Do you owe money to the IRS?
If you do, you’re not alone. The Internal Revenue Service (IRS) found that more than 14 million Americans owed over $131 billion in back taxes, penalties, and interest in 2018.[1] With the help of The Law Office of Jason Carr, PLLC in Alaska, you can leave that group and resolve your IRS tax debt now to get your finances and your life back on track.
Here are three reasons why you should do this now and not delay.
Eliminate stress and anxiety.
You’re not going to out wait the Internal Revenue Service. They’ve been at this since Lincoln established the agency in 1862.[2] They keep track of who owes what, and they want their due. This only means that the longer you delay, the greater the pressure and stress on your shoulders. Plus, if you fail to file by the deadline, you could be hit with a monthly penalty of 5% of unpaid taxes—up to a maximum of 25% of your balance—making your tax headache (and shoulder ache) all the worse. As such, owing back income taxes is one of the most stressful situations you can have. And it’s the first reason you should resolve your IRS debt now. The IRS can garnish wages, levy bank accounts, and seize assets in Alaska. Who needs this? Work with the experienced tax attorneys at The Law Office of Jason Carr, PLLC and address your tax issue straightaway. You’ll be so much happier with this off your plate and a fresh start.[3]
You can set up an installment plan.
While the IRS can be a pretty harsh agency, it does have some options for those that are trying to settle their debts in Alaska. Another reason to address your tax liability right away is the fact that the IRS will let you complete an installment agreement when you complete your tax returns with the use of Form 9465.[4] The IRS says that “in most circumstances,” it will approve your agreement request if you owe less than $10,000, and you’ve successfully filed your income tax returns in the last five years.[5]
Form 9465 is used to request a monthly installment agreement or payment plan if you’re unable to pay the full amount you owe shown on your tax return or on an IRS notice you receive. The IRS explains that most installment agreements meet its streamlined installment agreement criteria, for which the maximum term is 72 months.[6] In some situations, you can have more time to pay or you can establish an agreement for an amount that’s less than the amount of tax you owe (which is discussed below).[7] But before requesting a payment plan, the IRS says you should look at other alternatives, like getting a bank loan or using available credit, which may be less costly.[8]
If you owe $50,000 or less, you may be able to avoid filing Form 9465 and set up an installment agreement on the IRS website.[9]
You can pay less than what is owed.
One significant reason to address your IRS tax debt now is the fact that you may be able to settle with the government for less than you owe. This is done through what is called an offer in compromise.[10] This may be a good option if you can’t pay your full tax liability, or if doing so would mean a financial hardship in Alaska.
The IRS looks at your unique set of facts and circumstances, including your ability to pay, income, expenses, and asset equity.[11]
The IRS generally approves an offer in
compromise when the amount offered is what they think is the most it can expect to collect within a reasonable period of time. So, you need to show the IRS that this is the best they’re going to get. You and your attorney should explore all other payment options before submitting an offer in compromise because this program isn’t for everyone.[12]
Takeaway
We see all kinds of advertisements for debt relief, and unfortunately many of these are scams. Work with an experienced tax attorney at The Law Office of Jason Carr, PLLC in Alaska and resolve your tax issue now.
For more information on this and other tax matters, consult the IRS or a qualified tax professional.
Reference:
[1] IRS website, SOI Tax Stats – Delinquent Collection Activities – IRS Data Book Table 16 (Last reviewed March 19, 2020). Retrieved at https://www.irs.gov/statistics/soi-tax-stats-delinquent-collection-activities-irs-data-book-table-16.
[2] IRS website, Historical Highlights of the IRS (Last reviewed February 28, 2020). Retrieved at https://www.irs.gov/newsroom/historical-highlights-of-the-irs.
[3] See Sean Pyles, Tax Debt: 3 Steps to Resolve Your Debt With the IRS, NerdWallet (July 19, 2019). Retrieved at https://www.nerdwallet.com/blog/finance/tax-debt/.
[4] IRS website, About Form 9465, Installment Agreement Request (Update April 1, 2020). Retrieved at https://www.irs.gov/forms-pubs/about-form-9465.
[5] Id. To be eligible for the installment plan, you must be current in filing tax returns; your state income taxes and late fees must be mostly paid; and you’re able to make the monthly minimum payments that the IRS requires. How to Settle Your IRS Tax Debt. Debt.org (Last updated April 16, 2019). Retrieved at https://www.debt.org/tax/debt/how-to-settle/.
[6] IRS website, Instructions for Form 9465 (Last reviewed January 9, 2020). Retrieved at https://www.irs.gov/instructions/i9465.
[7] Id.
[8] Id.
[9] Id. See Dori Zinn, Tax Debt Relief: How to Resolve Your Debt with the IRS, BankRate (February 6, 2020). Retrieved at https://www.bankrate.com/debt/debt-relief/tax-debt-relief/.
[10] IRS website, Offer in Compromise (Updated February 28, 2020). Retrieved at https://www.irs.gov/payments/offer-in-compromise.
[11] Id.
[12] Id.
