Tax Debt Solutions Blog

Tax Relief: You Need To Know This About Installment Agreements

Installment Payment Plan

Debt under $25,000 easily qualifies for a payment plan, but debt over $25,000 must be negotiated.  A payment plan has the downfall of penalties and interest accumulation during payment which could take years to pay off.

IR Code 6502 allows ten years for the IRS to collect tax money.  To get an IA, the IRS will grant you the extension if you sign Form 900.  Delay the process by first speaking to a tax advisor.  The IRS may not remember to give you the form; in those cases, make sure you request a Form 900. If you don’t sign the form, you don’t get an installment agreement.

Negotiating Monthly Payments

If you can’t pay your tax in a maximum of three years or you owe in excess of $25,000 ask for a monthly payment plan and complete Form 433-A or –B.  Each revenue officer will come to a different conclusion on how much you should pay. 

Strategies to get a payment plan:

• Tell them what payments you can afford when handing in Form 433- A or -B.
• Commit to paying less for income essential living costs only, i.e. amount IRS states you can afford after essentials.  You offer to pay lowest amount as it’s hard to revise once you sign installment plan.
• If you have $0 or a minus amount contemplate an Offer in Compromise, collection suspension, or bankruptcy.
• Make an initial payment when you suggest an agreement.  Continue the payments regardless if the IRS permitted your IA.  Paying a set amount, in a timely matter, for three months may convince the officer that the payment plan and amount is right for you.  If you don’t have the means to start immediate payments, a check that is postdated may be accepted.

Tax bills higher than $25,000 must be approved by a manager, not a tax officer.  If an IA is approved it could take months to get it in writing.

If You Can’t Fulfill your Installment Payment

Being unable to fulfill a monthly payment requires an exceptional reason such as disability or loss of employment.  Call 800-829-1040 for help and also contact the relevant tax officer.  If the IRS doesn’t agree, they can start procedures to seize your property; contact the Taxpayer Advocate Service.

An appeal against a revocation can be restarted but the IRS is usually not compliant if the amount is more than $10,000.  You must supply new documentation showing your changed circumstances, affecting income and living costs. During the new process for an IA, the IRS may take wages and accounts.

Tax Relief: Tax Law Adjustments Benefit Your Pocket

It is time to get your Tax Form 1040 organized.  Approximately forty percent of US taxpayers will file their tax return this month.  There are adjustments to the tax law bringing down the amount you hand over to Uncle Sam and bringing you some tax relief.

 

Recently there were three adjustments/revisions to first-time and move-up homebuyer credits.  The latest is most beneficial.  The American Recovery and Reinvestment Act of last year mean tax owed can be brought down dollar-for-dollar.  This is a money-back credit and you may be eligible for a refund even with a tax bill of zero.  The first-time homebuyer’s credit was amplified to $8,000.  Longtime residents with a minimum of five straight years prior to purchasing a new home, get up to $6,500.  A property owner must qualify to receive credit.

 

New homeowners installing Energy Star rated units can get a tax credit of $1,500 when filing a return.  For example, energy saving air conditioners and furnaces are eligible.  This credit is available in 2010.

 

By returning a Schedule L you can claim for sales or excise taxes spent on new vehicles.  This is possible even if you claim regular tax deductions.  The new Schedule A will continue to be used for deductions by itemizers.  Your deduction depends on earnings and cost of a new vehicle.  A lot of people stand to benefit.

 

The American Opportunity Credit substitutes the Hope Education Credit.  The AOC provides a student with credit of $2,500.  You can include expenses for the first four years of post-secondary studies.  It’s possible to get back a maximum of $1,000 without owing taxes because credit is refundable.

 

Those who lost employment the previous year and relied on unemployment reimbursements get the initial $2,400 free of tax.  If both spouses lost their jobs and both received unemployment reimbursement each is entitled to $2,400 free of tax totaling $4,800 per married couple in 2009.

 

Americans who donated to the Haiti disaster have the opportunity of claiming the write-off on 2009 or 2010 tax return if itemized.

