Tax Debt Attorney

The maximum time frame within which the Internal Revenue Service can collect your tax debt is called the statute of limitations. It is also called the Collection Statute Expiration Date (CSED).

The CSED is ten years from the date your back taxes were assessed. After this date, the Internal Revenue Service is supposed to erase whatever back tax you owe. Of course, it is not really that easy. In some cases, they may decide to erase whatever lien they have placed against you and lower it to a judgment. Then, they can chase that judgment for an additional ten years.

Even without doing that, the Internal Revenue Service can extend your CSED. For example, if you claim bankruptcy, the CSED can be extended for the term of your bankruptcy plus six months. Bankruptcy does not erase tax debt. Tax debt remains and as soon as you are out of bankruptcy, the Internal Revenue Service will resume its collections undertaking. Many people have been shocked to come out of bankruptcy and find a tax debt waiting for them that they supposed had expired several years prior.

Years ago the Internal Revenue Service had a form 900 that waived the CSED. They would cut deals using this form just as they were about to levy. The form saved you from levy at that time, but waiving the Collection Statute Expiration Date literally gave the Internal Revenue Service forever to collect from you. This practice was later banned.

Your CSED can be extended if you leave the country for any period of time. Your CSED can be extended during the period you apply for an Offer in Compromise and for the time you undergo due process hearings related to collection. They can even extend your CSED while you are on military deferment.

In determining the period of a CSED, remember that the term is ten years from assessment. If you have a passed return that you just filed, the CSED is from the time that debt is assessed, and not from the time it was owed.

If you don’t file a return, that does not necessarily mean that you have gotten away with anything. The Internal Revenue Service can file a substitute return for up to three years. They often wait just until the three years is almost over and then they can assess your debt and begin the ten-year countdown on the CSED.

As the date of expiration draws near, the Internal Revenue Service efforts to collect from you will step up. You will find it much more difficult to negotiate with them at this point, since they are running out of time.

If you owe taxes, IRS can recover that debt within a period of 10 years. Beyond that period, the debt expires. So if there is no action from IRS for 10 years, you can safely assume that you no more owe those taxes. But what is the reality? For more information, visit www.TaxDebtAttorney.InfoAuthor:Chintamani Abhyankar

Contact a tax debt attorney if you do not want to face the IRS alone, it can be daunting at best to deal with an institution that has the ability to collect taxes owed in a variety of ways that can be costly, stressful and heartwrenching.  It is best to work with a tax attorney who can assist you in getting a tax debt settlement so you can pay off your taxes and focus once again on your financial future.

One thing about dealing with a bad IRS problem is that it is scary. The IRS has this unique way of making you feel small, especially if they feel you owe back taxes. Any government organization can be scary to deal with because it is always the impression of the tax payer that the government holds all the cards. The IRS feeds of this misconception and uses it to their advantage whenever they can. Too many of the millions of people who owe back taxes cave in to these taxes and pay far more than they should. Don’t let the reality of IRS debt settlement intimidate you, fight back.

You have many options available to you and there many ways to achieve an IRS debt settlement. There is absolutely no reason for you to leave money on the table because the IRS imposes such harsh penalties and interest as a method of scaring tax payers. Most times you can negotiate a favorable deal as long as you know what you are doing and stay strong. You have rights as a tax payer and one thing you may want to remember is that the IRS works for us and not vice versa. This attitude may help you deal with your situation better. Exercise your rights and get what you deserve. But, there is a caveat to this attitude and that is not to take your confidence to mean you don’t have to deal with the situation. You need to jump on any IRS problem as quickly as possible or you could pay dearly for it.

The minute you receive any notice of tax problems you should begin your strategy of IRS debt settlement. Your tax debt can increase ridiculously if you let it flounder. Penalties, interest, late fees can all compound exponentially over time. If you let that happen you have fewer tools to use to whack that debt down to a reasonable level. The IRS wants to settle just as much as you do so they will be willing to deal as long as you show you are earnest in settling your debt.

The best advice in the face of an IRS debt settlement is to consult tax professionals who know how to get your tax debt down. Tax experts like CPS’s tax attorneys and other professionals know exactly how to beat the IRS at their own game and get you the best possible deal. Don’t be afraid. Fight them at their own game and win.

Author: Manuel Davis Jr.

Article Source: http://EzineArticles.com/?expert=Manuel_Davis_Jr.

A qualified and experienced tax debt attorney can help you figure out the best way to stop the IRS tax debt collections and face your tax debt head on.  You should not take on the IRS alone, a tax attorney can assist you with communicating and negotiating with the IRS and uphold your financial best interest.

