Insurance World

The Internal Revenue Service continues to ramp up the number of tax liens and levies it files against taxpayers, despite a high number of Americans who are unable to pay their taxes. The government agency filed liens against 1.1 million taxpayers last year, up from 168,000 in 1999, according to the IRS website. In the past seven years, it has filed more than 5 million tax liens.

"The IRS is going after ANYONE who owes money, not just the wealthy", according to National Taxpayer Advocate Nina E. Olson, who works for an independent arm of the IRS. "By filing a lien against a taxpayer with no money and no assets, the IRS often collects nothing, yet it inflicts long-term harm on the taxpayer by making it harder for him to get back on his feet when he does get a job".

IRS Recognizes the Need to Address a Struggling Economy

"Tax collection requires a delicate balancing of the government's interest in collecting revenue and ensuring that all taxpayers pay their fair share of tax... and protecting financially struggling taxpayers from unnecessary harm," Olson testified.

The IRS recognizes that many taxpayers are struggling financially and is taking positive steps to settling tax debt through collection delays, payment plans and tax settlements. The IRS has recently indicated plans to implement new procedures of the availability of payment programs to those taxpayers who may not have previously qualified, the availability of tax settlement programs to those taxpayers who may not have previously qualified, a more expeditious withdrawal of tax liens - just to name a few.

Demand for Tax Services

The demand for tax relief services has reached an all time high. Business owners whose Companies are struggling have lost their houses and savings. They can't pay their employment taxes and they still owe money. Taxpayers may owe taxes on debt that was forgiven. Taxpayers may have lost their job or withdrawn money from their retirement accounts and owe early withdrawal penalties in addition to their regular taxes. The IRS sends a series of notices, each getting more urgent. When the taxpayer is unresponsive, its easier to push the lien or levy buttons that trying to work with someone to set up a payment plan or debt reduction.

Taxpayers often believe they cannot afford tax relief services and try to resolve the problems themselves.

The layperson is at a significant disadvantage dealing with the IRS. Taxpayers are not familiar with debt relief programs and ultimately do not know their options or rights in dealing with the IRS. Too often, this results in paying more than you may actually owe, not applying for penalty relief, not qualifying for payment plans and not exploring settling tax debt or incorrectly applying for settling tax debt for a reduced amount.

Hiring a highly-trained, experienced, certified public accounting, who deals with IRS problems on a daily basis offers taxpayers a distinct advantage over national, debt relief companies, where your case is assigned to a lower-level marketing specialist; unfamiliar with tax law, IRS policy and procedure, IRS negotiations and taxpayer rights.

In many cases you can reduce your tax debt significantly - whether this is the reduction of the penalties and interest that may have been assessed, a correction of errors or underreporting of deduction that may be available or a negotiated settlement amount of the overall tax debt. The key is to have the "right" person on your side; handling your account.

Mitch Helfer is the managing partner of CPAMiami; a full service public accounting firm providing guidance with federal and state tax matters, tax preparation and strategic consulting, IRS representation and problem resolution. Visit our website at http://www.cpamiami.com/ for more helpful information and get your tax problems resolved today!

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Although the majority of Americans receive a tax refund from the IRS every year, there are still many taxpayers who owe money and are unable to pay the amount all at once. For those individuals who struggle to pay their taxes, the IRS has announced a number of methods by which they can pay their bill.

The goal of these programs is to help individuals struggling with their tax obligations to get a fresh start and meet their tax responsibilities, without adding any excess burden.

1. Tax bill payments. The IRS expects any amount billed for late taxes to be paid promptly and in full, including any penalties and interest. If the taxpayer is unable to pay this amount, it is often in their best interest to consider getting a loan in order to pay the bill in full rather than pay it in installments over time.

2. Additional time to pay. Based on the circumstances of the individual, some taxpayers may be granted additional time to meet their tax obligations. Additional time, though usually brief, may be requested through the Online Payment Agreement application at their website.

3. Installment Agreement. Those who cannot immediately pay the amount in full may request an installment agreement. This is an agreement between the taxpayer and the IRS in which the individual agrees to pay the amount owed through monthly installments, instead of one large payment. Before pursuing this kind of agreement, a taxpayer must first file all the required returns and be current with their estimated tax payments.

4. Online Payment Agreement. For those who owe $25,000 or less in combined tax, penalties and interest, individuals may request an installment agreement using the Online Payment Agreement Application found at the IRS' website.

5. Collection Information Statement. Those who owe more than $25,000 in combined tax, penalties and interest may still qualify for an installment agreement. They are, however, required to complete a Form 433F, Collection Information Statement, in order to be considered.

6. User fees. In the case that an installment agreement is approved, a one-time user fee will be charged. The user fee applied for new agreements typically amounts $105, or $52 in cases where payments are deducted directly from an individual's bank account. For those lower-income individuals who meet the requirements, the fee may be reduced to $43.

7. Check withholding. Taxpayers with an outstanding amount due to the IRS may want to consider changing their W-4, Employee's Withholding Allowance Certificate. This can be done through the individual's employer.

The Lee Law Firm's foreclosure lawyers have many years of experience in all aspects of IRS debt problems. They have extensive experience with IRS problems and provide Dallas tax clients with a plan to eliminate their tax debts and obtain a solid financial future.

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