How do I respond to notices I can’t pay?

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IRS back taxes owed,

Every year millions of people receive letters and notices regarding IRS back taxes owed, penalties, liens, unpaid taxes, and so many reasons. Many people aren’t aware of how to resolve these issues and ignore them. We researched advice from tax consulting firms, and tax advisory services can help resolve your issues. 

First and foremost; Don’t ignore the notice:

If you receive a notice from the IRS stating you may have unfiled taxes or penalties, do not ignore it. Sometimes, the notice is related to a change in their account or information regarding a new policy. You can respond to these notices and prevent additional adverse consequences in several ways. 

Take your time reading the letter:

The majority of IRS letters and notifications concern federal tax returns or tax accounts. Each notice addresses a specific problem and gives detailed information on how to proceed. Notification may include changes to a taxpayer’s account, taxes owing, a payment request, or a problem on a tax return. Taking action on time may reduce further interest and penalty costs.

Examine the information:

A taxpayer who receives a notice of an amended or corrected tax return must review the information enclosed and determine whether or not it warrants a revision to the original return. In that case, the taxpayer should note the modifications on their copy of the tax return and keep both versions in their files. Unless the taxpayer disagrees with the facts, the IRS requests more information, or the taxpayer has an outstanding balance, the taxpayer usually has no reason to take action or get in touch with the IRS.

Start working on the solution

The solution of every problem is working toward it. If you are not able to pay your taxes, then you can opt for tax relief services. 

  1. Installment Payments: 

Similar to mortgage loans, payments are spread out over time with an installment plan. The only difference is that your monthly payment is to IRS rather than a bank. However, getting approved for an extended payment plan on your taxes is not always possible. In its role as tax collector, the IRS would much rather have your payment than none at all. But it has no intention of working out a payment plan with a taxpayer who hasn’t been paying their taxes on time.

  2. Release Wage Garnishments: 

If you owe money to the IRS and haven’t worked out a payment plan, the agency may seize a portion of your paycheck. If you owe taxes, the government can withhold federal benefits (like Social Security and tax refunds) until you pay them or the deadline for doing so passes. If you’ve been hit with a garnishment and are having trouble making ends meet, you should speak with the IRS about requesting a modification. The Internal Revenue Service (IRS) garnishment amount could be decreased if they agree.

  3. Programs for Innocent Spouses: 

If you file a joint tax return with your ex-spouse, you both may be held liable for any tax shortfall, regardless of whether or not you are legally married. Even so, married or formerly married couples are eligible for certain tax relief from the Internal Revenue Service (IRS) if one partner conceals tax liability from the other. 

If one partner can prove that the other underreported income, overreported expenses, or claimed deductions or credits without permission. Given the above, the misled partner may file for tax relief.

  4. Offer in Compromise: 

By working out a “offer in compromise” (OIC) with the IRS, a taxpayer can negotiate a reduction in the amount of tax that is ultimately owed. A taxpayer will not qualify for an OIC if they have the ability to pay their tax debt in full through an installment agreement or another payment plan. 

Any submitted Offer in Compromise (OIC) application will be returned by the IRS if all necessary tax returns and payments have not been filed and paid by the due date. In addition, the OIC will return any money you paid to apply. Payments made in conjunction with a completed and mailed application will be applied to the total due. In the event that the extension is legitimate, this policy will have no bearing on your current tax return.

  5. Hire for professional Help:

If your records are missing, you can use various alternative sources to construct earlier returns. Penalties and interest on unpaid taxes are assessed if a return is filed late. If you want to avoid paying more in interest, you should pay off your tax bill as soon as possible. If you haven’t already, please file your tax returns for the past three years as soon as possible. Only by filing your tax return can you receive any refunds you may be due for those years.

Conclusion

In the end, you should keep all the records of your tax process and noticed received from IRS. All correspondence from the Internal Revenue Service (IRS) should be kept for at least seven years. Notifications of changes to a taxpayer’s account fall under this category. The IRS recommends that taxpayers maintain their tax records for three years after the due date of their tax return.

Also, always be on the lookout for fraud. The IRS will never communicate or contact a taxpayer by any kind of electronic communication. Typically, the IRS makes their first contact by letter. If you have questions about your tax account or whether or not you owe money to the IRS, visit IRS.gov.

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