One of the core tasks of the Internal Revenue Service, better known as the IRS, is to collect federal income taxes. Our Congress has provided the IRS with an extreme amount of authority and power to allow it to carry out this task. Taking these powers into consideration and the vast number of resources they have at their disposal, the IRS has become the world’s largest, most successful and most aggressive and successful collection agencies.

Nonetheless, in process of fulfilling its collection mission, Congress HAS NOT given the IRS the authority or the reach to unfairly, unjustly or illegally harass taxpayers or put them in a situation of undue hardship in pursuit of its collection mission.

Bearing that in mind, the IRS is bound by law to work with each and every taxpayer to find a resolution to that taxpayer’s past-due tax liability. This resolution is based on that taxpayer’s distinctive economic situation. For example, it wouldn’t compute for the IRS to garnish the wages of someone who has monthly living expenses of $1350.00 and they earn a meager $400.00 per week with a tax liability of $12,000.00. Such as action would most likely put that person in the streets.

For that reason, the IRS offers several programs to taxpayers with past-due federal income tax liabilities. The purpose of these various programs is to present an different of options for taxpayers to clear up their tax liabilities.

Here are the most common programs:

Currently Not Collectible Status

 Installment Agreement 

Offer in Compromise

Before the IRS will consent to any of these Tax Deb Relief solutions, they will perform an analysis of the individual’s financial situation. This indepth analysis will help the IRS determine the reasonable collection potential of the taxpayer. By taking a proactive position and initiating a resolution with the IRS, most taxpayers with past due tax liabilities can come to a solution that is good for them based on their financial status.

Author: Joel Marks

Article Source: http://EzineArticles.com/?expert=Joel_Marks

Consult a tax debt attorney if you are considering bankruptcy due to, or at least in part due to, tax debt.  You want bankruptcy to be a last resort, and you can avoid bankruptcy if you work with a tax attorney to communicate and negotiate with the IRS.

Declaring bankruptcy is the last method that you can use to solve the tax problem. But proper care must be taken if you are going for this method because if IRS finds that you have cheated them then severe actions will be taken against you. So, before choosing this method, consult a tax relief professional to see if this is the best choice for you.

In order to get the tax benefits under the bankruptcy then you must file a petition for bankruptcy in the bankruptcy court. Once this petition is filed, a bankruptcy estate will be created. It includes all the assets and properties of the person who files the bankruptcy petition. In order to create a separate taxable entity the petition must be filed under chapter 11 or chapter 7. These chapters belong to the bankruptcy code. The tax benefits to be obtained depend on the chapter in which the bankruptcy petition is filed. It is highly advised for a person to use an attorney or tax attorney when dealing with bankruptcy. If the person is forgiven by the bankruptcy court then the tax that he had to pay to the IRS will be cleared. But, it also does not allow this individual to receive the normal tax benefit that most taxpayers receive. So, you must think twice before filing a bankruptcy petition. This method should only be used if you have exhausted all other options. It is likely that the IRS will allow you to settle your tax debts in some other fashion if they know you are going to declare bankruptcy.

There are 5 rules put forward by the bankruptcy code. If the tax debt of the bankruptcy filed person satisfies these 5 rules then only his petition will be approved. The first rule is regarding the due date for tax return filing. This date should be at least 3 years ago. The second rule is that the return must be filed at least 2 years before. The third rule deals with the age of the tax assessment and it should be at least 240 days old. Fourth rule says that the tax return must not have been completed with the intent of fraud. According to the fifth rule the person must not be guilty of tax evasion.

If you are are strongly considering bankruptcy as a tax relief method you should consult with a tax professional before doing so. Most of the time, the tax benefit and savings in money you receive from bankruptcy are no better than other tax settlement methods that are offered for individuals with severe financial problems under IRS code. If you settle with the IRS, you will be considered to be in good standing with them and you will receive normal tax treatment in the future but this is very different with bankruptcy.

Author: Manuel Davis Jr.

Article Source: http://EzineArticles.com/?expert=Manuel_Davis_Jr.

Discuss with a tax debt attorney if you would be best served by dealing with your tax debt by paying it off with a consolidation loan.  You may have a better interest rate than that offered by the IRS if you were to set up a payment plan, however, you do want to be cautious in adding more debt to your overall financial picture.

The benefits of tax debt elimation with a consolidation loan:

The interests charged are significantly higher because they are not the regulated ones but punishment ones (fines) instead because the law seems to understand that tax debt affects all the society. Also, the processes to recover the money owed are shorter and more expeditious and thus, tax debt needs to be resolved in a speedy manner with great risks of losing assets if not.

The problem is that money isn’t always there and though the smarter thing to do is to pay taxes when they are due and avoid debt accumulation, once it has already happened some sort of alternative needs to be used. A not so uncommon practice is to resort to debt consolidation loans. These loans are useful because they charge low interests, because other creditors can be included too and thus all debt is unified but there is also another reason that is especially important when it comes to tax debt elimination.

