Don t Delay In Managing IRS Tax Debt
Below is a MRR and PLR article in category Finance -> subcategory Taxes.
Don’t Delay in Managing IRS Tax Debt
Title:
Act Now: Managing IRS Tax Debt Effectively
Summary:
Explore Debt Resolution and IRS Settlements for Tackling Serious Tax Problems
San Mateo, Calif. ?" Even though tax day is behind us, individuals and businesses with outstanding IRS debts are not out of the woods yet. While both death and taxes may be unavoidable, those facing severe tax issues should understand that negotiating with the IRS to reduce penalties and payments is possible. Bradford G. Stroh, co-founder and CEO of Freedom Financial Network, LLC, provides insights on how to manage these challenges.
Americans are currently juggling more debt than ever, heightening the likelihood of tax problems. In 2004, uncollected IRS taxes soared to over $250 billion. During that same period, IRS levies (where the IRS seizes assets for unpaid taxes) exceeded 2 million, marking a 21 percent increase from the previous year.
According to Stroh, taxpayers with debts under $10,000 typically can manage the repayment themselves or opt for an IRS installment plan. However, when tax liabilities exceed $10,000, professional assistance becomes crucial. Specialists can step in to negotiate with the IRS and help achieve favorable settlements.
Tax relief specialists, often attorneys or certified public accountants, possess the expertise to unravel the complexities of IRS processes. They assist consumers in understanding IRS rules and reestablishing good standing.
Based on the gravity of the situation, two types of IRS settlements are available:
- Offer in Compromise: This reduces the principal amount owed.
- Installment Agreement: A payment plan with potentially reduced penalties.
“Don’t let overdue taxes idle,” Stroh advises. “The IRS is serious and increasingly aggressive about tax collection. Unresolved tax debts can lead to liens on homes or garnished wages.”
Advisors can guide consumers through these steps:
1. Assess the situation to determine taxes owed.
2. Evaluate if the case qualifies for “doubt as to collectability,” “doubt as to liability,” or claims of “economic hardship.”
3. Calculate the total owed, including taxes, penalties, and interest, and explore possibilities for penalty cancellations.
4. Develop a strategy to manage and eliminate tax debt.
5. Negotiate with the IRS to establish a resolution.
With recent bankruptcy reform laws, taking action becomes even more essential. Previously, consumers with severe tax debts might seek Chapter 7 bankruptcy protection or rely on the 10-year statute of limitations. Now, a stricter "means test" pushes many towards Chapter 13 bankruptcy, involving repayment plans instead of debt elimination. Partnering with a debt resolution service can be more cost-effective, allowing for payment plans without the need for court or attorney fees.
“Regardless of the approach, it's time to confront and manage your tax burdens,” says Stroh. “Fortunately, experts are available to guide you.”
About Freedom Tax Relief, LLC:
Freedom Tax Relief provides consumer debt resolution services, working to negotiate with creditors and reducing principal balances. Based in San Mateo, Calif., and serving over 5,000 clients, the company manages more than $200 million in consumer debt, helping clients find alternatives to bankruptcy, credit counseling, and debt consolidation.
You can find the original non-AI version of this article here: Don t Delay In Managing IRS Tax Debt.
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