 

Claims for standard deductions carry more items and they must be accompanies with a Schedule L.  The new items are:

 

Single filers - $500 and joint filers $1,000 for state or local real estate taxes

Form 4684 for net disaster

State or local sales or excise taxes for new vehicles

 

The above is in addition to the existing old items:

 

Heads of household - $8,350

Eligible widowers and widows and married couples filing a return jointly - $11,400 

Singles and married individuals filing a separate return - $5,700

Tax Relief: Would a Few Extra Bucks in Renewable Energy Credit Help?

It's all around us now...GREEN everywhere. On posters, billboards, magazine covers and in the mouths of our children when they come home from school! Doing more to help the environment and to save money is big business and is suppose to be our ticket to a better tomorrow...a green one, no doubt. But don't fret; there is money to be made for businesses and individuals, in the area of renewable energy under the American Recovery and Reinvestment Act Tax Credits. You can gain extra bucks with savings, income, tax credits, tax deductions if you have your head set to "Green" and do your research well.

Blow Some Money into Your Pocket

There are HUGE incentives to businesses and individuals to go for ‘wind power' either by installing the equipment needed to use for energy or to build new facilities to provide wind power to entire community. Along with wind power, credits of all kinds are available for solar powered appliances like hot water heaters, geothermal heating devices, and plug-in electrical servicing equipment for the "plug in cars of the future".

There is a Cure for Green...MORE GREEN!

Being sick of GREEN might be a new age illness. But if it is, the treatment will likely be the dollars kept in your pocket over the course of years! This new area of renewable energy is in the ‘baby' stages of research and in the near future will be readily available to everyone.

Just think, with today's technology some already get a monthly paycheck for their solar power! Your power could provide the fuel your neighbor uses! And what could be better than getting a check FROM your electric company...with no bill attached!

Tax Relief: I Can’t Believe It...The IRS Actually WANTS To Help Me?

Ten years ago on a cold dark night... Just kidding! Seriously, 10 years ago the I.R.S. began a new separate operation and this one wasn't designed to freeze your account, seal up your house and leave you homeless! The Office of the Taxpayer Advocate was the beginning of ‘friendly' voices on the other end of the phone! The new idea was to make tax filing a wee bit friendlier and easier for those of us who are "tax illiterate". The theory was if you actually helped people learn how to fill out their returns and answered their questions nicely, they would be more likely to file and pay their taxes! Are you thinking what I'm thinking? It took them HOW MANY years to figure out treating people nicely would make them cooperate better? Imagine that!

Easier Forms and Phone Service ‘With a Smile'

With some exception, the Tax Payer Advocate Service brought a much easier form to fill out and a better understanding on HOW to fill it out. But those who prayed for weeks before making the critical call to ask questions, were suddenly afraid they had gotten a wrong number! They were treated nicely, for a change. The Office of the Taxpayer Advocate was also set into place to help the I.R.S. with oversight of tax preparers...you know the ‘guy' that either gets you back a bundle or doesn't get your business next year! Secret visits to professional preparer's offices showed a bunch of in-accuracy and sometimes HIGH tax preparation fees.

The Office of Taxpayer Advocate Service is prepared to help mediate any problem with the I.R.S and at least point you in the right direction. They won't write off your tax debt...but they WILL make sure it is fair!

Tax Relief: Lost Everything? An Offer in Compromise May Help

This potential option may NOT have been used as much as it may in today’s economic collapse. People really ARE losing everything...houses, cars, jobs, families...EVERYTHING. So what happens if you owe a tax liability from ‘better days gone by and cannot even pay for a cup of coffee? The I.R.S. has your back! A little known I.R.S. Offer In Compromise may save the day and bunches of bucks for you!

How Does It Work?