Interests On Debt Consolidation Loans Based On Equity Are Tax Deductible

The interests on a home equity loan (most debt consolidation loans are based on equity), are tax deductible. That means that all the interests on the loan you take to pay off your tax debt and other debts can be taken away from your tax payments on the following period. This implies either great savings or it can be viewed as a further reduction on the interest rate paid for the new loan. Thus, you would be exchanging expensive debt for an even cheaper consolidation loan.

Other debt that is not tax deductible and usually charges higher interest rates are: car loans, motorcycle loans, other vehicle loans, credit card debt, store card debt, payday loans, cash advance loans, unsecured personal loans, etc. Therefore, it is a good idea to take into account all this debt when deciding the loan amount of your consolidation loan.

Some Restrictions May Apply

It is possible to deduct the interests on a consolidation loan of up to $100,000. This limitation applies both to a single loan or a combination of loans. For instance: If you have a property worth $200,000 with an outstanding mortgage debt of $40,000, you would be able to obtain a home equity loan of up to $160,000 and use it for consolidation. However, you would only be able to deduct the interests on the first $100,000.

But you could also have two properties, worth $150,000 and $50,000 each with a combined mortgage debt of $40,000 and the solution would be exactly the same. The only difference might be the need to request two separate home equity loans instead of a single one. But you would still be able to deduct the interests on up to $100,000 of the combined new debt.

Also, bear in mind that this ability to deduct the interests on a home equity loan used for consolidation, applies only to the part of the loan that is secured with actual home equity. Those loans that finance 125% of the property can only be partially useful. For example: If the property is worth $100,000 but there is a mortgage balance of $50,000 and you manage to obtain a 125% home equity loan for $75,000, only the first $50,000 interests will be deductible even though $75,000 is lower than $100,000. This is due to the fact that the remaining $25,000 is not secured with actual equity.

Author: Mary Wise

Article Source: http://EzineArticles.com/?expert=Mary_Wise

A tax debt attorney would certainly offer the advice that it is most likely NOT in your best interest to simply apply your tax debt to a credit card.  It is a bit like robbing Peter to pay Paul, no?  You are risking more debt, and possibly debt at a much higher interest rate than the interest rate that the IRS might offer you in a payment plan situation.  You risk defaulting on that debt, leading to an impact on your credit score, your ability to obtain loans in the future…you could even risk a bankruptcy!  Contact a tax attorney first, before making any such decision, as they can assist you with communicating and negotiating with the IRS for a much better method of resolving your tax debt.

If you’ve been thinking about paying the IRS the thousands of dollars of income tax you owe by credit card, I would stop that sort of thinking right now!

The federal government prepares for the possibility that you may not have the money that is owed to them, so they allow taxpayers to file an extension to pay the debt.

If you file an extension, you’ll still have to pay interest on the amount you owe. But the rate is considerably lower than charging the debt on your credit card.

The Internal Revenue Service within the last few years have become very accommodating when it comes to working with taxpayers. If the amount you owe is really large, they encourage tax payments by installment plans.

Credit card debt has been an ongoing problem for millions of taxpayers. The one thing you don’t want to do is to add more debt, especially placing the IRS as an additional debtor.

Most credit cards carry a horrendous interest rate anywhere from twelve to twenty-one percent. If you owe taxes you know you can’t pay, there is the temptation to place it on your credit card. Again, don’t! You have a higher interest rate on your credit card, if you apply the lump sum you owe, you’ll be financing the debt at a higher interest rate than what you would have had to pay by working with the IRS.

Bottom line, you will end up paying much more in the long run for your taxes by placing what you owe on your credit card.

The IRS will work with you, if you’ll just stop putting it off and pick up the phone to discuss your situation. Try to work with the extensions and lower interest rates they offer.

This avenue is a better alternative than either going into default on unpaid taxes or piling more debt on an already nearly maxed out credit card.

Author: Frank Mayes

Article Source: http://EzineArticles.com/?expert=Frank_Mayes

Contact a tax debt attorney if you have back taxes that you owe.  While the following advice regarding waiting out the IRS is one that is often quoted, you should truly consult a tax attorney if indeed this is the route you wish to take.  You do need to know the implications of allowing IRS debt to simply go unpaid while you wait for a statute of limitations to expire.  The IRS often does not simply just let you skate by with your owed taxes, in fact, they can assess tax liens on your home and/or property, garnish your wages, and find other routes to collect taxes that you owe.  As I would even say of the advice you find on this website, you need to do your research, discuss your options with an attorney who will provide you with legal counsel and make an informed decision for yourself, your family and your financial situation.

