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Three of the most common tax problems faced by taxpayers are:

WHAT IF I CAN'T PAY THE FULL AMOUNT DUE WITH THE RETURN?  

WHAT IF I CAN'T PAY THE AMOUNT OWED FOR PRIOR YEARS?

WHAT IF I HAVE NOT FILED TAX RETURNS IN PRIOR YEARS?

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WHAT IF I CAN'T PAY THE FULL AMOUNT DUE WITH THE RETURN?

If you are unable to pay the full amount of tax due with the return, file the return without payment with Form 9465 asking for an installment payment plan. You can request up to 60 months to pay the amount due on your return. This avoids the 5% per month late filing fee if you do not file your return on time. You will be charged interest and a smaller late payment penalty, but if you are sincere in your efforts to pay the monthly installments the IRS will work with you. However, once you agree to a schedule, STICK TO IT and don't fall behind. Return to Top

WHAT IF I CAN'T PAY THE AMOUNT OWED FOR PRIOR YEARS?

Sometimes, no matter how hard we try, we fall behind in our finances and just can't catch up. Often this involves seeking Bankruptcy Court relief. However, income tax obligations are not dischargeable in bankruptcy. So what do you do? Fortunately, the IRS and many states offer a fresh start to certain taxpayers who qualify. If you are financially insolvent and your allowable monthly living expenses plus secured and/or court ordered obligations are barely covered by your (or exceed) your monthly income, you may qualify for relief of your outstanding tax obligations. If this is the case you may possibly be able to satisfy your outstanding taxes (plus outstanding penalties and interest) for a fraction of what you owe. Should you find yourself in this situation, contact us to discuss your situation. Return to Top

WHAT IF I HAVE NOT FILED TAX RETURNS IN PRIOR YEARS?

Taxpayers sometimes fall behind in filing their tax returns. This can be an extremely costly mistake, as once the Statute of Limitations expires you are no longer entitled to claim any refund for that year. To make matters worst, the IRS can use information that they receive from employers, banks and others from whom you received income, and file what is known as "substitute returns". The IRS is required to prepare these returns without the benefit of any tax exemptions, deductions or credits that you may otherwise claim on your return if voluntarily filed, and compute the tax at the highest possible rate (i.e. Single with no exemptions even if you are married and would have filed a joint return). This often results in a balance of tax due, which would be turned over to the collections division to collect the tax from you. If ignored, this can result in a Notice of Intent to Levy. Thus, even if you may have otherwise been entitled to a refund, you would then be faced with collection enforcement based on the balance owed on the IRS prepared return. As the Statute of Limitations as it applies to tax assessment and collection only applies if a tax return has been filed, the IRS can prepared this substitute return at any time. DON'T LET THIS HAPPEN TO YOU! If you have not filed your prior year tax returns contact us at once so we can help.  Return to Top

 

 

 

 

 

Copyright © 1999-2013 IRS CIRCULAR 230 NOTICE:  To ensure compliance with recently enacted U.S. Treasury Department regulations, we hereby advise you that any and all tax information contained in this website should not be considered as tax advice nor intended for the use of any taxpayer for the purpose of evading or avoiding tax penalties that may be imposed pursuant to U.S. law. Furthermore, the use of any tax information contained in this communication has neither been written nor intended for the purpose of promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any taxpayer, and such taxpayer should seek advice on the taxpayer’s particular circumstances from an independent tax advisor. The information contained throughout this web site is provided without charge, and although all efforts have been made to ensure the reliability of the information contained in this internet web site, the information contained herein should be used for general understanding only and should not be relied upon exclusively as the basis of any tax or financial decisions or for any positions taken on any tax return. Advice should only be obtained directly through the retention of a competent tax advisor. Tax Power is an established trademark of Powers & Company, Inc. and Powers Tax Services since 1999. Unauthorized use of the phrase Tax Power without expressed permission of Powers & Company, Inc. will be prosecuted to the fullest extent of the law. Last modified: January 10, 2014 The articles, guides and published information contained in this website is protected by U.S. copyright laws and cannot be reproduced in any form without the expressed permission.

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