Well as with many things, there ARE forms to file. But basically when you apply for this assistance to settle your tax debt the I.R.S. must formulate and calculate your ability to pay along with all your assets. If all your assets are truly GONE then there shouldn’t be much of a problem. But the feds will look at your income potential, as well as ANY income you have now...and look at what you have that COULD be sold to satisfy the debt. Its sort of like...if everything ISN’T already lost, it will be once they attach a monetary value to it! Evaluating your potential earning power, could be a problem. Just because you have the potential to do a certain professional job, doesn’t mean you can get one in this economy. So it is likely if this is your situation, you will have to be ready to haggle for your tax relief!  The real bottom line is nothing will completely relieve you of the debt...all you can pray for is for an Offer in Compromise to lower your tax debt. And there is a $150 filing fee, which of course is like a million dollars if you have lost EVERYTHING. But if you qualify under the I.R.S. low income guidelines this fee could be waived. 

Tax Relief: Roll Over and Keep On Truckin' With the NOLCP

Whether your small or large business, according to the television...YOU’RE FAILING. You’ve written a letter to Santa...but you’re still looking at beans and cornbread for breakfast tomorrow. Money is SQUEAKY tight! Well, the IRS has a workshop reality to pump real-time adrenaline in the veins of your business...buying you time! Maybe you would rather do the “Survivor Challenge” and eat worms than face doing taxes this year? “Well hold the worms Bucky!” If your business lost more than it gained, the Net Operating Loss Carryover Law Program (NOLCP) law can help you eat steak again! With the NOLCP law the taxes you paid five years back can be paid BACK TO YOU in a lump sum refund! If you don’t want to get a refund going back, you can use the loss to offset any taxes you owe for up to twenty years!

Who Gets the Lollipop?

If your business makes under $15 million per year...you get the big “lollipop” and can take tax refund for up to five years prior with the option of taking a credit forward for up to 20 years! So it should be called a carry-backwards and a carry-forward...the choice YOURS! And Even if you’re making over $15 million you can still go back two years. If you choose refund the I.R.S. guarantees payment within 45 days...but there is a small catch. Due to the nature of the beast these filings and this program will be looked at very carefully! The Net Operating Loss Carryover Law Program should be filed for by April this year, but with the Feds nothing is set in stone. So take heart, there likely is a form or...two hundred of them, to get the ball rolling for you. 

Tax Relief: Stop Wondering “What is Tax Relief?” and Get the Facts

Are you one of many Americans wondering, "What is tax relief?" When it comes to being in debt, back taxes are one debt issue that must be resolved. There are no "loop holes" or other tricks that will get you out of your obligations to Uncle Sam. Failing to comply with demands made by the IRS can result in serious consequences. Garnishment of wages, along with possible levying of personal property, is just a portion of what the IRS can do. Tax relief is the vehicle needed to pull you out of IRS tax debt. To loosen the grip of IRS liabilities, there are a few facts you should know about tax relief.

 

Tax relief is an instrument attainable by taxpayers in debt. The government offers several tax relief programs designed to help taxpayers out of IRS debt. There are a multitude of different programs available that will put an end to your "What is tax relief?" questions. Each tax relief program holds different requirements.  Likely candidates for tax relief programs vary with personal circumstances.

 

One program that many taxpayers seem to qualify for is an OIC. The Offer in Compromise Program is a highly effective method of tax relief. This program allows you to settle your IRS debts for a small percentage of what is actually owed. In the event of qualifying for this program, you could even find yourself feeling like a kid at Christmas as you make your payment. With the Offer in Compromise Program, you must prove two things. You must prove that your yearly income barely meets your allowable lifestyle expenses. You must also prove that your assets are of little to no worth.

 

Now that you know a little more and realize that there are plenty of programs to choose from in regards to tax relief, rather than wondering "What is tax relief?", you can begin focusing on which program is right for your particular situation.

Tax Relief vs. Tax Amnesty?

 

If you are in tax debt and are still asking "What is tax relief?" then you really need to take the time to find out. Americans owe the IRS billions of dollars in back taxes and penalties. There is no feasible way to collect on such an enormous amount of debt. Therefore, the government offers programs designed to boost taxpayers right on up and out of the IRS debt pit. To understand how to apply for these programs, one must realize the differences between the programs. Just as all taxpayers' circumstances are unique, so are all tax relief programs.

 

There are two types of tax relief programs that many taxpayers mistake as the same. Tax amnesty is often confused with tax relief. There is a huge difference in the two.

