Dealing with tax debt is a stressful experience. If you get behind on tax payments, the IRS has many avenues they can take to make sure they receive the taxes they’re owed. A person with tax debt could have their assets seized, bank accounts levied, or, in extreme cases, even face jail time. But if you have tax debt, no matter how minor or severe the debt, you don’t have to let the stress of it loom over you. Every tax problem has a solution. So, what should you do when you face tax debt issues?
If you have tax debt issues, one thing you can do is consult a tax relief company and get professional advice on the best way to settle your tax debt as quickly as possible, as well as for the smallest possible dollar amount. Another thing you should do, whether or not you are going to seek professional counsel, is educate yourself. Learning about the different tax problems and how they can be solved is important if you have tax debt issues. Educating yourself can help you choose the best solution for your issue and help to ease your mind. Let’s take a look at some of the common tax problems you might be facing if you have tax debt, along with the possible solutions for each issue.
What Are The Different Tax Problems And Their Solutions?
Tax Levy
What is a tax levy? A tax levy is a measure used by the IRS in which they can seize financial assets. When the IRS implements a tax levy, they can seize wages, seize money in your bank account, and sell any financial assets you might have (like a vehicle or a house, for example).
How do you resolve a tax levy? A tax levy is a less common, final step taken by the IRS. If you have a tax levy in place, or think you might be about to have one put in place, you should immediately call the IRS. The IRS will negotiate with you to help you stop a levy. If you can, you should pay your debt in full immediately to stop the levy. If you do not have the financial means to do this right away, you can also enter into an installment agreement with the IRS (think of it like a payment plan for your tax debt) or file an Offer In Compromise to attempt to pay less than you owe.
Tax Lien
What is a tax lien? A tax lien is a claim of your assets by the IRS. This means that, instead of taking an asset, they file a formal legal claim stating that they own it. A tax lien is marked on your credit report and can be a major blow to your financial history.
How do you resolve a tax lien? Like with a tax levy, you can remove your tax lien by paying your debt in full or setting up an installment agreement. You can also discharge a property with a tax lien if are going to sell it to satisfy your debt, or file for a withdrawal if you think the lien should have never legally been put in place.
Wage Garnishment
What is wage garnishment? In the case of a wage garnishment, the IRS seizes a certain portion of the taxpayer’s wages to repay the debt owed. A wage garnishment is an ongoing action taken by the IRS that will continue until the garnished wages equal the amount owed. A wage garnishment is actually a type of levy used by the IRS. If this levy has been put in place, it is easy for the IRS to put other kinds of levies in place (like seizure of assets) as a next action to fulfill the debt.
How do you resolve wage garnishment? If you have a wage garnishment in place, it’s important get it removed immediately and avoid further levies. You can do this by contacting the IRS and either paying your debt in full, entering into an installment agreement, or filing for an Offer In Compromise.
Payroll Tax Debt
What is payroll tax debt? Payroll tax debt is a tax issue that affects business owners. Payroll tax debt occurs when a business fails to pay their employees’ wage taxes to the IRS. This can happen because of a late payment or a total payment failure. Payroll tax debt is taken very seriously by the IRS. The IRS quickly begins seizing a business’ assets when they notice a payroll tax debt and can even seize a business owner’s personal assets if the business’ assets are not enough.
How do you resolve payroll tax debt? This is a serious form of tax debt that can quickly lead to jail time if the IRS believes this failure to pay was deliberate rather than accidental. If you have a payroll tax debt, it’s best to call a tax expert immediately and have them negotiate with the IRS to settle the debt as quickly as possible.
Unfiled Tax Returns
What are unfiled tax returns? Unfiled tax returns are exactly what they sound like: tax returns that were simply never filed. This can cause tax debt not only because of the unpaid taxes for each unfiled year, but also because of penalties and interest that can quickly accrue on this unpaid amount.
How do you resolve unfiled tax returns? To resolve unfiled tax returns, the tax returns need to be filed and the correlated taxes need to be paid. It’s best to do this as quickly as possible to reduce further fees and penalties.
Get Help
Tax debt is a serious issue but you don’t have to let the stress of it rule your life. If you need help with your tax debt, a certified tax professional can help you get relief as quickly as possible. The tax experts at Vanguard Tax Relief have more than 40 years of experience negotiating tax debt with the IRS. A tax expert like the ones at Vanguard can get you the best possible deal with the IRS to help you resolve your tax debt quickly and for a better rate than you could get negotiating on your own. Don’t wait— contact a tax expert today to get relief from your tax debt.
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