If you owe money to the IRS, you are probably facing aggressive collection actions. Until the IRS receives the unpaid amount in full, they will continue to try to collect from you in any way they can. In order to stop the collections process, you need to seek Las Vegas tax relief as soon as possible.
About the IRS Collections Process
Most people pay tax on the income they earn during the year either thru income tax withholding from an employer on regular paychecks or from quarterly estimated tax payments. If you owe income taxes, the full amount will be due on April 15th. If you don’t pay this debt on time, the IRS will begin trying to collect from you almost immediately.
If you filed a tax return but you don’t pay what you owe, the IRS will send you an IRS tax notice that details the amount you need to pay. If you didn’t file a tax return, the IRS will create a substitute tax return to calculate the amount you owe.
This substitute tax return won’t include any deductions or credits you may have been able to claim, so it will likely overestimate the amount you owe. After this amount has been calculated, the IRS will send you a detailed bill. Whether or not you filed a return, your bill is likely to include penalties and/or interest. It will also include a demand for payment. If you don’t pay the debt, the IRS will usually establish a federal tax lien to begin collecting from you.
With a federal tax lien, the IRS has the ability to levy or seize your assets, including any that you already own and any that you acquire after the tax lien is in place. The IRS will be able to garnish your wages, take money from your bank account and intercept any state or federal tax refunds you receive in the future. They are not only the country’s largest collection agency but also the most powerful. Your credit score will also fall because of the tax lien.
Las Vegas Tax Relief Options
When the IRS begins trying to collect from you, their goal will be to collect your debt in full. As long as your tax debt is outstanding, it will also continue to accumulate penalties and interest. The IRS is unlikely to advertise the availability of any debt resolution options. However, these options are available if you know how to apply for them.
Some of the Las Vegas tax relief options you may benefit from include:
- Delaying the collection process. If you can show the IRS that you can’t afford to pay your tax debt right now because of a severe financial hardship, the IRS may agree to delay collection activities on your account temporarily. This is also known as “Currently Not Collectible” status. However, the debt will not be erased even if you qualify for this type of tax relief. At some point in the future, the IRS will re-evaluate your situation and determine whether you are able to pay. If the IRS determines that you have the ability to pay, your account will become collectible again.
- Installment agreement. In some cases, a tax debt may be too large for you to pay at one time. However, if you would be able to make smaller payments on a monthly basis, you can apply for an installment agreement. This agreement will allow you to make payments in a predetermined amount each month until your debt is paid in full. The IRS will stop trying to collect from you after this agreement is in place.
- Offer in compromise. In some cases, the IRS may allow you to settle your debt for less than the total amount you owe. This type of Las Vegas tax relief is known as “offer in compromise.” In order to qualify for this type of relief, you will need to fill out the appropriate forms and submit them to the IRS. The IRS is not required to accept your offer, but they will be more likely to do so if the amount you offer is what they could reasonably collect from you on their own.
- Penalty abatement. The penalties that accumulate on your tax debt can make it much harder for you to pay off your tax debt. If you can show that you had a legitimate, reasonable cause for not paying your debt on time, the IRS may reduce some of these penalties to make the debt easier to pay. This tax relief option is known as “penalty abatement.”
- Injured or innocent spouse relief. If you have tax debt related to the income or activity of a spouse, you may qualify for injured or innocent spouse relief. Innocent spouse relief can eliminate some or all of the tax debt associated with your spouse’s income or activities, while injured spouse relief is available if you have had your refund seized to repay a spouse’s tax debt.
- Other types of Las Vegas tax relief. Although the tax relief options above are more common, other options are also available. For example, if you believe that the debt assessed against you isn’t accurate, you may be able to lower or eliminate the debt with an IRS tax appeal. If your tax debt is old enough and you aren’t guilty of tax fraud or tax evasion, you may also be able to discharge your debt through bankruptcy.
After 10 years have passed since you filed your income tax return, the IRS will no longer be able to collect the debt from you because the statute of limitations will have expired. However, waiting for this period to pass isn’t usually recommended, as the IRS will pursue aggressive collection tactics that will affect your life dramatically while you are waiting for the collection period to expire. Instead, it’s usually better to seek another type of Las Vegas tax relief.
Getting Professional Help with Tax Relief
If you are dealing with unpaid tax debt, seeking professional help is recommended. A Las Vegas tax relief professional will be able to help you decide which tax relief option will be best for your situation. A professional will also be able to help you complete the necessary paperwork and submit it to the IRS.
At Tax Samaritan, We Rescue Troubled Taxpayers
Click the button below to request a Free Tax Debt Analysis today to get started with the resolution of your tax problems and learn about your options.
Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.
When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).
Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.