What To Do When You Need Help With Back Taxes That You Can't Pay

Forget about the FBI or the CIA. The IRS is easily the
most feared government agency in the U.S. Created in 1862 by Abraham Lincoln,
the Internal Revenue Service is responsible for collecting taxes and enforcing
the Internal Revenue Code. Few Americans are aware of the fact that income tax
was enacted to cover the cost of war expenses during the Civil War. As critics
are quick to point out, income taxes are not mentioned in the original
Constitution. After all, the Founding Fathers were fighting against excessive
and unreasonable taxation.



But whether we like it or not, the Sixteen Amendment to the U.S. Constitution
(1913) gave the government the legal right to collect personal income taxes. It
also made it a crime for any citizen to refuse to pay his taxes. According to
the IRS, about one percent, or 13 million taxpayers are audited each year.



An audit is authorized when the IRS determines that an individual taxpayer
erroneously claimed deductions or exemptions, or failed to report income. IRS
examiners will review your tax return and may ask you to provide documentation
to support your claims, which they go over with a fine-tooth comb. If a single
entry is out of place, they may order the taxpayer to pay more.



Whether the result of audit findings, forgetting to file tax returns, or not
being able to pay your taxes in full, IRS tax debt is something you must deal
with sooner rather than later. According to the IRS, over twenty million
American citizens owe back taxes. Some owe hundreds, others owe thousands. The
total estimated shortfall is over two hundred billion dollars. What should you
do if you are being dunned by the IRS?



First and most importantly, you should not panic. Yes, the IRS is scary, but
they don�t want to throw you in prison. What they want is their money. It is
true that if you fail to file your return or pay what you owe, they will come
after you to make sure you do, but their end goal is simply to collect the back
taxes owed to the government. Getting audited is not a criminal accusation. It
simply means that you may have made a mistake.



Serious tax questions can only be answered by a trained professional. If you
owe a substantial sum in back taxes, it may be a good idea to contact a tax
consultant or advisor. No matter how much you owe, a tax professional can
determine the best course for reducing your tax debt. Let us take a moment to
discuss the kind of tax advice you might receive from an enrolled agent,
attorney, or accountant.



Negotiate a Compromise



One in every seven taxpayers owes back taxes. With statistics like that, the
IRS can�t afford to make acceptions or spend too much time on any one taxpayer.
More often than not they will take what they are allowed by law according to
the law. If you happen to qualify according to IRS guidelines, a tax accountant
may recommend an offer in compromise. As they often say, a good deal is one
where both parties walk away unhappy. In this circumstance, tax accountants can
help a taxpayer gather all the information and documentation required to settle
your tax debt. It is important to understand that your tax professional acts as
your representative, not your negotiator. Arriving at an amount to offer in the
offer in compromise depends largely on what you owe, what the IRS can expect to
collect if they continue hounding you for payment, and how much money the IRS
thinks you�ll make in the next ten years.



Installment Agreements



Since few taxpayers that owe back taxes can afford to pay them all at once, the
IRS will often let you pay your tax debt in installments. When stretched over a
long enough period of time, tax accountants should be able to negotiate a deal
that lets you pay your debt with monthly installments you can afford. But be
careful. If you lapse on a payment, the IRS can and will levy your bank account
for the amount due. Just so you know, the first question they ask you when you
set up a payment plan is, �Where do you bank?� The reason is they want know
where to find your money if you miss a payment.



For more information on tax debt reduction, consult a reputable tax advisor or
consultant.

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Need Help Settling Overdue Taxes?

No one ever said being a grownup was easy. Sure, there are
some perks. But above all else, adults are expected to be responsible. They
have to go to work, raise their kids, and pay their taxes. That�s how the whole
human comedy keeps perpetuating itself. Of course, every now and then it hits a
snag.



America has earned a rather bad reputation for debt in recent years. The United
States is officially the world�s biggest debtor nation. It�s easy to blame the
government for this imbalance. After all, they played a part in creating the
record trade deficit. But when it comes to personal debt, Americans must accept
responsibility.



Most shoppers know that credit card debt is out of control. The average family
is saddled with around ten thousand dollars of credit card debt. But did you
know that Americans also owe more in back taxes than any other nationality?
According to the latest figures, there are over twenty million delinquent
taxpayers in the U.S. They owe in excess of two hundred billion dollars in back
taxes. The agency that is responsible for collecting these debts is the
Internal Revenue Service (IRS).



