8 Reasons to Take Advantage of Tax Debt Relief

May 1, 2020

The Internal Revenue Service: no one looks forward to hearing from the agency, especially when they owe the IRS money. If that’s you, then there are a few reasons why you should seek tax debt relief.

When Should I Consider Help?

Simply put, when you owe the IRS money and can’t afford to make a payment, it is time to seek help. But first of all, you should prepare and file your tax return on time no matter what. Your problem will only get worse if you fail to do that.

Filing early gives you more time to deal with the matter. And being on time with your return will give you an exact amount of what you owe. From there, you can work with the experienced experts at Geurax Tax Resolution on searching for and evaluating options and finding a solution.

8 Reasons to Take Advantage of Tax Debt Relief

1. The IRS Has a Good Memory

Millions of Americans struggle to pay their taxes, so you’re not alone in searching for tax debt relief. But tax debt isn’t something that should be ignored, because the IRS surely won’t forget it.

Unlike other government agencies, the IRS can garner wages, seize property, and have accounts frozen. And the agency rarely forgives debt. So it is in your best interest to deal with tax debt head-on and in a timely manner.

2. Debt Can Grow Quickly

The money you owe to the IRS can increase at a substantial rate if you don’t do something about it. If you file your tax return late, there is a late-filing penalty of 5% of the tax owed per month, up to a maximum amount of 25% of the amount of tax owed. And if you don’t pay off the debt, there’s an underpayment penalty of 0.5 to 1% per month of the balance owed.

Interest and penalties will make that tax debt seem like an insurmountable burden to overcome.

3. You Could Have Issues With Your Pay and Bank Accounts

If phone calls, letters, visits, interest, and penalties don’t get your attention, the IRS will move on to your paycheck. The agency is legally allowed to garnish your wages in the event of delinquent tax liability, up to 75% of your net wages. And the IRS does not need to take you to court to do this, either.

The IRS can also freeze your bank accounts. That means you can’t make any payments for utilities or other bills, and no “auto-pay” arrangements will work.  

4. You Could Have Property Problems

The IRS can put a lien or legal claim on your home or other property if you have back taxes. If the agency has a legal claim to your property, that means you can’t refinance.

You can submit a lien withdrawal request but you won’t qualify for a lien removal if you owe less than $25,000 or if the debt can be repaid within five years. You’ll have to pay the bill in full or sell the home to pay the back taxes. If you can’t do either, you may qualify for a partial payment installment agreement.

The IRS can also seize your property, which can be your home or your vehicle.

5. The Effects of a Tax Lien Are Significant

A tax lien is a public record that is taken seriously by companies interested in your creditworthiness. Car insurance rates will probably increase as your credit goes down because of the lien. And finding a lender willing to give you a loan will be very difficult.

6. You Could Go to Prison

Do not think you can avoid this entire ordeal by not filing a tax return. Failure to file a return is a criminal offense, and the failure to file will likely be discovered since employers send forms such as W-2s to the IRS and state governments.

A person who fails to file a return may face up to a year of prison per year without a return.

7. There Are Benefits to Tax Debt Relief

No one wants to deal with the IRS. But working with Geaux Tax Resolution, you won’t have to. Led by former IRS employee Bryon Garrety, Geaux has over 35 years of experience dealing with the IRS on behalf of people who owe back taxes.

Tax law in the United States can be complicated, especially with hundreds of tax law changes occurring each year. The entire process can be overwhelming, so help is available for taxpayers who owe the IRS money. Having tax experts in your corner certainly helps.

8. The IRS May Be Open to a Deal

Willing to Talk

Some may find it surprising, but the IRS may be willing to work with a taxpayer with overdue taxes. Negotiating with the agency can be a difficult but necessary way to go, so don’t do it alone. Having Geaux Tax Resolution in your corner is a major advantage in any negotiation with the IRS.

Working with the IRS through Geaux Tax Resolution will help you land a better deal. Geaux has knowledge and experience in dealing with the IRS.

Installment Agreement

You can complete an installment agreement when you complete your tax returns. In most circumstances, the IRS will approve the agreement request if you owe less than $10,000 and have filed returns in the last five years.

Such an agreement will allow you to make small monthly payments until the debt is paid off. The longest repayment term is six years. This may be a tax debt relief avenue that you and Geaux choose.

Offer in Compromise

If you owe the IRS more than you know you can afford to pay, and you’re able to prove it will destroy your finances, you may qualify for an offer in compromise. A compromise lets you settle the debt for less than you owe, but it’s usually only an option if other payment choices have been exhausted.

The IRS determines your eligibility by looking at your income, expenses, asset equity, and ability to pay. If the agency sees you can pay the amount in full, then the compromise won’t be accepted. Also, you must have filed all required tax returns, not be involved in any bankruptcy proceeding, and will have to make some of the required estimated tax payments.

Fresh Start and Other Avenues

The Fresh Start program is designed to help taxpayers afford back taxes and avoid consequences such as penalties and liens. Fresh Start is actually an update of pre-existing IRS programs that will help more people qualify for tax debt help.

The experienced experts at Geaux can help you navigate the choices and find the right fit for you.

What to Do Next

Receiving a letter from the IRS can be scary or downright frustrating. Contact Geaux Tax Resolution of Lafayette, LA for help now. Contact them at 337-420-1040 or the Mandeville, La., office at 985-722-1040 for more information to set up a consultation.