Why People Need Tax Debt Relief And How We Can Help
Tax Debt Relief
Owe Money To The IRS Or State And Need Tax Debt Relief?
Are you currently in a situation where state authorities or the IRS are demanding money from you? Regardless of whether you feel that the money is actually owed or not, there are a number of different solutions. Nine out of ten, having a professional tax resolution company solve tax issues gets a better solution than an individual or even an individual tax professional would get on their own.
Owing money to the IRS or state is different from owing money to a bank for a credit card or other loan. The IRS and state have expanded collection abilities that unsecured creditors do not. They can levy assets such as bank accounts, or garnish income from social security, retirement, or wages without having to go through the traditional legal process. They may file a tax lien and even potentially seize property such as real estate, cars, boats or other physical assets that you own to pay off your tax debt.
This is a scary situation to be in.
Perhaps you recently lost your job, got divorced, had unexpected expenses or had to pay for any other expense that prevented you from being able to pay off your tax debt.
You may be receiving letters from the state or federal tax authorities requesting money that you may feel is not accurate. There are many reasons why people have tax debts and the most important thing is that you receive professional assistance. Read on to see some of the most common reasons why people have IRS and/or state tax debt issues and the solutions to these tax debt problems.
Common Reasons Why People Have Tax Debt Issues:
1) Failure to file tax return(s)
This is a common reason why an individual or company owes money to the State or the IRS. It is not against the law to have tax debt, but it is against the law not to file a tax return when you or your business surpasses certain minimum income requirements.
If you do not file your returns, the IRS will file a Substitute for Return (or SFR). Typically, the SFR will only list income and not have all of the allowable deductions. The result is that you or your company could end up owing a large amount of taxes plus penalties and interest (that may not be accurate had the tax return been properly prepared).
In many instances, taxpayers file their federal tax return, but fail to file the state tax return. If a state tax return hasn’t been filed, the state will file one on behalf of the taxpayer; this is called an estimated state tax return (EST). In this case, the state does not take into account all the deductions that you are allowed. Therefore, the state tax return would place you or your business in a higher income tax bracket, essentially taxing at the highest tax rate allowed for the gross income and taxing an amount that is higher than it should be had the returns been properly prepared.
2) Incorrect tax return preparation
There are a number of reasons that lead to mistakes being made when tax returns are being filed. Perhaps you rushed the filling process just to meet the deadline or did not gather all the applicable information on time to complete the return. Additionally, the mistakes on tax returns could be from a Certified Public Accountant (CPA) or tax preparer who was not familiar with all the intricacies of the 70,000+ pages of tax code, and as a result made mistakes. This is one of the most common situations that happens today. Whatever the reason, these mistakes can be costly as accuracy penalties can reach up to 75% of the tax debt.
3) Failure to make timely estimated tax payments
Often times, business owners do not pay their quarterly Estimated Tax Payments (ETP’s) during the year. The tax debt accumulates to the following year, and the business and/or business owner may not have the money to pay the balance owed.
4) Early withdrawal from retirement funds
The IRS imposes a 10% penalty for 401(k) IRA withdrawals before the age of 59 1/2 for unqualified withdrawals. Many taxpayers are not expecting this and get caught owing the penalty.
Some taxpayers choose fewer withholdings than they should. Then, when they file their returns at the end of the year, taxes are due.
6) IRS or state tax audit
The IRS or state may examine your or your company’s tax returns. Based on the outcome of the audit, you may be subject to additional taxes owed due to penalties, disallowed deductions or other reasons.
7) Gambling winnings
If you have gambling winnings, this income must be included in your tax return. This could mean an increase in taxes due.
8) Claiming a dependent that isn’t rightfully theirs to claim
There are a number of rules regarding claiming tax for dependents which could be confusing. If one does not know the rules, one could inadvertently complete the tax returns in error and later be penalized if the IRS finds that the claim was inaccurate.
9) Unpaid payroll (forms 940 and 941) taxes
The withholdings are made from the salaries of employees, these funds are held in trust by the business and are supposed to be forwarded to the IRS. Failure to do so is seen by the IRS as theft from the employees AND from the IRS, which is very serious. Failure to pay this can also result in personal assessment of the debt, penalties, and fines.
10) Mistakes from another CPA or tax company
To have an in-depth understanding of the 70,000+ page tax code, how it applies to your unique situation, and the best way to apply it in order to ensure you pay the least amount of tax legally required, is very complicated. In addition, it is critical to have an insider’s understanding of the IRS and/or State taxing authorities in order to get the best results. We have numerous clients who come to us after having “tried” to do it themselves or having hired another tax firm that either made mistakes or in some cases billed the client and did nothing.
These mistakes by clients or other tax resolution firms, akin to having a botched surgery, are in many cases very difficult to solve. It is much better to start with the most experienced tax team in the industry. Only trust your life or taxes to the very best.
11) Other Tax Issues
There are a variety of other reasons why you or your company may owe tax debts. The CuraDebt Tax professionals specialize in solving all types of state and IRS tax issues. Contact us to get a free tax resolution evaluation.
Why Choose CuraDebt Tax?
People have chosen CuraDebt Tax to get a solution in place for their tax debts for a number of reasons.
People trust CuraDebt Tax because of the following 21 qualifications:
- Tax professionals are in full legal compliance with the IRS and state when it comes to handling your case and ensuring that you receive the best possible legal resolution for your tax debts.
