56% of Americans report that they are facing financial hardship due to rising prices and stagnating wages. If you’re not sure how you’re going to pay your taxes, or you have tax debt, you’re not alone. Reach out to a Louisiana tax resolution specialist to get the support you need. At Geaux, we offer various kinds of tax relief help, and we always tailor the solution to the individual’s financial situation.
Louisiana Tax Resolution: Can You Get Tax Relief in Case of Financial Hardship?
The IRS believes that everyone should be able to pay their taxes, so getting relief isn’t easy. However, there are several options for people who are facing serious financial hardship. The offer in compromise allows taxpayers to pay less than they owe, and currently not collectible status prevents the IRS from collecting any money until the taxpayer’s situation has improved.
To have your tax bill reduced, you must prove that paying the full amount would cause serious financial hardship and make it difficult for you to pay for your basic expenses. If this isn’t the case, you can still get help by setting up an installment agreement, so your payments are spread out over months or years. Your tax resolution specialist might also help you to explore other options like using zero-interest credit cards or getting the fees removed from your account.
An Offer in Compromise
People who believe that they can’t pay all their tax debt can make the IRS an offer in compromise. Less than 50% of these offers get accepted, so it’s important to make sure that all the criteria are met. Taxpayers might be eligible if their income is lower than in previous years, they have high expenses due to factors outside their control, and they don’t have any assets they can sell.
People who are in an open bankruptcy proceeding, have failed to file their taxes, or who haven’t made all the required estimated payments aren’t eligible. If you believe that an offer in compromise could be right for you, reach out to us at Geaux. We’ll review your situation to make sure you have a good chance of success, and then help you file all the paperwork correctly.
Currently Not Collectible Status
If you’ve lost your job, or you have no money to spare after paying for your basic living expenses, you might be a good candidate for currently not collectible status. This demonstrates to the IRS that you are in a difficult situation and that you can’t pay the outstanding amount at this time. You won’t face any collection activities, and your assets will be safe while you have CNC status.
However, this doesn’t mean that you won’t have to pay your taxes. Once your situation improves, the IRS will ask you to pay the full amount, plus the interest and penalties you’ve accrued while you were unable to pay. To get CNC status, you’ll have to file all past tax returns, complete several forms, and provide documentation that supports your claims.
An Installment Agreement
Most people aren’t eligible for an offer in compromise or currently not collectible status. These forgiveness programs are reserved for taxpayers who have lost their jobs or whose income is minimal. Everyone else must pay the full amount. However, there is a way to spread out the payments and avoid hefty fines and other collection activities.
Every taxpayer has the right to set up an installment agreement. If the outstanding amount is quite small, this can be done online or via a quick telephone call. If the person or business owes more than $50,000, or they aren’t able to pay within 72 months, they need to contact the IRS and provide financial information. In this case, contacting a Louisiana tax resolution specialist is essential.
There are several other solutions for people facing financial hardship. Getting the penalties removed from your account is one of the easiest and most effective tax relief help options. If you failed to file or pay on time, the IRS can charge you up to 25% of the outstanding amount, and they also apply interest to your account. Your tax resolution specialist will help you to contact the IRS and ask them to remove these charges.
This is easy if you’ve never had trouble with the IRS before or if there is a valid reason why you weren’t able to file or pay by the deadline. Another option is to take out a personal loan or use a credit card to pay off your tax debt. This is suitable for people who have a good credit score and are eligible for zero-interest or low-interest offers. Since the IRS charges interest on deferred payments, using other financing methods is cheaper for some taxpayers.
What Counts as Financial Hardship?
You might not be eligible for tax relief even if you’re struggling to pay all your bills. This is because the IRS has a very narrow definition of what constitutes financial hardship. If you have high expenses because you live in a large house, you drive a luxurious car, or you have an expensive hobby, it’s unlikely that you’ll get relief.
Only those who can’t afford a basic lifestyle are good candidates for an offer in compromise or currently not collectible status. As the price of household goods increases, the exact definition of “hardship” changes. Ask your tax resolution specialist how much the IRS currently allocates for housing and utilities, food and other necessities, transportation, and healthcare.
Do I Need Tax Relief Help?
Anyone who’s struggling to pay their tax bill could benefit from speaking to an expert. Because the laws and regulations related to taxes change frequently, it’s hard for individuals and small business owners to stay up to date.
A tax resolution specialist will go through your situation and determine which of the IRS’s forgiveness programs you’re eligible for. They will also speak to you about what led to your situation and how you can prevent future issues.
How to Find a Tax Resolution Specialist
The best way to find a tax expert is to search online. Browse companies’ websites to find out more about the employees and their backgrounds. Always choose someone who has several years of experience dealing with the IRS because they’ll be able to negotiate more effectively. The team leader at Geaux is a former IRS employee, so he is the best person to turn to if you have serious tax issues.
Good firms also provide important information online, so you can prepare for your appointment. Check the “Blog” and “Resources” sections of the website to find out more about your tax issue and the possible solutions. Then, reach out via the online contact form or give the firm a call. During the initial consultation, you can figure out whether the specialists are friendly, helpful, and knowledgeable, and whether you’d like to work with them long-term.
There are several solutions for people who are unable to pay their taxes due to financial hardship. Aside from using the IRS’s forgiveness program, individuals can get their penalties wiped from their account and use a personal loan or credit card to pay off the outstanding amount. Contact us at Geaux Tax Resolution to speak to a Louisiana tax resolution expert and find out what kind of tax relief help is available.