Articles Tagged with Back taxes

Actions to Take Before You Can Pursue an IRS Tax Settlement
Before attempting to settle your IRS tax debt, there are a few things that every taxpayer should do. While some tax settlement cases can be fairly straightforward, there may be more advanced settlement options available for certain taxpayers, and missing out on these opportunities may prevent you from eliminating significant back taxes, penalties, or interest.

Follow these steps before attempting to settle you tax debt:

File Back Tax Returns

How To Apply for Currently Not Collectible Status
If you are unable to pay your tax debt, you can request that the IRS report your account as currently not collectible (CNC). This will temporarily delay all collection activities by the IRS.

Applying For Currently Not Collectible Status

The most common reason the IRS determines that an account is currently not collectible is due to economic hardship. You will often be required to submit a Collection Information Statement when applying for CNC status. This statement lists all of your assets, income, and expenses. The IRS will not take your word for it if you claim you have a financial hardship; they will make their own determination based on your financial information.

Do I Qualify For Innocent Spouse Relief
There are three different types of innocent spouse relief. The IRS offers these defenses to taxpayers who want relief from the joint and several liability that is imposed on married taxpayers who file joint returns.

Traditional Innocent Spouse Relief

To qualify for traditional innocent spouse relief, you must meet all of the following conditions:

How to Get California Income Tax Relief
California tax problems can come as a result of an IRS tax audit, if the IRS sends the result to the California Franchise Tax Board (FTB). The FTB can also initiate its own audit, or you can simply find yourself in a difficult financial situation and be unable to pay your California income tax debt.

The FTB offers a number of ways to get tax relief. If you have a complex tax situation that requires professional assistance, talk to a tax attorney before you agree to any tax relief programs.

Installment Agreements

When to Work With a Tax Litigation Lawyer as Well as a Bankruptcy Lawyer
If you have a large amount of tax debt, it is possible that you also have other types of debt that are causing financial difficulties. You may be considering bankruptcy if you have a combination of tax debt, secured debt, and unsecured debt. In this case, you might be unsure whether to seek advice from an expert tax litigation lawyer or a bankruptcy lawyer.

When to Talk to a Tax Litigation Lawyer

There are certain tax issues that require assistance from a tax lawyer, regardless of whatever other financial problems you are experiencing. If you have any of the following issues, you should contact a tax attorney:

Why You Should Consider an "Offer in Compromise" to the IRS
An Offer in Compromise (OIC) is a program that allows taxpayers to  settle their tax debt for a lump sum which is less than the total amount owed. The IRS will look at your ability to pay, income, expenses, and assets to determine how much they are likely to recover from you. If the IRS is convinced that you are offering them more than they can reasonably expect to recover from you, they may accept your OIC to settle your tax debt.

Why the IRS Accepts OICs

There are three reasons that they IRS will consider accepting your OIC. First, if you can show that you do not actually owe the money to the IRS. This is referred to as an offer in compromise based on doubt as to liability.

Can Back Taxes and Penalties Be Negotiated
Back taxes can be financially crippling both to you and your business. If your tax debt is more than you can afford to pay back in a lump sum, or if you think there may be some error on the part of the government in assessing how much you owe, you do have some options at your disposal.

Offer in Compromise to Reduce Back Taxes

One such option is known as the Offer in Compromise, which is an application to reduce your tax liability to less than the full amount you owe, under certain circumstances. Acceptance of an OIC is at the discretion of the IRS and is based on a combination of factors including your ability to pay, income, assets and total expenses. To be eligible to submit an Offer in Compromise, you must be current on all your tax filings and not be in a bankruptcy proceeding.