- Member of the Online Business Bureau in ‘Good Standing.’
- Offers a 100% Free, No-Obligation Tax Debt Consultation.
- Helping People Nationwide Since The Year 2000
- Member Of NetCheck With No Complaints.
- Rated Number One By Top Consumer Reviews as Best Tax Debt Relief Company.
- Numerous Top Ratings For Tax Relief Services From Other Independent Review Sites.
- Over 990 Five Star Reviews On CustomerLobby.com.
- Member Of HonestE Online With No Complaints.
- US Chamber Of Commerce Member.
- Flat Fee Pricing (No Hidden Fees).
- Help With All Sizes Of Tax Debts.
- Written Refund Policy.
- Enrolled Agents (Empowered by the U.S. Department of the Treasury who is a federally authorized tax practitioner.)
- Enrolled Agent Team With Over 60 Years Experience working to resolve the tax liability of many taxpayers with the Internal Revenue Service or State tax authorities.
- Federal Tax Experts.
- Availability In 50 States.
- State Tax Experts.
- NATRC (National Association of Tax Resolution Companies) Member (Tax Division).
- NNATP (National Association of Tax Professionals) Member (Tax Division).
- ASTPS (American Society Of Tax Problem Solvers) Member (Tax Division).
Possible Solutions To Your Tax Debt
The IRS is one of the most powerful collection agencies in the world and has numerous powerful tactics that they use to collect tax debt. Taxpayers will be relieved to know that they also have a number of options to resolve their tax debts. Below are some of the tax debt relief options to get a solution in place:
1) Offer in Compromise (OIC)
An Offer in Compromise or OIC is an agreement between the IRS and a taxpayer that would effectively resolve the tax liability for a reduced amount. The IRS accepts less than full payment under special circumstances. These circumstances could be one or more of the following:
- Doubt as to what the tax liability is. There must be a genuine dispute as to the amount owed.
- Doubt as to whether the taxpayer could ever pay. This is based on the taxpayer’s value of assets versus the full tax liability.
2) Installment Agreements (IA):
In most cases, taxpayers who owe large tax debt are unable to pay a lump sum to settle their debt. An Installment Agreement can provide the taxpayer the opportunity to make a payment towards their tax debt in smaller, more manageable amounts.
It is important to review other options because there may be better solutions than a payment plan.
The ideal payment plan would be a Partial Payment Plan agreement where a low amount is paid monthly and the debt expires due to the statute of limitations for collections.
There is a Fresh Start Payment Plan typically available for up to $50,000 of tax debt where installments are made over 72 months. Another type of agreement is a full payment installment agreement which is an agreement between the IRS and the taxpayer to pay the full amount over a period of time, usually 10 years or less.
A few different installment agreement options are available:
- Streamline Installment Agreement (SIA);
- Complex Installment Agreement (CIA); and
- Staggered Installment Agreement (SIA)
3) Penalty Abatements (PA)
Penalty abatements are typically available to first-time taxpayers. This is usually tied to an installment agreement. It is not possible to abate interest unless interest is on the abated penalties.
Penalties can only be abated if the debt is paid in full or paid in full through monthly installments. Taxpayers must show just cause as well as show due diligence in resolving debt and being compliant.
4) Currently-Non-Collectible (CNC)
If the taxpayer is experiencing extreme conditions such as economic or personal hardship where expenses exceed income, then this may be taken into account by the IRS to halt collections.
5) Collection Statute Expiration Date (CSED)
The IRS applies an expiration date that the tax debt must be collected by. This is usually 10 years from the day after the date of assessment. This statute expiration ends the government’s right to continue the collection of the liability.
6) Tax Lien Subordination
Tax lien subordination is used to get money out of an asset to pay tax debt owed.
7) Custom Solutions
CuraDebt Tax has an extensive amount of experience providing custom tax solutions to resolve different tax issues. If you have a situation, even if not listed above, we are likely able to help you (and have probably helped many others with the same or very similar scenario).
Resolve Your Tax Issues With CuraDebt Tax Debt Relief
When you choose a professional tax debt relief service company to help you, the most important thing to remember is that it is not just a handful of certifications that sets a company apart – it is the combination of all the qualities listed above that ensures the best tax solution.
Phased Approach To Resolve Tax Issues
We employ a three-step process to solve your or your company’s tax issue in the most favorable manner based on the unique situation and your or your company’s financial profile.
The first step is to do the investigation.
When needed, our tax professional (when appropriate) requests an immediate stay of enforcement with the IRS or State. Next, a financial analysis is done to identify current and projected financials under IRS (and/or State standards), the master tax file is pulled, tax transcripts are obtained, our tax professional reviews them, penalty abatements qualifications are checked, statute of limitations on collection of tax debts are evaluated, possible resolutions (IA, CNC, PPIA, OIC, other) with pros and cons of each are detailed, and a final recommended resolution or resolutions are provided.
Second, if needed, compliance is done by making sure missing tax returns are filed (or ones with mistakes are amended).
It is important to maintain compliant with IRS rules and regulations and ensure that future returns are in good standing. In some cases, by filing missing returns or fixing ones with mistakes, the taxpayer receives a refund from having overpaid in taxes!
Third, the resolution that was recommended in the investigation is implemented to resolve the IRS or state tax issue.
Contact CuraDebt Tax to get a free tax consultation at 1-877-999-0486 or click here to request a free tax debt consultation.