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What are my options for paying back tax debt? P.2

In our last post, we began discussing two common repayment options for taxpayers: installment agreements and offers in compromise. Like installment agreements, there are certain requirements that must be met for a taxpayer to qualify for an offer in compromise. As we’ve mentioned, the IRS will look at a taxpayer’s ability to pay the tax gate, his or her income, expenses, and the quality of his or her assets.

An offer in compromise can be paid either by a lump sum or as a periodic payment. If a lump sum, an initial payment of 20 percent of the total offer amount is supposed to be submitted. If the offer is accepted, the taxpayer is then required to pay the rest of the balance off in less than five payments.

Federal tax liens: how to avoid, satisfy and obtain relief from them

When a taxpayer is unable to pay his or her tax debt, one of the consequences is that the Internal Revenue Service will file a Notice of Tax Lien, a document notifying creditors that the federal government has a legal right to the taxpayer’s property to satisfy the debt. A federal tax lien can affect a taxpayer in a variety of ways, including limiting the taxpayer’s ability to obtain credit and impacting a taxpayer’s ownership interest in personal and business assets, even if the taxpayer files for bankruptcy.

Avoiding a lien is matter of filing and paying all taxes owed in a timely manner. Taxpayers who take advantage of repayment options like an offer in compromise or a repayment plan or installment agreement can avoid a lien if they abide by the terms of the agreement or plan. Getting rid of a federal tax lien is also a matter of fully paying off tax debt, but if this can’t be done immediately, there may be options for relief for certain taxpayers. 

What are my options for paying back tax debt? P.1

Paying back tax debt is not always an easy task, for either businesses or individuals. Whether the difficulty is because of tight finances, an unexpected tax bill, both or something else, taxpayers need to understand their options for getting right with the IRS.

Two common approaches to paying down tax debt are to negotiate an installment agreement with the IRS and to make an offer in compromise. Installment agreements allow a tax debtor to make monthly payments until the debt is fully paid off. The benefit of going this route is that it can reduce or eliminate a tax debtor’s payment of penalties or interest. As long as the debt is paid off, there is no fee for setting up such an agreement. 

3 reasons to talk to an attorney if you are facing tax problems

When people hear about someone facing tax problems, they often make some unflattering assumptions about that person. They might think he or she broke the law or is trying to cheat others or the system. These assumptions can make people feel embarrassed and ashamed to discuss tax-related issues should they arise. 

In reality, however, people from all walks of life can end up having to deal with the IRS and tax complications. After all, our tax code is incredibly complex and it changes constantly, which makes it all but impossible for the average person to navigate the system without issue. 

Identity theft and your taxes: Prevent yourself from becoming a victim.

2016 is shaping up to be a busy year for you and your family. Your responsibilities to your children, job and house never seem to lessen. Although autumn is just beginning, you know that Christmas and New Year's Day will arrive in a blink after Halloween. When those W-2s are delivered, you know that you should track down your deductions, organize your financial accounts and commit to filing as soon as possible. Unfortunately, you usually have the deductions dispersed throughout the house and your financial paperwork is a mess. You have until April to file your taxes, so why sweat the details in January?

While it can be stressful to file your taxes immediately after the winter holiday season, you will be protecting your family's assets with an early tax submission. If you have been reviewing our website, you know that identity theft can occur when thieves obtain social security numbers and use them to file tax returns early in the season. Another fraud identity thieves employ is to phone homeowners and claim to represent the IRS, threatening legal action if income taxes are not paid immediately.

Fans stream to help hip hop musician deal with back taxes

Having unpaid taxes isn't a situation that only affects one particular group of people. Old or young, wealthy or not, employed or unemployed, any person can wind up owing taxes to the IRS. Generally speaking, the solutions people are faced with are the same as well. Typically, people can work out a repayment plan with the government to repay taxes and get back in good standing.

However, there are some unique situations in which more creative solutions are a possibility in helping people deal with unpaid taxes. For instance, hip hop artist Nelly is facing a federal lien for taxes amounting to more than $2 million and he could be getting some much-needed help from a source the rest of us don't necessarily have access to: fans.

There is more to complying with tax laws than withholding wages

If you are an employer, you have an obligation to withhold certain taxes from the wages of your employees. Though there are exceptions, failure to do so could lead to audits and penalties from the IRS.

However, withholding taxes is only one part of meeting your obligations as an employer. You must also deposit and report those taxes to stay in compliance with federal tax laws. If you fail to complete any of these obligations when required, you could face incarceration and hefty fines.

File or trash: Documents to save in the case of an audit

If you have been following our blog on tax audits, you have learned why the IRS may require an in-depth tax review and what factors may lead to an audit. Although you file your tax returns in a timely manner and provide honest information on your tax return forms, you realize that declaring the validity of filed information will not suffice if you are audited in the future. So what information should you retain in order to defend yourself during a tax audit?

While it's not necessary to save every scrap of paper that details your salary, medical procedures and ATM activity, there are certain documents you will want to keep for the long term, file for immediate review and shred. If you organize your statements in this manner, you can be certain to have the necessary information on hand should you be required to prove your expenses.

Taking a gamble with the IRS? You could lose big

When you are filing your taxes, you are likely focused on reporting your income, itemizing your deductions and reporting any other money that comes in or goes out. However, it can be easy to forget some of these transactions, particularly when they were infrequent or seemingly insignificant events over the last year.

For instance, did you bet on The Kentucky Derby? Win big at the slots in Vegas? Lose a couple thousand dollars but then break even at the casinos? If so, these are all things that should be reported to the IRS. Failure to report gambling winnings and/or losses can lead to audits and potentially significant penalties.

What you should know if your job is part of the 'shared economy'

When people think about employment and paying taxes, they often think payroll taxes and other types of taxes deducted from a worker's salary by an employer. This would certainly be a pretty good representation for people who work a regular job for a traditional employer.

However, this is not necessarily the way people -- or the economy -- work anymore. Today, there are people all across Atlanta who take part in what some call the "sharing economy." And with the new jobs that have developed in this shared economy comes some new problems for employers and employees when it comes to estimating and paying taxes.

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