 

Tax Relief programs are offered to qualified candidates in order to lower their tax liabilities and assist them in their efforts to pay off their past due IRS tax debts. Many tax relief programs allow taxpayers to pay pennies on the dollar of what they owe. Often the need to pay interest and penalties fly right out the door as well.

 

If the question "what is tax relief?" still runs through your mind, you should also know what tax relief is not. Tax relief is not tax amnesty. Tax amnesty is actually geared toward criminal tax liabilities. One tax amnesty program involves the Voluntary Disclosure Policy. It enables the IRS to withhold criminal charges as long as the taxpayer voluntarily files before Uncle Sam begins an actual criminal investigation into their affairs. With a tax amnesty program, a taxpayer has to pay all taxes owed, as well as interest and penalties. Through tax amnesty, the taxpayer will not be forgiven his or her original tax obligations in any way. The purpose of the program is to get people to voluntarily pay certain tax debts without fear of being prosecuted on charges of tax evasion and the like.

 

Now that you have a better understanding of what tax relief is and what it is not, perhaps your search for tax relief programs will not be as frustrating.

Tax Relief: Understanding Tax Relief through Tax Settlements

 

For those of you who have tax issues that are constantly haunting you, there is help available. Tax relief programs offer debt relief to taxpayers who are otherwise unable to fulfill their IRS obligations. Tax settlements are a form of tax relief that offers the benefit of paying a percentage of the IRS debt. Tax settlements are divided into different programs designed to overcome tax debt.

 

Offer in Compromise

An offer in compromise is a popular method of tax relief among taxpayers. With this particular variation of tax relief, your tax debt is paid off for a small percentage of what is owed. If you can prove to the IRS that your financial circumstances hinder you from complying with IRS demands to pay, you generally can qualify. This is the number one method of tax relief. Unfortunately, not enough people qualify for this program.

 

Installment payments

If you qualify for this method of payment, you are still expected to pay the full amount of debt. The advantage it gives you is the ability to pay over a prolonged amount of time. The IRS will set up a monthly payment plan that allows you to pay off debt. However, no portion of what is owed is lowered or decreased. You will eventually be able to pay off the IRS with this form of tax relief.

 

Applying for such tax relief programs can be a time-consuming and tedious task. There is a large amount of paperwork and negotiations involved when dealing with the IRS. The government is not going to simply slide you a deal across the table without a fight. There is a lot of information and a variety of facts you will need to consider and be aware of in order to help a process such as this run as smoothly as can be deemed possible. Do not waste any time concerning tax relief; get the ball rolling and begin your journey right away.

Tax Relief: Am I Eligible For Tax Relief?

 

Do not pass up the opportunity of resolving your tax issues because you are uncertain if you qualify for a tax relief program. Due to the recession, many Americans are unable to get the IRS off their backs. Many of us are just uneducated or ill-informed where tax relief in concerned. It is crucial to understand which tax relief programs are attainable and what the qualifications are for each.  In order to breathe a sigh of relief, you must be aware of the steps you need to take to be relieved of your tax burden.

 

Tax relief programs, sometimes considered tax settlements, are designed to rid taxpayers of IRS debt. When it comes to tax relief, it is critical to contact Uncle Sam before he contacts you. Tax relief programs create a simple vehicle for settling tax obligations. The IRS clearly understands that billions of dollars in back taxes is impossible to collect. This is a key factor motivating tax settlement programs.

 

One tax relief program that offers great benefits is the property tax program. This program was created to help taxpayers who owe on real property. Property such as real estate and aircrafts give qualified taxpayers a refund/rebate on real property taxes.

 

While most want relief from taxes at the federal level, there are also some forms of tax relief available at the state level as well. Guidelines for eligibility differ depending on state laws and legislations. For example, some states pay a refund check to their elderly residents who are over a certain age. Other states offer rebates on property that has been negatively impacted by natural disasters and other mishaps. There are even tax relief rebate checks issued to residents who fall within a particular income bracket.

 

Tax relief programs lighten the burden of IRS obligations. Property tax relief is just one of many programs you may find yourself eligible for.