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December 8, 2020

Struggling With Tax Debts? How To Steer Clear Of Trouble With The IRS

Missing tax deadlines spells doom because no one wants to get into trouble with the IRS. Still, thousands of taxpayers do even worse as they end up owing debts every year. It could be the most challenging situation to deal with, as you could face dire consequences such as a federal tax lien, enforced collection action, and even litigation. However, it is still possible to deal with unpaid debts with the right approach. The sooner you handle it, the better it would be if you are serious about getting life back on track. Here are some useful pieces of advice that can get you out of the fix. 

Don’t ignore the issue

The worst way to handle unpaid taxes is by ignoring them because the authorities would not. Even if you are unable to pay your taxes this year, make sure that you file your return before the deadline. For those who expect to miss the deadline, filing for an extension can save you from big trouble. If you miss both, you will have to pay massive late filing penalties, which is only going to increase your debt rapidly. Filing your return can save you from the extra pressure caused by the penalties. 

Consult a professional 

It is tricky to deal with the IRS, more so when you are already facing debt issues. The best approach would be to consult a professional who can guide you with the best choice and help with negotiations if there is a need. While you may consider saving some money by handling the issue on your own, it is advisable to collaborate with an attorney for the smallest of problems because they can land you in a massive fix before you know. 

Take a realistic approach to your situation

Do not expect the IRS to forgive your tax debt because it rarely does so. It is best to take a realistic approach and explore alternatives to clear the dues. You can consult an expert to find more about tax debt forgiveness as the initiative is specifically meant for taxpayers truly struggling with their dues. You may get alternatives like lower tax debts and reduced penalties that will ease the way back and resolve the concerns with the IRS. 

Get things streamlined as soon as possible

Apart from handling the situation realistically by exploring your options, get into action quickly. The best way to do it is by negotiating a streamlined installment agreement with the authorities so that you can pay back the large sum without feeling the pinch. The Fresh Start program lets taxpayers owing up to $100,000 seek such approval for such an agreement. Anyone who has not already entered into an installment agreement within a period of the preceding five years can avail of this program.

Massive tax debt can feel like a crushing burden, both financially and emotionally. The best way to deal with the situation is by coming up with a payback plan because that is the only way you can stay safe from the wrath of the authorities.

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