No one likes getting a call or a letter from the IRS. They are arguably the
most feared government agency in America. On average, they audit around one percent
of taxpayers each year, and almost a third of those audited are among the
poorest taxpayers, people who claim the Earned Income Tax Credit. An audit is
triggered when automated IRS review processes identify tax returns that meet
certain specified criteria. Being audited means the IRS thinks you are cheating
or making errors. Either way, they want the behavior to stop and they think you
owe more money than you paid. This is not, however, a criminal offense.
Millions of Americans make mistakes on their tax returns each year, many due to
the complexity of the current tax code.



What to do about tax debt?



When a taxpayer is audited, it means he claimed a deduction or exemption the
IRS disagrees with, or that he failed to report income on a tax return. Many
audits leads to a tax bill that gets sent with the audit findings. But no
matter how you wound up with tax debt, the question is, what now? If the audit
findings or IRS tax bill require you to pay more than you can afford to pay in
one payment, you now effectively have a tax debt. Having an outstanding tax
debt is not the end of the world; it�s not even uncommon. It is, however, a
matter that should be addressed as soon as possible.



Like all debts, tax debts cannot be simply wished away. In fact, they get more
expensive if you ignore them. Fines, penalties, and interest fees can really
add up. A tax professional can help you negotiate a manageable agreement with
the IRS.



Installment Plans



The first thing a tax consultant will do is examine your tax situation, your
finances, and your IRS debt. Once they know what you owe and assuming you have
filed all tax returns and are in current compliance with the IRS, tax
accountants can contact the IRS on your behalf and attempt to negotiate a
payment plan you can afford. But the IRS is not like most creditors. They tend
to dictate what you can afford to you, as opposed to negotiating with you to
determine an amount you think you can afford. Because so many Americans owe
back taxes, IRS agents will work with you on a payment plan, but they are going
to want you to pay what you owe in a reasonable period of time, usually no more
than 36 or 48 months.



Partial Payment



If the taxpayer or his representative can prove that he cannot afford to pay
his tax debt in full, even over time, the IRS payment plan may include a
partial payment agreement. This means that the taxpayer will pay what the IRS
agrees he can afford, which may be less than the amount necessary to pay the
debt in full before the statute of limitations kicks in and the IRS ceases
attempts to collect the debt. Typically, tax relief is only available to
taxpayers who cannot afford installments or if the IRS made significant
mistakes along the way.

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Keep Copies Of Past Income Taxes - And Save Thousands!

Did you recognize that obtaining copies of past income taxes will prevent up to twenty five% on things like mortgages, tiny business loans, and credit cards? It's true! Rates are set by these firms based off a difficult algorithm which appearance at a selection of factors, including past income and previous investments. And what's one among the simplest ways in which to prove past income and past investments? Why, those old tax returns!

It's true! But that's not the sole method those old returns will facilitate your out. Here are 3 different ways you'll use copies of past income taxes can help you out:

? As an employment record. Whether or not you've got work for several corporations over the previous few years or do freelance work, it will generally be onerous to stay track of where you were working when. Copies of past income taxes let you know not only who you were working for, but conjointly when, where, and the way a lot of they were paying you. This is invaluable info for deciding what rates to charge, trying at a replacement job supply, or maybe just polishing up your resume. The additional data you have regarding your previous jobs, the better hiring position you are in.

? Applying for a mortgage. A mortgage is one among the most important expenses most individuals will have in a very lifetime--that is why it's therefore necessary to make positive you do not live through-charged. Dangerous credit--and debt caused by unhealthy credit--is one in every of the leading reasons folks do not purchase their own residence or get stopped at the bank. Fortunately, copies of past income taxes facilitate prove that you're not a credit risk. They show that you've got received a gentle paycheck, through good times and bad, and will even show that you manage to successful pay off debt. They may not speak, but past tax returns will build the most effective character references.

? If you ever get audited. Obtaining audited is not any fun, but it will happen, particularly if you're attempting to tackle paying off back taxes. Fortunately, there is no reason the panic. Most people who get audited aren't simply people who created easy errors, like doing the incorrect type or dropping a decimal point. These mistakes are dangerous, but having copies of past income taxes can facilitate verify your credibility to the IRS--as well as be there to test your numbers against theirs! This is often why keeping copies of past incomes taxes for up to 5 years is recommended.

When you get right down to it, there's all kinds of ways that that copies of past income taxes are handy to own around, from saving you money, to helping you get loans or perhaps paid more. Even if you file your taxes on-line, you'll be able to still save a replica of the filing. That method, you get all the information and savings, and none of the clutter. And even if you print them out, the a lot of copies, the better.

