lawyers know how IRS attorney think, jeez, many tax attorneys worked as IRS attorneys before hanging their own shingle.
So they know what to say, what not to say, and what buttons to push when negotiating your case.
Hiring a lawyer sends the IRS a clear and powerful message. You’re taking the investigation seriously; you’re not going to let IRS agents push you around; and you want to work with the IRS to avoid criminal charges
The bottom line is that the IRS is scary enough when you have a first-rate lawyer at your side. So hire one already.
Back Taxes Help
Facing the reality of back taxes can be a daunting experience, whether it’s for personal unpaid taxes or those resulting from payroll, but it’s never too late to file your back tax returns. For many people, their first notice of back taxes is when a levy hits their paycheck, bank account, or both.
Others receive correspondence from a State or IRS auditor, claiming that they owe thousands of dollars – together with substantial penalties and interest – for past tax returns. Some fail when filing back taxes perhaps believing that they are not required to file, only to find that the IRS has filed their returns for them.
Faced with mounds of IRS correspondence, some people feel too overwhelmed to act, which further compounds their problems.
It is important that those who are experiencing back taxes act as quickly and efficiently as possible. As stated further on, the consequences for not handling a back tax problem can be monumental. If there’s an issue, consulting a tax professional is the tax payer’s best option in ensuring the taxes are handled correctly, and that they don’t accrue any further penalties.
We can help.
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One of the first questions regarding back tax help that an expert will ask is how much is actually owed to the IRS. This information helps to whittle down the options that they will be able to present.Many factors can make one eligible or ineligible for the many different types of back tax help. The programs can differ depending on size of the debt, the taxpayer’s current income, and even the age of the debt.
This information comes in useful for back tax help once the tax expert is negotiating on the taxpayer’s behalf.
What are the Consequences of Not Filing Back Taxes?
The consequences for failing to pay taxes and failing to file taxes are vastly different, with failure to file incurring much higher rates of penalty.
If taxes remain unpaid, a truant taxpayer may be charged high penalty interest rates, see their assets seized, and in rare cases, face jail time. At the very least, if you’re looking for more time to pay your taxes, you can file the form 4868 for a six month extension.
This type of correspondence insures that the IRS knows the taxpayer is experiencing difficulties paying their taxes or filing them by a given deadline.
If you simply don’t file taxes, there’s a possibility that after extra fees have accrued, or the IRS will simply file your taxes for you in the worst way possible; they will file the taxpayer as a single individual with only one exemption, despite what criterion they fall under. This will in turn create a larger amount owed.
If you don’t pay taxes, the IRS will take action against you. It’s usually not immediate, but after enough back taxes go unaccounted for, the government will take action and put a lien on your paycheck or property. Perhaps even a state lien, depending on the situation.
As a whole, the taxpayer will take a large monetary hit and their credit will plummet. They’ll have to spend extra money than they otherwise wouldn’t have had to pay.In the worst case scenario, especially if they’re wealthy and seemingly capable of paying their taxes, the government can decide that they’re purposefully not paying taxes, declare fraud, and throw them in jail.
It’s important to file taxes in their respective deadline and payout the back taxes in order to avoid penalties, levying of assets, and jail time.
Back Tax Help if I Missed the Filing Deadline
It’s essential that you file as soon as possible to avoid incurring higher penalties and being forced to pay even more than you owe due to accrued interest.
Will the Government Levy my Assets?
It is a possibility that the IRS will levy the assets of a taxpayer who has repeatedly failed to make payments. At the bare minimum, when filing again, all rewards or tax breaks will go straight into the pot of money you owe to the IRS. If a taxpayer still fails to pay, then the government can take these following steps:
If the government garnishes your wages, your employer will be legally required to withhold a certain percentage of your pay to cover unpaid taxes. This is the easiest of the punishments the government can enforce when there’s failure to pay taxes.
If a tax lien is enforced, the government has claimed your property as an assurance of rights to your property over other creditors waiting for debt payment. Meaning if you lose your property to the government, it will go towards your taxes, and you’ll still owe money to creditors.
Tax officials will demand that your bank puts a hold on the funds in your account, and seize said funds to cover your unpaid tax liability. This allows for 21 days before the government can legally withdraw the money from your account to cover the taxes owed.
All of your property assets are up for grabs if you have repeatedly avoided repaying your taxes.
Authorities may seize items such as your home, car, boat or any other asset that might be sold to cover your debt.
Again, when this occurs, the funds derived from the sale of your property(s) help to clear your tax debts, but do not contribute to the individual loaners owed for any of the given properties seized.
It is essential that you speak with a tax professional as quickly as possible to formulate a payment plan that will work for your individual needs. The goal being to avoid any of the aforementioned penalties. A tax professional can help work out a plan with the government and taxpayer that work for both parties and keeps the taxpayer legal trouble, more debt, and in the worst cases jail.
Help with Back Taxes When You Can’t Pay What You Owe
The IRS offers various payment plans that can help taxpayers who may not be reasonably able to pay the full amount owed.
Despite what you can or can’t pay, a response indicating your situation should be sent to the IRS immediately.
Pay off as much tax debt as you can and then you can begin to explore IRS’ payment options; an installment agreement, an offer in compromise, or a temporary delay of collection.
This is a monthly payment plan that allows you to pay a rate to the government over an extended period of time, that time usually being anywhere from 4-6 years.