It is humane nature to take the path of least resistance. When it comes to paying and settling back taxes, in some cases, the only way the tax payer is going to resolve the matter is through some type of tax debt relief such as the IRS Statute of Limitations. If you are not aware of this form of tax debt relief, take notes, this could exactly what you’re looking for to get from under the burden of back taxes. Here’s what the IRS Tax code has to say about the IRS Statute of Limitation. This comes directly from the IRS. This is one option of resolving your back taxes the IRS will not inform you of.

25.6.1.2 (10-01-2001)

What is a Statute of Limitation

1. A statute of limitation is a time period established by law to review, analyze and resolve taxpayer and/or IRS related issues.

2. The Internal Revenue Code (IRC) states that the Internal Revenue Service (IRS) will assess, refund, credit, and collect taxes within specific time limits. These limits are known as the Statute of Limitations. When they expire, we can no longer assess additional tax, allow a claim for refund by the taxpayer, or take collection action. The determination of Statute expiration differs for Assessment, Refund, and Collection.

Do you understand what you just read? If you qualify, this is instant tax debt relief! In a nutshell, what the IRS is saying is this, from the original date of the assessed back taxes; the IRS has ten years to collect. If not, all bets are off. There are other options that may be available to you. The point being is, don’t be discouraged, daunted or intimidated just because your situation seems hopeless. Examine your options.

Author: Joel Marks

Article Source: http://EzineArticles.com/?expert=Joel_Marks

If you have a tax debt, a tax debt attorney can assist you.  While this article focuses on some of the ways you can resolve your tax debt, you may need to work with a tax attorney to ensure that you are taking the best route to deal with your tax debt and not face the IRS alone.

If you have a tax debt from past years, or have already done your taxes for this year and expect to owe money, you can find a solution. The solution is not to ignore the debt, however. Although the IRS only has ten years to collect a tax debt, it has many very powerful tools at its disposal during those ten years. You’ll be much happier if you deal with it now. Possible solutions include:

Savings and personal loans
Extension of time to pay
Temporary delay
Installment agreement
Offer-in-compromise

Savings and Personal Loans

If you owe an IRS tax debt, the best solution is to use your savings or borrow funds to pay the debt. By paying the full balance when it’s due, the amount you owe will be much lower than if you request one of the IRS payment options, which will include penalties and interest. If you borrow against your home to pay the IRS debt, the interest you pay may actually be tax deductible.

Extension of Time to Pay Tax Debt

If you prepare your taxes before April 15 and know you won’t be able to pay the tax due, you can file for an extension of time to pay. Depending on your circumstances, the extension will be anywhere from 30 to 120 days. Pay as much as you can early to reduce the penalties and interest owed. Interest averages 5% a month and varies by month. You must request the extension before April 15 in order to qualify.

Temporary Delay

If you’re experiencing a financial hardship or other personal hardship such as severe illness or a loss of financial records due to a natural disaster, the IRS may grant a temporary delay of payment of your tax debt. In some cases, penalties may also be waived, but interest usually applies. You must contact the IRS to request the delay. The sooner you contact them, the sooner they can help you.

Tax Debt Installment Agreement

If your debt is large enough that you can’t pay it within 120 days, you can request an installment agreement from the IRS. An IRS officer will review your income and expenses, and then determine a payment plan. Interest will apply, but the plan will legally extend the amount of time you have to pay. During that time, you must stay current with your tax returns and payroll taxes. You must also make every installment payment on time. If you fail to do either, the IRS may rescind the agreement.

Offer-in-Compromise

Offers-in-compromise are frequently advertised on television, but they aren’t the simple tax debt solutions they’re made out to be. Only 15% of OIC applications are approved. You must be able to show the IRS that this is the most you can afford to pay. As of 2006, there are additional restrictions governing OIC applications and agreements:

You must pay a $150 application fee

The IRS must process the application within 24 months or it is deemed automatically accepted (average time is 12 months)

You must be current with your estimated tax or payroll withholding for the current year

You must not be in bankruptcy

You must have filed all required tax returns

If offering a lump sum, you must make a 20% down payment

If offering monthly payments, you must make those monthly payments while the offer is being processed.

If you fail to make a 20% down payment or miss one of the monthly payments, depending on the option you chose, the offer will be considered withdrawn

If you fail to file a tax return or pay a tax liability during the five years after the offer is accepted, it will be withdrawn and the full liability will again be due

If you owe a tax debt, the best option is to pay it in full by the due date. If you can’t do that, then consider the remaining options. Avoiding the debt is never the best option. Instead, contact a tax professional for helping finding the right solution for you.

Author: Justin Narin

Article Source: http://EzineArticles.com/?expert=Justin_Narin