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Filing Income Taxes - Tax Deduction Checklist

Tax Deductions For US Federal Tax System

Did you know that there are nearly 50% of the individuals who file taxes pay more taxes than they need to pay? Laborious to believe, is not it? I'm not suggesting that you are doing your own tax filing however simply understand enough about your own personal state of affairs to save lots of money.

Tax deductions are one in all the key ways you cut back your tax liability. There are 100s of tax deductions however they do not apply to each person. Tax deductions give a tax break to certain folks in bound circumstances.

Example, you will deduct home mortgage interest or medical and dental expenses if bound conditions apply.

The first thing to try and do to find out about tax deductions is to browse some of the tax forms, believe it or not. It will sound strange however reading the tax queries on the forms helps you find out what kind of things will be deducted.

Start with IRS Type 1040. Each person who files taxes has got to file this form. Have a look at the section referred to as "Adjusted Gross Income". In this section there are ten -twelve different deductions. Some might apply to you.

Page 2 of this same form is that the section referred to as "Tax and Credits". This is often where you list any credits that will apply to you. This is not a deduction from income but a credit against taxes that you owe. (Even higher than a deduction.)

Example, if you had spent $one,000 on education you'll be ready to place in on several different lines on the tax form. On line thirty four of the 1040 kind you may place education tuition and fees as a deduction. In this case your taxable income would be $1,000 less. (This would lower your taxes by $one hundred fifty - $350 depending on your tax bracket.)

Or you'll be in a position to put that $one,000 on line 49 as a tax credit. In this case you'd owe $one,000 less taxes. After all, this can be the higher choice. You may not understand this if you had not read the tax form.

The following type to go for tax deductions is Schedule A, itemized deductions. Browse all the lines on this manner and you can determine what could apply to you. Once wanting at these queries you will be ready to determine if you want to take the "Standard Deductions" instead. The quality deduction is a flat amount that applies to everyone however you will have additional deductions and can use the schedule A, itemized deductions form.

The subsequent kind to look at is that the Schedule C form. Whether or not you do not very run a business but you have got extra income that you have got to report, you'll use this form.

Scan section two (Expenses) of this form. See if you've got any of this stuff which will apply in association to earning your extra income. Suppose you made $a pair of,000 further income. If you did not put the quantity on Schedule C than you'd have to pay taxes on the whole $2,000. But, if you had paid expenses of $1,000 then you list the expenses on schedule C and you'd pay less in taxes.

If you have got a tiny business, even a home-based business, there are hundreds of deductions available.

You can conjointly look at the IRS web site and kind in "deductions" into the search box and find out more information.

You'll have a tax preparer prepare your taxes or use a computerized tax program. Regardless of how you file your taxes you wish to know additional info regarding your own case.

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Why You Shoul Pay Taxes

Imagine a world without taxes... Sounds nice, ha? Well, some individuals do not just dream, they create this dream come true. Is what they are doing legal? not thus much. Will you do the identical? Certain you can. But, sturdy word of advice: don't try it at home.

Therefore, how does it really work? How do you rise to the Internal Revenue Service and simply don't pay taxes?

Really it does not work, and if you are doing that you will be in trouble. However for a few individuals this cat and mouse game with the IRS isn't therefore problematic, therefore they made up a listing of reasons (excuses) for not paying taxes to the government. The IRS calls this list "Frivolous Tax Arguments".

And here they are, the most outrages reasons for not paying taxes. Currently bear in mind, there are real people who rather than filing their tax come back, send a letter to the Internal Revenue Service saying that they are not willing to pay any taxes because of the subsequent reasons:

The filing of a tax come is voluntary - no it is not, filing is mandatory, by law.

Taxpayer is not a citizen of the United States, thus not subject to the federal income tax laws - taxpayer can be a citizen, resident or non-resident and as such subject to tax.

The United States consists only of the District of Columbia, federal territories, and federal enclaves - The US consists of DC, fifty state and other territories.

Taxpayer is not an individual as defined by the Internal Revenue Code, therefore isn't subject to the federal income tax laws - taxpayer is either an individual or a legal entity and as such subject to tax.

Taxpayers can refuse to pay income taxes on non secular grounds by invoking the 1st Change - No, the tax code is a federal law, and non secular isn't a ground for non-payment.

Federal income taxes constitute a taking of property while not due method of law, violating the Fifth Change - TITLE 26--INTERNAL REVENUE CODE, imposes the federal tax, therefore representing a due process.