If you owe $50,000 or less, you can usually apply for an online payment agreement.
If not, then you’ll have to make the request by filing form 9465 and then proceed with a Collection Information Statement as well; Form 433-A, Form 433-B, or Form 433-F.
Offer in Compromise
This is a settlement offer that you and your tax professional make to the IRS which amounts to less than the debt owed. How it works is you pay this amount and the IRS will then forgive the remaining balance. This type of payment alternative can be tricky because the taxpayer has to meet a specific criterion that proves they’re eligible.
For instance, if the taxpayer is eligible for an installment agreement then they will not further be eligible for an offer in compromise. This sort of payment plan is overtly for those experiencing ‘extraordinary hardship.
’ However, if the taxpayer, usually assisted by a tax professional, can declare and prove that they’re eligible, then the offer in compromise can be incredibly beneficial.
Temporary Delay of Action
This option is not a payment plan, but more of a diversion of the immediate amount due. In this case, the IRS labels your account ‘not collectible’ and will then wait for your financial situation to improve. By no means does this reduce your tax debt owed and in some cases will accrue interest while the delay is in process.
In any case, there are always options when dealing with tax debt. It’s important that if you’re going to tackle the problem on your own, you do an ample amount of research on your conflict and understand exactly what criterion you fall under. However, for these types of issues it’s strongly recommended that you consult a tax professional and ensure that everything is done correctly.
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How Do You File Back Taxes?
Back tax help involves paying over time. When a balance is low, it is less difficult to pay off in a short amount of time.
However, higher balances may require the assistance of back tax help associates in order to set up agreements with the government to pay over a longer period of time without additional penalties, fees or interest.
Once the back tax help program has been decided upon, a taxpayer can then account for the payments in their budgets.Fortunately, there are several ways of resolving these problems and getting back taxes help. If the balances are the result of returns filed by the IRS, then filing back taxes can solve most of the problem. A return prepared by a professional tax preparer will ensure that the taxpayer benefits from all allowable deductions, credits, and other tax benefits.
If you do insist on doing them yourself, although this is not advised, the proper research must be done beforehand. As for a few tips to remember, read below:
–Your late tax returns have to be filed on paper. It’s completely fine to use whatever program to prepare the returns themselves, but they ultimately have to be mailed into your local IRS service center. Remember that despite the situation, you cannot electronically file your back tax returns.
–Differentiate the envelopes you use for each tax return. The most advised route here is to send them via certified mail.
This ensures that they’re going to the correct destination and more importantly gives confirmation if they’re received or not.
Keeping the different returns in different envelopes basically helps the IRS in their initial round of processing, and reduces the room for error if there are multiple.
–Make sure to hand deliver if your deadline is up. If you’re in a bad time crunch, then hand deliver the returns to your local IRS office.
It’s advised that you make photocopies of the first page of each respective return. Once at the office, ask the IRS to stamp each photocopy in the order it’s received.
The photocopies then become legal receipts which can ensure date of filing, time of filing, and substance of filing.
What if I Have Been Audited?
Although audits are usually rare, there is still a chance that the IRS will investigate a claim. Or, sometimes the computer system will catch a red flag and then do its due diligence on its own.
If a taxpayer is being audited for back taxes, the first thing to assess is exactly what is being audited and why.
Remember, the IRS has access to all financial information (wages, mortgage interest, pre-exposed debt).Once these questions are answered, the taxpayer will be able to understand exactly what sort of documentation they need to provide to prove that their taxes are accurate. In the case that the taxpayer does not have any of these documents available, they will then have to proceed to third parties to obtain proof of their claim.
As with all dealings with the IRS, it is advised to respond in the timeliest and most polite manner possible when settling these issues. This case in particular, as there will be an auditor designated for your immediate case.
A true audit is generally something that is very serious and should not be taken lightly. We recommend a tax professional as they will help you prepare a defense that includes verification of expenses and deductions claimed on a tax return.
Penalties can be removed through penalty abatement, provided that a reasonable cause can be shown.
Due to the amount of preparation that needs to be done when handling an audit, without professional help the taxpayer will often overlook crucial information they need to provide for proof of accuracy.
As you can see, back taxes are not something to be taken lightly and can often prove to be quite complicated when handling.
In order to insure that the taxpayer does not run into further trouble and does not continue to accrue interest on their outstanding tax balance, the right steps need to be handled carefully, quickly, and professionally.
With the many options available to get back taxes help, choosing the correct path to tax resolution can be difficult.Community Tax is a full-service tax professional company that employs experienced tax practitioners who are able to analyze your particular circumstances, identify the source of the tax balances, and develop a plan to most efficiently resolve your back tax problems including filing back taxes. Just as there are many ways to incur back taxes, there are also many ways to fix them – and applying the correct fixes in the correct order can save you thousands of dollars!
Taxpayers must be wary of back tax help scam artists who claim that all debt can be settled for “pennies on the dollar” without asking any background questions concerning the debt. Always ensure that any tax professional that is hired is at least a CPA or an Enrolled Agent.
Do thorough research on tax companies, including checks with the Better Business Bureau. Many companies, such as this company Community Tax , offer free consultations. Find the back tax help that best fits you as soon as possible. Don’t fall any further into back tax debt.
If you need back tax help, call Community Tax today at 1-888-676-4319.