A majority of people face tax-related troubles once in their working lives. Either it is suffering from paying a heavy amount of tax or the inability to pay tax at all. These troubles may lead you under a debt of owing money to the IRS, which is something you must not take for granted. Even if the IRS leniently works without troubling you much to clear your debts, but you must pay your tax timely.
IRS settlement can scare you a little due to there policies such as levy and federal liens, but there are several points that you should take into consideration to know more about IRS. Keeping them in mind, we have assembled 10 points for you to go through, to learn and remember more about IRS when you owe them. These will help you to understand how IRS works and what benefits you can enjoy through its various policies.
IRS Settlement should be your priority:
IRS may be lenient, but that does not imply you to lack your efforts in any way to collect the debt you owe to them. You should make it your priority to clear your debts. If you are someone who is genuinely under harsh circumstances or going through a financially weak time, then the IRS will be lenient on you. Although if you are someone who is deliberately trying to trick and not pay taxes, then there is a serious chance of you getting end up in jail.
Tax return estimated by the IRS is high:
When you fail to pay your taxes on time, IRS files a tax return on your behalf which leaves the room for them to overestimate. There is a heavy chance that the amount of tax calculated by the IRS will be higher than what you owe to them. IRS does not consider the deductions that you qualify for, which is why the calculated sum is high.
Acknowledge the notice sent by the IRS:
It is important to acknowledge every notice that is sent by the IRS. IRS knows when you are making efforts to fulfill your duties and when you are dodging it. Considering and working on every notice of IRS will allow them leniency towards your pending debt.
You can appoint a tax advisor for yourself:
A tax advisor or attorney is advisable if you are going before the IRS. A professional knows how to handle matters and will only provide you with the best of his knowledge according to your situation. It is important how you represent yourself before them, so having an expert by your side will help you in a better manner.
IRS offers relief programs:
Fortunately, there are a large number of IRS tax relief programs that can help you to pay off your debts or get out of it. It can even lessen the amount you have to pay or extend the time limit for you according to your situation. Go through your eligibility criteria for the relevant program under the guidance of a professional and then apply for the most compatible one.
Affect to your credit score:
The tax liens that IRS claim on you can heavily affect your account status. The amount you owe acts as a factor regarding your credit score, so a pending debt can dent your credit score by a large number.
IRS can take a large amount of your paycheck:
When you don’t take IRS notice seriously and choose not to pay the debt on time, then IRS ultimately starts garnishing from your paycheck. IRS can deduct more than half the amount of your paycheck and even has the freedom to make deductions from your personal funds such as your retirement fund.
You won’t go to jail for owing tax:
You can never get jailed for owning or avoiding to pay tax. Although you might end up in jail if you trick the IRS or evade the tax you owe. IRS can forgive tax avoidance, but tax evasion is a criminal offense.
IRS’s superiority over other creditors:
If you are under several debts, then the most prioritized one will be the IRS’s debt. IRS has the right to seize your personal belongings and property if you fail to return the amount of tax you owe. They let the other creditors know that the IRS has the first claim over the possessions of the taxpayer if they fail to pay it timely.
IRS cannot collect taxes due for 10 years:
IRS considers debts void that is due for 10 more than 10 years. This statute does not encourage you in any way to dodge your tax debts. The IRS will probably apply all possible methods to acquire the tax from you so beware and pay it before such a thing happens.
These points will help you to manage your debt and allow you to take advantage of your rights. Use these to pay your taxes diligently on time. It is important to fulfill this duty as a noble citizen of your nation.