Careful Consideration of IRS Problems Will Save You Time
It’s natural to want to resolve problems with the IRS as soon as possible. This is why many taxpayers don’t spend sufficient time thinking through their tax problems. If you have such problems with the IRS, there important considerations:
Is the way you want to solve your IRS problems possible? One of the better means of solving a tax problem is to opt for an Offer in Compromise. Prior to making this decision you must decide if you are a suitable applicant. There are specific blueprints used by the IRS to work out the amount for settlement. More often than not, their blueprint is not the same as your reality. The most common disagreement is the dissimilarity between the amount the IRS expects and your living costs. If the IRS blueprint is rigid and your living costs can’t cope with their expectation then consider bankruptcy or an installment plan.
Can the IRS seize your property? Due to the gravity, you must ascertain risk of levy and seizure. Even though it’s not common, you must negotiate with that risk possibility in mind.
The IRS has a preference for liquid assets like salaries and cash in the bank above assets without equity like bank loans, houses and cars. They must warn you prior to levying or seizing any assets. They must allow you to settle or appeal before they act. You must know if the IRS has the right to take this action prior to making a choice.
What time limit is provided by the Statute of Limitations on Collection? According to the statute the IRS is allowed a collection period of ten years beginning from the time your liability is recorded by the IRS. Careful consideration is a must as your actions during that time affects the date of conclusion. E.g. if an Offer in Compromise (or OIC) is refused the IRS gets further collection time because it takes up to one year.
If there’s only a short time before the ten years ends avoid an OIC. It is better to opt for an installment plan. A Hardship or Currently Not Collectible declaration is also preferable.