How Do I Find Out If I Owe Back Taxes – Written by Chris Huntley Written by Chris Huntley All Articles → Former Certified Credit Counselor, Licensed Insurance Agent and Former Series 65 Registered Investment Advisor Follow:
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How Do I Find Out If I Owe Back Taxes
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If you owe the IRS between $10,000 and $15,000, you need a solution. Your options include payment plans, an offer in compromise, and several others. Choose the best option for you, but don’t delay. The IRS will work with you, but they don’t forgive or forget.
If you have $10,000-$15,000 in tax debt and don’t know who to turn to, this article is for you.
We will consider all the best options for tax relief to immediately stop IRS collection activities, including filing for debt forgiveness (offer and compromise), setting up a payment plan (payment plan), bankruptcy and do-it-yourself (DIY) considerations, or help from a tax relief company.
You are here because you already know that the IRS can garnish wages or file a tax lien against your property. You owe money to the IRS, and you need to take action.
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By the end of this article, you will be ready to decide which tax relief option is best for you and whether you should go it alone or decide to hire a professional to help you.
Anyone who racks up that much tax debt must have made a lot of money. IRS logic says you can afford to pay the debt.
But they have no idea what is going on in your life, so it is almost impossible to do more than e.g. $13,000 away.
Fortunately, there are tax relief options that can help you avoid the IRS and eliminate your tax burden.
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The truth is, you probably don’t have $11,000 or $12,000 to pay the IRS in one lump sum.
The good news is that the IRS allows you to set up a payment plan known as repayment. You can use IRS Form 9465 to apply for an installment agreement.
Here are some examples of monthly payments, including the qualifications for each and the required forms. If you cannot afford these payments, you should go to the following sections for other options.
* Monthly payment is an estimate only and does not include enrollment fees. The IRS accepts a large percentage of requests for payments, but acceptance is not guaranteed. We strongly recommend that you speak with a tax professional at Optima Tax Relief before entering into an installment agreement or if you cannot afford the above monthly payments.
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Keep in mind that interest and penalties can add up quickly, leaving you with a higher balance. That’s why we’ve also created a guide for you that shows you how to clear your tax debt if you owe the IRS between $16,000 and $25,000.
Just remember that if you enter into a repayment agreement and you have trouble paying on time (if you don’t), the IRS will demand the full amount owed or demand tax liens and tax returns. This may be one reason to try to offer them less than what you owe. (compromise offer)
Quick tip: If you start paying in installments, it will be harder to get debt relief later.
Acceptance of your payment plan is not guaranteed. You must be up-to-date with all tax returns and other tax returns and you must not have applied for an installment agreement in the last 5 years.
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If the tax authority decides that you can pay the full tax, the request will not be approved.
Expect to pay anywhere from $31 to $225 in setup fees depending on whether you set up a direct debit from your bank, pay by check, and whether or not you use their online application.
The absolute cheapest way is to use the Online Payment Agreement (OPA) program at IRS.gov/OPA and open a direct debit, which only costs a one-time fee of $31. Even this fee can
If you honestly cannot pay the full amount, you are a good candidate for paying in installments.
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Whether your tax debt was incurred last tax year, you owe back taxes for years, even if your wages are taxable or the IRS has a tax lien on your assets, a repayment plan may be right for you.
If you owe the IRS between $10,000 and $15,000 and choose a repayment plan, the payments will add significantly to your debt. You must prioritize them above all other debts. Other creditors may push you harder and their demands may be tougher, but none of them can do what the IRS can do.
At worst, remember that many other debts can be discharged in bankruptcy. Tax evasion usually cannot be.
The first thing most people who have more than $10,000 in tax debt want to do is find out if they can get debt relief.
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An offer in compromise is an offer to settle with the tax office for a lower amount than you owe.
It might work, but it’s far from a sure thing. The tax administration only accepts around 40% of requests for compromise offers.
The IRS will only accept an offer in compromise if they believe you cannot pay the full amount and that trying to collect from you would be a waste of time and resources.
This is not up for negotiation. The IRS will look at your income, assets and expenses and decide what they think you can pay.
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The trick is in the qualification. It may not be easy. For 24,000 proposals accepted by VMI in 2018, VMI received 59,000 proposals. In other words, they accepted about 41% of the offers.
The IRS will not accept an offer in compromise if it believes you can pay off the debt in one lump sum or with a payment plan.
To qualify, you must provide the IRS with an amount equal to or greater than what the IRS calls “reasonable collection potential.” (RCP). This is a nice way to tell them that you need to offer them whatever they can squeeze out of you in terms of your assets like houses, cars, investments, savings, etc.
If you have little or no assets and/or very high debt, there is a good chance that your offer will be accepted.
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They apply to a limited number of people, but you should still be aware of them, because one of them may apply to you!
To apply, you must complete IRS Forms 656, Offer in Compromise, and Form 433-A, Wage and Self-Employment Information Collection Statement, or Form 433-B if you are a business owner.
You can fill out the forms yourself, but the forms are long and complicated and must be filled out perfectly.
Tax benefit expert (and former IRS officer) Jeffrey McNeal says he has seen countless errors on forms when processing offers, even when prepared by CPAs and enrolled agents!
Romans 13:6 7 Illustrated:
Making sure all the math is correct and all the fields on Form 433 are filled out correctly is just a starting point.
Only 41% of submitted proposals are approved, so it must be done perfectly to maximize your chances. If there is an appeal, you don’t just have to fill out the form. McNeal says that almost the only people who won their complaints were people who supported their claims with the following words:
The Internal Revenue Code has over 9,000 chapters, the Internal Revenue Manual has 39 chapters (also huge), and we know there are tens of thousands of case law.
It would be almost impossible for a layperson to know what is and what is not suitable for an offer in compromise.
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You might think that the only benefit to using a company for tax benefits would be to help reduce your balance sheet. But after reading hundreds of reviews of tax credit companies, we found that tax credit companies help Americans in several ways:
Most importantly, they stop the stress of dealing with the IRS. It usually takes months (or years) for the IRS to review each case. In response, the IRS typically suspends all collection activity and often pays lifetime wages, such as when an offer in compromise is made.
Choosing the right company to work with is the key to hiring a tax advantaged company. Many of these companies are shady and some are outright scams. Always do your research, read reviews and choose a trusted partner. Never make a decision based on an ad or someone
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