Tip #1: Deal With Your IRS Tax Problems Today!
The ostrich approach to dealing with IRS back tax problems simply does not work. If the IRS is calling you or writing you letters, your IRS tax problems will only worsen if you do not deal with them immediately. The IRS designed their collection actions to become increasingly severe over time. Phone calls and letters eventually lead to wage garnishments, bank levies and tax liens. Even if you cannot pay your tax liability you still need to address it today without delay. Penalties and interest continue to accrue on a daily basis on the tax liability and delaying action only compounds the problem.
The IRS will not agree to a settlement until the taxpayer files all unfiled tax returns. Taxpayers often neglect to file the back tax return because they don’t have the money to pay the back taxes owed. A taxpayer should always file a tax return even if they cannot pay the tax liability. The penalties for failure to file tax returns are among the highest the IRS imposes: 25% in many cases. Finally, filing your back tax returns can lead to significant savings on your overall tax liability.
Tip #3: Pay Back Taxes First!
The IRS is the most powerful collection agency on earth. The law protects taxpayers to a greater degree from creditors than it does from the IRS. If the taxpayer is faced with owing several creditors at the same time, they should always choose to pay their IRS tax liability first. The IRS uses collection tools such as a wage garnishment or a bank levy and others. These actions can be financially crippling. A good IRS tax consultant has experience in debt management analysis. Good debt management can lead to significant savings on a the tax liability and on other debt as well
Tip #4: Pay An IRS Tax Liability With A Credit Line!
There are many good reasons for using a credit line to pay back tax debt owed:
- For example, credit line interest may be lower than IRS interest & penalties.
- Also, the cash flow from a credit line can fund some kinds of tax debt settlement.
- Finally, a credit lender is easier to deal with than the IRS.
Essentially the taxpayer is converting a tax liability into personal credit. An IRS tax consultant, experienced in this type of analysis, can assess the chances of success.
Tip #5: Hire An IRS Tax Consultant!
A taxpayer should not try to handle their own IRS tax problem case. An experienced IRS tax consultant, like a U.S. Treasury Appointed Enrolled Agent or a Tax Attorney, is the best choice to deal with the complexities surrounding a taxpayer’s IRS tax problems. They can predetermine a taxpayer’s chances of success in an IRS tax relief program such as Offer in Compromise or penalty or interest abatement.