No one in Las Vegas plans or hopes to owe money to the Internal Revenue Service. However, sometimes your circumstances may make it impossible for you to pay what you owe. In such cases, you may find yourself owing a significant debt to the IRS. Unfortunately, the IRS has significant debt collection power, and they will work hard to make sure you pay. They will also add penalties and interest to your debt that make it even more difficult to pay off. To save yourself as much money as possible and get out of the shadow of outstanding tax debt, you need to find an effective Las Vegas tax resolution.
Understanding Tax Debt
Each year, you must pay tax to the IRS if you earn more than a certain amount of income. This tax is due on April 15th. If you don’t pay your taxes on time, the IRS begins to impose penalties and interest. As time passes, the amount you owe the IRS continues to increase. Over time, the balance can become extremely high and difficult to repay. For this reason, it’s important to get help from you Las Vegas tax resolution experts, Tax Samaritan, as quickly as possible.
As soon as the IRS discovers that you owe an unpaid tax debt and have not filed a tax return, they will begin by filing a substitute for tax return form (also known as an “SFR”) for you to determine how much tax you owe. When estimating your liability, the IRS won’t include any credits or deductions you may have qualified to claim. Next, they will send a written notice that tells you how much money you need to pay. After sending this notice, the IRS will begin taking aggressive actions to collect. They have the power to garnish your wages, seize your bank accounts and place liens against your property. These liens will damage your credit score significantly.
Las Vegas Tax Resolution Basics
When the IRS begins contacting you for debt collection purposes, they are unlikely to offer you any debt resolution options. However, tax resolution is available if you take the right actions. Some of the Las Vegas Tax Resolution programs available include the following.
In some cases, the IRS may be trying to collect taxes that you don’t actually owe. If the IRS’ claim against you isn’t accurate, you may be able to resolve the issue through an IRS tax appeal. This appeal may reduce or eliminate your debt, depending on the circumstances.
If you don’t have the money to pay your tax debt at this time, you may be able to resolve this issue by asking for your account to be placed on “currently non-collectible” status. Qualifying for this status will place all collection activity on hold temporarily. However, the IRS will re-evaluate the issue in the future and may resume collection activities if they determine that you are able to pay.
If you can show the IRS that you have a valid reason for failing to pay your taxes, you may qualify for penalty abatement. This type of tax resolution reduces or eliminates penalties assessed on your outstanding tax debt. Penalty abatement is granted on a case-by-case basis.
If you filed a joint tax return with your spouse, you may qualify for innocent spouse relief. When you file a joint return, both you and your spouse can be held responsible for any unpaid taxes, even if your spouse earned all the income or filed an inaccurate return. To qualify for this type of Las Vegas tax resolution, you must show that your spouse is the one who should be solely liable for the unpaid tax.
Injured Spouse Relief
If you filed a joint return with your spouse and some or all of your refund is applied to a debt owed by your spouse, you may qualify for injured spouse relief.
In some cases, the IRS may agree to an installment agreement. With an installment agreement, you will pay off the taxes you owe over a period of months, and the IRS will stop trying to collect from you.
If you owe a large amount to the IRS and you can’t afford to pay it, you may qualify for an offer in compromise. This tax debt resolution allows you to eliminate the entire tax debt you owe by paying only a portion of it. In most cases, the IRS will agree to this resolution only if they determine that they couldn’t reasonably collect any more than the amount you have offered to pay.
If you can’t reach another type of resolution with the IRS, you may be able to reduce or eliminate some of your tax debt through Chapter 7 bankruptcy. In order to discharge your debts in bankruptcy, you must meet several requirements. You must not be guilty of tax evasion, and you must not have filed a fraudulent tax return. You can only discharge tax debts related to returns that were due at least three years prior.
Statute of Limitations Review
When the IRS assesses tax against you, they have 10 years to collect the debt. Once this period has passed, the IRS must release any lien against your property and stop trying to collect from you. However, it’s important to note that this period doesn’t officially begin until you file a return. The substitute for return the IRS prepares on your behalf isn’t considered an actual tax return. For this reason, it’s important to file a tax return every year whether or not you can afford to pay what you owe.
Choosing a Las Vegas Tax Resolution Firm
Every Las Vegas tax resolution firm offers different advantages for taxpayers. To determine which tax resolution professional is best for your needs, schedule a consultation with an experienced Tax Samaritan tax resolution professional who will be able to review your situation and explain the pros and cons of each option available to you.
At Tax Samaritan, We Rescue Troubled Taxpayers
Click the button below to request a Free Tax Debt Analysis today to get started with your Las Vegas Tax Resolution 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.