Taxpayers don't should file returns or provide monetary info because of the protection against self-incrimination found in the Fifth Change - Wrong, filing a tax come is obligatory and Fifth Modification is not a legitimate ground for not filing.

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Income Tax Tips To Possibly Save You Cash

Does one prepare your own income tax come back to save lots of cash on preparation? If you do, or you are designing on using this method on your next come back, there are some things that you should know that can help you to avoid making expensive income tax errors. Errors that can cost you some of your refund or which will value you in time having to amend your return and send it in again. Here are some income tax tips to help you get started:

1. Build certain that you recognize that income tax form to use: 1040EZ (for single filers while not itemized deductions), 1040A (for married filers while not itemized deductions) or 1040 (for those who itemize deductions.)

2. Check for errors in your personal information on the income tax come back like your social security variety(s), address, etc.

3. Take the most beneficial deduction. Relying on your circumstances, either the quality or itemized deduction may keep more cash in your pocket. You ought to do the worksheet in your income tax instruction booklet to determine which one would be best.

4. If you have got a home office you'll be able to deduct a proportion of your mortgage interest with your utilities and different things you may have not regarded as business expenses.

5. Do not forget to require any medical expense deductions that you have available. If your employer eliminates your health insurance once taxes and it is more than 7 % of your total income, you'll take this deduction. Include dental and prescription prices as well.

6. Build positive that you have all your forms before you file your income tax return. Suppose concerning any extra jobs or pay you may have received along with interest you've got accumulated.

7. Take your state and native income tax deduction from the previous year's returns.

8. Check the return a minimum of twice for any math errors whether or not you're using a calculator. These will be terribly pricey and are simple to miss.

9. Do not forget to induce all of the necessary signatures on the return. If you're married filing jointly, you may would like both spouses to sign.

10. Think about using tax preparation software. It's a lot of accurate than self-preparation and it will be simple to use and understand and it can check your come for errors for you. You'll conjointly get free or low price tax preparation through the IRS if you have an occasional or moderate income.

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How To Locate Information Regarding Tax Debt Attorneys On The Internet

If you find yourself searching for info about tax debt attorneys, then you should attempt looking within the web. This is most likely the very best resource you can use as it gives you access to the largest collection of information available today. Be careful, however, as the internet can turn out to be very a maze in the event you don't know where to look. What you need is a guide or at least some thing to point you in the general direction where you need to go. Here are some locations in the web you are able to take a look at:

1) Online encyclopedias- These websites are visited a lot on the internet due to the numerous types of info that can be gotten from them. These on-line encyclopedias are often used by individuals in search of comprehensive information concerning a particular topic or subject.

If you're searching for information on tax debt attorneys for study purposes, then you are able to go to one of the on-line encyclopedias available on the web these days. These on-line encyclopedias frequently offer info regarding the various specializations of tax debt attorneys, the methods that they use to assist individuals and how they can be found. This means that you can really discover how a tax debt attorney can assist you to via an on-line encyclopedia.

2) Listings- Many firms prefer to list their contact details in numerous web sites in order to turn out to be accessible to much more customers. Looking via these listings for tax debt attorneys can fairly much be equated to looking in the yellow pages. Sites like these provide the numerous contact details of tax debt attorneys under 1 heading. This may be extremely convenient particularly if you are still attempting to make up your mind on which tax debt attorney to hire.

Listings may also be extremely useful if you have very little thought of what type of tax debt attorney that you simply will need. This way, you'll have the ability to scout out if a particular firm or tax debt attorney will probably be able to assist you prior to committing to anything.

3) Business sites- If you are interested in a specific firm or tax debt attorney but do not know how to contact them, you should attempt to discover if they have a website. Most companies these days understand the fact that the internet has become a very essential medium in bringing info to people. Because of this, companies try to advertise on the web.

4) Web directories- Individuals much more or much less begin their searches utilizing internet directories. Utilizing this kind of website, an individual looking for tax debt attorneys could be able to screen outcomes quite quickly. This means that an individual looking for tax debt attorneys will be able to get rid of the ones that he or she does not need and stick to the ones that can help him or her probably the most.

Internet directories are also very user friendly. This means that individuals utilizing these sites to search for tax debt attorneys will have an easy time and not need to go via different processes such as clicking various buttons only to discover that they lead you to dead ends.

This guide should at least assist you to get started on your search for tax debt attorneys. By following these suggestions, you need to do just fine and you need to have the ability to discover the information you'll need in no time at all.

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