Category: Blog

Debunking 5 Myths About the IRS Offer in Compromise Program

The IRS is considered a brutal government agency by many taxpayers who become uneasy when filing time approaches and shake in their boots when contacted by the agency. There are a number of situations when the IRS can cut down the amount of tax debt, provided the taxpayer qualifies according to guidelines laid by the IRS. One of the IRS debt forgiveness programs that promises IRS tax debt relief is the “Offer in Compromise”, which taxpayers and businesses sinking under tax debt can give a shot. Despite the existence of such programs, delaying paying your taxes without good reason can

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Tax Relief Options for Couples on Joint Returns

irs innocent spouse relief

When couples file a joint return, they are jointly and severally liable for the tax, interest, or penalties that arise from the joint return, even if after they decide to go their separate ways. In the event of a delinquent spouse, the innocent spouse can file for three different types of tax relief from the IRS – innocent spouse relief, separation of liability relief, and equitable relief. You need to carefully determine which relief applies to your situation by thoroughly reviewing all three definitions given below and taking a close look at your joint income tax return. It is recommended

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6 Must-Know Facts about Penalties on Late Filing and Late Payments

Late payment is not the only condition when the IRS penalizes tax holders. The central tax authority may also penalize those who file their taxes after the deadline. If you owe taxes, and fail to file them in time, it may lead to interest and penalties. However, if you are due for a refund and fail to timely file your tax return, there will be no penalty from the IRS. This blog post discusses five facts about late tax filing and payment penalties every taxpayer must know. Take a look. 1. Possibility of Two Penalties The first important fact that

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Not Liable for Your Spouse’s Taxes? File for Innocent Spouse Tax Relief

When a married couple has filed for a joint tax return, the liability for paying the taxes becomes joint and several. While some can trick an unsuspecting spouse into filing for a joint return on their taxes, others may withhold knowledge of an underpayment of taxes. When filing for divorce, a spouse can also file for innocent spouse tax relief. Whether you are filing for innocent spouse relief while married, or doing so after separation, there are a few innocent spouse tax relief requirements you must fulfil. Before proceeding to file for tax relief, let’s take a look at some

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4 Tips to Help Improve Chances of Offer in Compromise Approval

Get an offer in compromise approved

Individuals that owe huge amounts in unpaid taxes that cannot pay turn to an “offer in compromise”. OIC is an agreement between the IRS and a taxpayer to settle the taxpayer’s tax liability for less than the owed amount. The IRS reviews the income and assets of the taxpayer and documents every detail of their financial situation, before deciding whether or not sanctioning of an OIC is a justified decision. Many applications submitted to the IRS are often rejected due to negligence on the taxpayer’s part. Most taxpayers are not familiar with how to get an offer in compromise, which

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All You Need to Know about IRS Debt Forgiveness

IRS Debt Forgiveness

What Is IRS Debt Forgiveness? There are times when defaulting taxpayers genuinely want to pay their debt, but are unable to because of an ongoing financial crisis. The IRS recognizes such scenarios, and therefore, has several debt relief and debt forgiveness provisions to help well-intentioned taxpayers avoid any financial hardship that may arise if they are forced to pay more than what they can afford. In this blog post, we take a look at provisions that the IRS offers to taxpayers. Let’s begin. Offer in Compromise (OIC) Taxpayers may request the IRS to reduce their existing tax liability in a

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Innocent Spouse Relief : What You Need to Know

Innocent spouse relief

Married couples who decide to jointly file a tax return can reap certain tax benefits in the form of tax breaks and credits. When you file jointly, however, you are jointly and severally liable for tax debts and any additions to it, such as interest or penalties, which may arise later from the joint return. Both spouses who file a joint tax return are liable for an equal amount of tax return, even if they divorce in the future or only one spouse earned all the income or claimed improper credits or deductions. What is important to note is that

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Must Know Information about IRS Levies

IRS bank levy release

If a taxpayer fails to pay their due taxes, the IRS holds the right to levy their property in order to collect the outstanding amount. After assessing the debtor’s tax liability, the IRS sends them a “Notice and Demand for Payment” (a tax bill), which is followed by a “Final Notice of Intent to Levy and Notice of Your Right to A Hearing” (also called “levy notice”). The second letter is sent at least 30 days before the date decided to levy the defaulter’s property. Taxpayers can not only avoid a tax levy, but may also get it released, provided

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Received a Federal Tax Lien? Here is the Way Ahead

Federal Tax Lien

A federal tax lien is one of the last things you would want to receive as a taxpayer. Under a tax lien, the IRS claims the rights to the defaulter’s assets, such as real estate, bank accounts, and vehicles. The lien may even limit the taxpayer’s ability to get credit in the future. Taxpayers, who file for bankruptcy, may still have to continue paying the lien. If you too have received an IRS tax lien, here are a few things that you need to know to find your way out. The Options at Hand 1. Pay Your Debt in Full

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Understanding Wage Garnishment Laws in Texas

The IRS has strict wage garnishment laws to enforce debt collection on unpaid taxes, no matter whether we talk about Texas or any other state. If a taxpayer voluntarily or involuntarily evades or defaults paying their taxes, the IRS can impose a wage garnishment to ensure the defaulter clears their dues. In cases of wage garnishment, the IRS contacts the employers of the defaulting taxpayer directly and asks them to deduct a specific amount from their salary and sends it to the IRS. The worse part is, unlike other creditors, the IRS directly levies a wage garnishment without taking the

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