If you owe more in tax debt than you can realistically repay, you should talk to a tax attorney about negotiating an offer in compromise (OIC) with the IRS. An OIC allows you to settle your tax debt for less than the full amount. Getting one approved, however, can be something of a challenge.
As we've discussed on this blog before, the IRS's enforcement budget has been slashed by a quarter since 2011. That has meant fewer audits and collection activities overall, and it has focused those efforts on working people more than on the wealthy. In 2017, Congress directed the IRS to allow private collection agencies (PCAs) to collect unpaid taxes.
Many people don't realize that they could lose their passports if they are found to be seriously delinquent in their tax liabilities. This is a relatively new penalty for nonpayment that was created under the 2015 Fixing America's Surface Transportation Act (FAST Act). The Act requires the IRS to certify seriously delinquent debts to the State Department, which will then pull the taxpayer's passport.
You owe federal taxes, and you also have a credit card that will pay rewards on anything you use it for. When you run the numbers, are the rewards worth the cost?
The Internal Revenue Service (IRS) and the Minnesota Department of Revenue recognize that not every taxpayer can pay off their tax bill. For whatever reason, a tax bill may simply be more than the taxpayer can afford. In certain situations, these taxpayers can qualify for an Offer in Compromise.
Not every taxpayer in the country made the April 15, 2019 tax filing deadline for their 2018 tax returns. Some were still gathering paperwork and trying to navigate the complex new rules. Those who found themselves in this situation may have filed for an extension.
Even Hollywood’s elite find the Internal Revenue Service (IRS) a tough adversary. The most recent to learn this lesson: Hollywood movie star Wesley Snipes.
On jointly filed tax returns, each spouse can be 100 percent responsible for back taxes caused by errors or omissions. The tax issues started when the wife was accused of embezzling almost $500,000 from her employer in 2010 and 2011. After a conviction for theft, she was sentenced to prison.
Tax obligations can result in serious consequences. Businesses that fall behind in tax obligations can face more than stiff penalties from state and federal agencies, they could face loss of property.
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.