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IRS Tax Debt Developments
October 28, 2020
IRS Tax Debt Developments
The IRS has suspended new tax levies from April 1st through July 15th. So, you have a little breathing room for another couple months. This does not mean that the IRS will automatically release or pause levies that were already in place. Taxpayers who can show that an existing levy is causing economic hardship in which they are unable to pay reasonable living expenses can ask the IRS to release that levy. You can do this yourself or you can enlist the help of a qualified certified public accountant that specializes in IRS tax debt issues.
The IRS will not automatically reschedule payments to July 15th if you are making payments under a direct debit installment agreement. You will need to do this. The IRS has postponed payments under existing installment agreements to July 15th. Taxpayers who have regular automatic debits taken from their bank accounts will need to contact their banks to suspend the scheduled payments through July 15th. Those who do this should also make sure to notify their bank at least two weeks prior to July 15th to resume payment to avoid defaulting on the installment agreement.
Has the IRS issued a substitute for return for a year that you did not file? This situation is rarely in the taxpayer’s favor. You can still file your unfiled back tax returns and correct this situation. Ultimately, at the end of the day, you will want to get from under the cloud of the IRS. There is so many options available for today’s taxpayer to settle and get out from under the weight of IRS tax debt. Consult with an experienced Certified Public Accountant that specializes in IRS tax debt issues and settlement.
We get asked this one all the time. It's simple. What years are not filed? Grab an envelope or box for each year. You start by gathering all of your tax documents and information and separate them by tax year. Be as thorough as possible. This should include any income items such as W2's or 1099's (100-MISC, 1099-INT, 1099-k, 1099-DIV, 1099-B, ect) that you have received. Bank statements can be useful too. You will need your personal information such as your last filed return. Social security numbers for you and your spouse and any dependents. You will also need any deduction items. Retirement account contributions, educational expenses, medical bills, property taxes, medical bills, charitable donations (cash and property), state and local taxes, etc. You may qualify for the american opportunity credit, lifetime learning credit, child tax and earned income credit, child care costs are deductible and the retirement savings credit. Do not worry if you are going to owe a large amount in back taxes interest and penalties. Penalty abatement and interest reduction is very common, as well as, many other tax resolution options. This is a great start to getting rid of the heavy feeling of having years of back taxes due.
The new season is a great reason to make and keep resolutions. Whether it’s eating right or cleaning out the garage, here are some tips for making and keeping resolutions.