IRS Tax Relief

One of the most common mistakes made by people who owe money to the Internal Revenue Service is to contact the agency in search of options for resolving the past debt. While this would seem to be the most obvious and logical way to obtain IRS tax relief, the reality is that those government bureaucrats usually offer only one way to resolve the issue: pay the entire amount in one lump sum. The thing is, if you could afford to do that then you wouldn’t owe the debt in the first place, would you? But, of course, most government employees – at least at the Federal level – are usually anything but informative when it comes to assisting taxpayers. Here are some of the things you need to know about IRS tax relief that the agency will never tell you.

If You Have No Assets

Your best chance at obtaining IRS tax relief and settling your tax debt is if you have no noticeable assets that could be liquidated to meet the obligation. The reason for this is simple: if you apply for an Offer in Compromise to settle your debt with the IRS, and it turns out that you have money in your savings account that could pay most of the obligation, the IRS will refuse your settlement offer. They’ll usually then exercise their options to place a lien on your current assets or garnish your wages from your payroll services provider in an attempt to recover the money that you owe to them. And the fact is that the IRS seldom wastes time when they are owed money and discover that the assets are there to cover the bill!

When a Levy is Threatened

In those cases where the IRS notifies you that they intend to place a tax levy on your bank accounts, the worst thing you can do is to ignore their calls and letters. After three weeks, their levy will effectively freeze your assets until a court can determine which portion will be used to pay off your debts. Don’t let this happen! Contact the agency as soon as you receive your lien notice, and set up a reasonable payment plan that allows you to make an effort to pay the debt. When the debt has gone to the lien stage, it is generally your last opportunity to obtain IRS tax relief before they start seizing your assets, so never make the mistake of delaying in hopes that the problem will go away.

Make Sure to Stay Current in Tax Payments

Another common mistake is for people to attempt to obtain IRS tax relief for past tax debt when they are not up to date on their current tax liability. It’s kind of like asking to borrow money from a friend when you haven’t been paying your old debts to him – why would he even want to listen to your proposal? The rule of thumb is simple: if you aren’t paying your current taxes, don’t expect the IRS to believe that you will honor any agreement to resolve back taxes. Also, if you are currently in bankruptcy proceedings, you can expect that the IRS will reject your settlement offer out of hand.

Get Help

Dealing directly with the Internal Revenue Service can be a challenge even for trained tax professionals. For the average citizen, it is nothing short of a nightmare. Often times, your best chance to obtain IRS tax relief will be found in recruiting the assistance of someone well versed in tax law and the practices of the IRS, and allow them to represent your interests and guide you through the process. A quick search online will give you the names of literally hundreds of qualified tax professionals who can assist you in getting the tax relief you need.