Making tax debt payments more manageable

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What does a person upon the discovery of actually owing more income tax than he or she can immediately pay? Similarly, what options are available to a person who has accumulated a significant amount in back taxes?

Suddenly finding out issues in tax payments can take the wind out of anyone, especially if it adds to one’s financial burdens. It can be challenging enough to make ends meet during difficult times. Having problems with the IRS can lead to further financial complications that are best avoided.

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Fortunately, the IRS understands that income tax and back taxes can be a severe burden on taxpayers, which is why it instituted a program to allow for payments in monthly installments rather than a punitive lump sum.

To apply for an installment agreement, the taxpayer must submit the IRS Form 9465. If the total debt is less than $25,000 in taxes, penalties, and interest, the taxpayer can then complete an online payment agreement instead. Otherwise, he or she must submit a Form 433-F along with the Form 9465. The IRS will usually respond to the application within 30 days.

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Once granted, the taxpayer will get the time needed to pay the tax liabilities. As long as the terms of the agreement are honored and the taxpayer makes the payments on time, then any collection efforts by the IRS or other collection agencies will stop. However, it is also important to remember that the IRS will still apply interest and penalties to the unpaid balance until it is fully paid.

Wall and Associates Inc. helps taxpayers find solutions to many IRS tax problems. To find more information on tax payments issues, visit this website.

Managing tax disagreements with the IRS

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There are times when disagreements between the IRS and taxpayers arise. It is for these cases that the IRS Office of Appeals was created. With the appeals system in place, it is possible to resolve many issues without relying on a court of law.

The appeals system applies to taxpayers who: have received a letter from the IRS explaining their right to appeal the IRS’s decision, do not agree with the IRS’s decision, or are not signing the agreement form that was sent to them.

In appealing tax matters, only the current laws apply. The process and provisions may be confusing, which is why taxpayers with tax agreements are advised to seek the services of a qualified tax consultant for advice and representation in order to get the compromise that they want.

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If a taxpayer’s case qualifies for an appeal, the IRS Appeals Office will review the issues of the case with a fresh perspective and schedule a conference with the taxpayer. The conferences may be conducted through correspondence, via telephone, or in person. Many disagreements are often settled in conferences, making expensive and time-consuming court trials unnecessary. The Appeals Office will consider any valid reason for disagreement, save for moral, religious, political, constitutional, conscientious objection, or similar grounds.

When appealing an audit or tax decision, however, the services of a qualified tax consultant may mean the difference between a failed appeal and a successful one.

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Wall and Associates Inc. is a leading tax negotiation and representation firm. For more resources about the IRS appeals process, visit this Google+ page.