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Irs Debt
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What is IRS It is the Internal Revenue Service that applies its own ways to collect money owed to the United States government on the lacking taxes.
If you were unable or not prompt enough in clearing your taxes then you might get a letter from the IRS computer, a Revenue Officer make come over to your house and leave his card or you can get an unexpected call from the revenue officer. It is quite possible that the officer would have levied your bank account, savings account or the paycheck. The officer has the full authority to close your business accounts or seize your property including your residence.
When does this happen Do you get threatened in the first encounter itself No dont get scared. It happens only after the interactions between the revenue officer and you or your appointed power of attorney have broken down. Such a step is taken only after you get a letter from the IRS stating Final Notice Before Levy.
If you have to pay some money to the IRS then it is better to consult an agent, an attorney or a Certified Public Accountant who deals with IRS related issues. Such people can give you accurate advice about your taxpayer rights and solution if you are jammed in a problem. They are well aware of the policies and events and actions of the IRS so they can help you work out the problem and remove the burden from your head.
The fIRSt thing that you should after getting a notification from the IRS is that cross check the accounts
and clarify whether you really owe them the money or not. Check all your tax return receipts and records and letters from the IRS. If you are unable to gather all the information inquire about the statements the Revenue officer will help you getting the apt details; he does not keep copies but all the documents are stored on the computer. You should be precise and certain about what information you are seeking as the officer would be busy and will not be willing to do investigate your case. Tax account information is accessible to the taxpayers and their official representatives without going all the way through the long, concerned Freedom of Information Act.
The IRS Code:
The Internal Revenue Service Code states that all the taxpayers should make their tax payments either by salary withholdings or by estimated tax payments on the 15th of April of each year. If the taxes are pending then the IRS starts its collection.
What can you do about this DEBT
After all the accounts have been clarified and the exact amount has been determined comes the time to confer about the options or alternatives that are available for the payment of the debt. The most common options that are accessed by everyone include negotiating and convincing the IRS on an installment plan, making a compromise or offering bankruptcy. The option that you select will determine your financial status so be careful while selecting an option. All the options have their own positive aspects.
If you are unable to pay the tax of the previous year then the IRS has the power to allow you with installment payment agreement. Before the IRS talks to you and settles down on this agreement you should make sure that you pay all the employment and income tax returns on time that are presently pending.
The present taxes must be paid on time:
The revenue officer may ask you for confirmation as to whether you can borrow money from a bank, get a loan or get help from relatives. The officer may ask you to convert any of the net equity in assets into cash and pay off the debt.
The first step that is involved with the installment payment agreement is that you fill in the form 433A Collection Information Statement for Individuals or Form 433-B, Collection Information Statement for Business, which provides the revenue officer with information of your assets and liabilities and also about your cash in flow and out flow. After you have agreed on the terms then the information is sent to the IRS, where all your payments are checked and any miss out in the payment causes a default report to be printed.
There is another procedure called as Offer In Compromise (Form 656). It has two offers: Doubt as to liability and Doubt as to collectibility. This method is promoted more by the IRS for resolving the debt issue. This method is used when the person has little or no equity in any assets. As for the IRS it thinks an offer to settle a tax liability for less than its full amount valid if the offer is for an amount equal to the net equity you have in your assets.
After the officer receives the Form 656 he may still continue to collect the taxes during the time the offer is outstanding. If the offer is accepted by the IRS, the amount of the agreed upon offer will remove the tax liability, penalties, and interests owed to the government.
If nothing works out then you are left with one last option filing bankruptcy. If the IRS if supposedly the major creditor then the time you file for a bankruptcy is important. You should take the help of a lawyer who is well versed with this subject because if you file for a bankruptcy at the wrong time the tax liability will not be discarded.
It is difficult to decide the best option that would suit your financial status. It is better to consult your tax advisor and keep all the documents handy for any of the offers. Talk to him regarding all the aspects and then decide on the offer.
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