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Back Taxes: What You Can Do

November 18th

If you owe back taxes, a tax debt lawyer should be your first call. The IRS has collection powers greater than almost any other entity, and is likely to employ these powers to collect the back taxes you owe. These powers include but are not limited to wage garnishment, bank account freezes, and more. However, a tax lawyer can help you to find ways to stop or delay these collections.

Tax Debt Lawyer Can Help

A qualified tax debt lawyer knows a few tricks to help keep the IRS from exercising its muscle in the collection of your back taxes. The first piece of advice is to stay in communication. A big mistake many people make is not to respond to correspondence, either out of fear or anxiety of their inability to pay. However, to the IRS collector, silence is interpreted as non-compliance, and they are more likely to take action against someone who gives no response than someone who is in regular correspondence and being up front about their inability to pay back taxes under the current circumstances.

There are other compromises that a tax debt lawyer can help you reach with the IRS to pay your back taxes. In some cases you can negotiate payments on an installment plan, which offers to pay back the debt on a graduated basis. Another popular alternative is an offer in compromise, which reduces the amount of back taxes you owe but can be very difficult to negotiate with the IRS.

A tax debt lawyer can help you work through your financial woes, sorting out your back taxes and proposing the best solution to keeping the IRS from coming after your earnings.


Fresh Start for IRS Debt

November 4th

In 2011, the IRS introduced the Fresh Start Program to help alleviate some of the burden faced by taxpayers in a troubled economy. The Fresh Start Program offers various ways to help taxpayers get some relief from their IRS debt while being able to pay back at least a portion of what they owe to the government. The biggest change is the grace period before penalty for non-payment of IRS debt.

Fresh Start

According to a tax debt lawyer, the Fresh Start grace period gives taxpayers time to avoid the penalties that would have normally been applied following a non-payment as of the due date of April 15. These penalties are applied at a rate of 0.5% per month on the total amount of the unpaid taxes, with a maximum penalty of 25% of the total owed. Under the Fresh Start initiatives, there is a six month grace period before these penalties on your IRS debt begin to kick in. According to the tax debt lawyer, this grace period allows taxpayers more leeway to get their payments in on time without accruing penalties that make it more difficult to pay the total amount due.

The grace period only applies to people who have had a drastic reduction in income over the tax year. Specifically, an individual must have been unemployed for 30 days or more in the calendar year, or had a 25% reduction in income. The Fresh Start Program also allows qualifying taxpayers to pay their IRS debt in installments. It is a versatile and useful new law for those facing IRS debt.


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