Income Tax Debt – What Happens If I Do Not Pay My Taxes
Tax debt can be quite overwhelming and worrying if you do not have a plan of action. There are various ways in which to settle your tax debt. You could choose to use an installment agreement or a tax debit resolution. With an installment agreement, you would pay the IRS one lump sum monthly for a specified period. If you can afford this option then by all means do it. This way you will not only settle your tax debt but also ensure that you do not fall into the same situation again in the future.
You could also use a tax debt compromise. These tax settlement plans offer a very unique solution to those who cannot seem to make their monthly obligations. The IRS can offer tax relief through these tax debt compromise programs and you can be sure that the plan has been looked at and approved by a specialist. It is very unlikely that an individual could do this on their own so using a professional to look at the deal can save valuable time.
It is common for people to be worried about how to pay their taxes when they get a penalty notice from the IRS. There are many different types of penalty related notices and it can be confusing. You will need to be aware of the different penalties and what the implications of them are. After you receive the notice it is important that you understand what the consequences are and take action as soon as possible to avoid paying additional money.
One of the most common notifications that you will receive is an abatement request. An abatement request is a request that you send to the IRS to have your tax debt relief requested. Some of these requests will be approved and others will be denied. If your request is denied you should not give up because you have not asked to be removed from the rolls. There are many reasons why you could be injured in this way and if you do not ask for a refund you will be left owing the government money. The two most common reasons are you were not paid because of a statute of limitations and you were not notified that you were required to repay an earlier tax debt.
A complete list of the tax debt relief requests that are filed annually can be found on the IRS website. One of the first things that you may notice is that the majority of the injuries are due to a statute of limitations. Statute of Limitations (SOL) violations can result in steep fines or even jail time. Each year millions of taxpayers lose their benefits or pay higher taxes because of these violations.
Many taxpayers attempt to work out their own ways to pay back their tax debt without the help of an attorney. In order to do so a taxpayer will usually file an application with the Internal Revenue Service (IRS) stating that they cannot pay back the amount of money owed. At this point in the process the Internal Revenue Service will conduct an investigation and determine whether a penalty has been properly filed against the taxpayer.
If the agency finds that penalty has been properly filed then the agency will notify the taxpayer that they have an option to settle their balance by paying in full the entire amount of tax debt. This option can either be done by taking out a loan through the Internal Revenue Service (IRS) or by allowing the taxpayer to pay in monthly increments until they have reached a certain amount of surplus money. If the taxpayer chooses to go with the second option a form 656 will be provided to them indicating what is called a compromise. The form 656 outlines what will happen if the full amount of the payment is not received.
A compromise is different from a settlement in that the tax debt that is currently owed is not reduced. Neither is it reduced in any way by the amount that is agreed upon. A compromise involves the IRS agreeing to collect a portion of what is owed as long as certain conditions are met. Failure to meet the conditions and the amount that is owed will result in the total amount of the tax debt being sent to the collection agency.