If this is your first year with a tax balance, the thought of owing the IRS can be frightening. There’s no doubt you’ve heard everything from true stories to urban myths surrounding the power and the reach of the IRS. Very few entities such as the IRS have the ability to leverage assets and capital in order to recover a debt.
In most cases, however, you can prevent aggressive IRS collection tactics by understanding your role in clearing up a tax debt. By understanding these basics, you’ll be in a better position to formulate a plan for paying your tax debt.
Don’t Ignore IRS Notices
If you owe money for taxes, you’ll receive notices from the IRS via snail mail. Don’t ignore them or toss them in the recycling bin in hopes the IRS will forget. They won’t. Respond to each and every notice, and follow the instructions for payment.
If you can’t make the payment in full, call the IRS at number listed on the notice, and explain your situation. Despite nasty rumors to the contrary, the IRS is eager to work with taxpayers in resolving tax debt. The agent assigned to your case will explain your rights to you, and will make sure you understand them. Be sure to request a list of these rights in writing.
Understand Your Payment Options
If you can’t pay your tax debt in full, the IRS has several options available to you. Some of these options include:
- Installment Payment Plan
- Offer In Compromise
- Hardship Forgiveness
- Payment by credit card
While each of these options have their own qualification criteria, you’ll be able to avoid more aggressive IRS collection activity while paying off your tax debt.
Understand Due Process
Due process is a Constitutional right that guarantees everyone the right to go through an entire legal proceeding with no steps neglected or omitted. The same rule applies to IRS proceedings. If you’re not clear on the due process for your tax case, have the agent explain it to you or seek advice from a qualified tax pro.
Don’t Go It Alone
If the thought of dealing with the IRS leaves you cold, your best course of action is to enlist a qualified tax pro. Tax attorneys and Enrolled Agents have the ability to represent you in dealing with the IRS, and to negotiate with them on your behalf. They will explain your rights, review your case and help you determine which payment options you qualify for.
Your tax pro will also help you understand the complex jargon you might find in some IRS notices. A tax pro’s job is to understand and interpret tax law and tax codes so you won’t have to. That alone may well be worth the cost.
If you’re dealing with a tax balance for the first time, it’s easy to get unnerved at the prospect of dealing with the IRS. By understanding your rights, payment options and representation options, you’ll be able to tackle your tax debt with a solid understanding of the process. By enlisting a tax pro, you’ll have someone who can represent you and negotiate on your behalf.
We have qualified tax pros on staff who can help. Get started today by clicking the white “Start Chat” button at the top of the page, or give us a call. Don’t go it alone. We can help.
