Tax obligations do not just go away. Fortunately, those who struggle with tax debt have options. One specific option to address a hefty bill with the Internal Revenue Service (IRS) is referred to as an offer in compromise.
It’s the fight of the century! The Internal Revenue Service is taking on undefeated fighting champion Floyd Mayweather. The arena: tax court. The odds: heavily in favor of the IRS.
There is an old adage – ignorance of the law is no defense. The same might be said about ignorance of what others do on your behalf.
When you think about the sale of a business, you typically think about the assets of the business being sold to another party in exchange for a sum of money. Of course, the sale would be a taxable event for the seller, as he or she could realize a windfall in the transaction.
There are so many sayings that seem to apply to our topic today. There's the one in the headline. There's also, once bitten, twice shy. And how about, the definition of insanity is doing the same thing over and over again and expecting a different result.
When you purchase property, is it really yours? The answer, of course, is yes. However, there are qualifiers. If you borrow money to buy a house or car and use the property as collateral, your lender has a stake in the game in the form of a lien. However, even if you hold clear title to the property, it is still possible find yourself confronting a lien from state or federal tax collectors.
There is no single answer to the question posed above. Perhaps the most useful response is that the best option is the one in which you clear your tax debt in the shortest amount of time with the least amount of financial hardship.
Minnesota residents may be aware that canceled debt is generally considered as income that must be reported to the IRS. However, there are some exceptions to that rule. For instance, some homeowners who had their mortgage debt canceled in 2015 and 2016 may not have to count it as income. This exemption may apply to those who took out loans to buy, build or improve their main homes in a substantial manner.
In the previous post, our blog discussed how the Minnesota Department of Revenue has a considerable number of administrative tools at its disposal when seeking to collect overdue tax debt, including wage levies.
While most Minnesotans would greet the prospect of being in the crosshairs of the Internal Revenue Service with little enthusiasm owing to the agency's extensive resources and willingness to deploy draconian collection measures, they may not harbor such trepidation when it comes to the Department of Revenue.