I Owe A Large Amount Of Overdue Federal Taxes-What Kinds Of Problems Will The IRS Cause To Collect Money?
If you fail to pay your federal taxes, then the IRS will take action to collect the debt that you owe. For example, the Internal Revenue Service will file a lien. A lien is defined as a legal claim that a person has on his or her property until the debt is paid in full. This lien will be listed on your credit report, which could cause your credit score to decrease drastically.
The Internal Revenue Service could collect money from your bank account and wages in order to pay off your tax debts. Your social security and retirement benefits could be garnished also. If you fail to make any payment arrangements, then the Internal Revenue Service may also seize your home, car or any other property that you have.
Furthermore, if you owe back taxes, then the Internal Revenue Service could prevent you from getting funds in the future. The money from your federal or state tax refunds could be used towards paying off your tax debts.
How Much Can Interest And Penalties Increase My Tax Debt?
If you do have unpaid tax debt, then the interest will continue to accrue until you pay off your tax debt. There could also be penalties for paying and filing your taxes late. If you pay your taxes late, then an additional 0.5 to 25 percent could be added to the total balance per month. An additional five to 25 percent could be added to the total balance per month if you file your taxes late.
Keep in mind that even if you are making partial payments, you could still be charged penalties and interest. Your total tax debt will continue to increase because of the compounded interest and penalties. Interest rates can vary greatly, but they typically range from four to seven percent.
That is why many people choose to take out a loan to cover their tax debt. The interest rates on loans are often lower than the interests and penalties that are imposed by the IRS Code.
What Will The IRS Do If I Cannot Pay?
Many people avoid the Internal Revenue Service because they are unable to pay. However, this is not something that you should do. The problem will not go away if you ignore it. It is only going to get worse if you do not do anything about it.
If you cannot pay, then you will need to contact the Internal Revenue Service. The Internal Revenue Service will ask for your financial information in order to verify that you are experiencing financial hardship. You will need to provide them with documentation that lists your monthly income and expenses. Make sure that you provide the Internal Revenue Service with your transportation costs, medical costs and housing costs. Additionally, if you have other expenses that do not recur on a monthly basis, such as car repairs, then you will need to provide the Internal Revenue Service with this information also.
If the Internal Revenue Service agrees that you cannot pay, then collection action may temporarily be suspended. However, the interest rates and penalties may continue to accrue. This will increase the total amount that you owe.
Keep in mind that there are other options available if you cannot pay your taxes in full. For example, you may be able to request an extension, which will give you more time to pay your taxes. You may also be able to apply for an installment or partial pay agreement. However, you will probably be charged a fee for the installment agreement. The penalties and interest will also continue to accrue if you pay in installments.
How Can A Lawyer Help Me Settle My IRS Problems?
You may think it is best to handle your tax problems on your own. However, it is very difficult to deal with tax problems on your own. In fact, you may actually make the problem worse if you do not seek professional help. That is why it is best to work with a tax attorney.
There are several ways that your lawyer could help you settle your tax problems. Your attorney can contact the Internal Revenue Service on your behalf. They could also help you negotiate a settlement. Your attorney can help you remove or reduce large amounts of federal tax debts.
Tax evasion is taken very seriously, and you could face criminal charges if you do not pay your taxes. However, a qualified attorney will do everything to make sure that you avoid criminal charges. Even if you are charged with a tax crime, your lawyer will be able to represent you in court.
Many big tax firms will charge people ridiculous amounts of money just to shuffle paperwork and file forms. However, our attorney will work hard to stop the collection efforts while clients are still in the negotiation process. Our lawyer will also tell people about a realistic course of action that they can take to reduce their debt. Unlike many other attorneys, he will not make exaggerated claims.
Our attorney understands the importance of making clients comfortable. He also treats every person like an individual. Every solution is personalized to an individual's situation. Furthermore, our attorney is very attentive to the needs of his clients. He provides them with options that are both realistic and reasonable.