Thursday, 12 July 2012

Does Bankruptcy Erase Tax Debt

If you're struggling to make ends meet and dodging bill collectors, the last thing you want to worry about is a visit from the tax man looking for back taxes. Although bankruptcy can be used at times to discharge personal taxes, this tactic is not always completely effective. Other types of taxes beyond income taxes are exempt from discharge in bankruptcy, so a tax debt may not be wiped out by bankruptcy proceedings.

- Automatic Stay

Once an individual or corporate entity files for bankruptcy, the court issues an automatic stay of debt. This order temporarily prevents all creditors, including the Internal Revenue Service, from collecting debts during bankruptcy proceedings. The IRS may petition the court to lift the stay to collect back taxes, although it will generally need to prove the taxpayer engaged in fraudulent activity to remove the stay. During the time the automatic stay is in effect, the IRS will not be able to attempt to collect taxes, regardless of the type of tax debt owed.

- Requirements for Discharge

Back taxes aren't immediately erased when a taxpayer files bankruptcy. To qualify for discharge, the tax debt must be at least three years old at the time bankruptcy is filed, the taxpayer must have filed a return at least two years before filing and the taxpayer cannot have been shown to have made a willful attempt to evade taxes or defraud the IRS. Additionally, only income tax debts may be discharged by bankruptcy. Payroll taxes and fraud penalties may not be discharged by bankruptcy proceedings.

- Chapter 7

In Chapter 7 bankruptcy, an individual or corporation's assets are liquidated by a trustee and the proceeds are used to pay off creditors. If the IRS filed a tax lien against a taxpayer before the bankruptcy filing, the tax debt will not be discharged in filing. If the taxpayer emerges from Chapter 7 with property remaining, the lien is reduced to match the value of property. For example, if the IRS filed a $15,000 tax lien against a taxpayer, and the taxpayer emerges from Chapter 7 with $8,000 in assets, the lien amount is adjusted to $8,000.

- Chapter 13

Taxpayers who enter Chapter 13 bankruptcy renegotiate their debt amount with their creditors in the process. In these proceedings, debt amounts, including property taxes, are reduced as the court develops a payment plan to help a debtor emerge from bankruptcy. In these cases, if a judge decides the taxpayer only has the ability to pay $8,000 on $15,000 of back taxes, the amount will be adjusted as part of the payment plan developed as part of Chapter 13 filings. As with Chapter 7, tax liens aren't discharged by Chapter 13 protections.

- Chapter 11

Although it's rarely used by individuals and favored by corporations, taxpayers who file Chapter 11 receive a six-year grace period to repay tax debt. During this period, interest on the unpaid balance accrues.


Bankruptcy and Tax Debt

Taxes can be a tricky subject and many people simply ignore them most of the year and only pay attention come tax time. Although no one sets out to owe the IRS money, it does happen to many people. Tax debts are particularly difficult to manage, especially if you are experiencing financial trouble or are considering filing for bankruptcy.

While most people assume tax debts are not dischargeable in bankruptcy, the fact is that some are eligible for bankruptcy help. The general rule of thumb is that payroll taxes, trust fund taxes, tax penalty fees, and taxes that are accumulated due to fraud are not eligible for bankruptcy. However, income taxes can be managed in bankruptcy in most cases.

Qualification Standards

There are several rules and conditions that apply when considering whether a debt will qualify for bankruptcy discharge. The specific criteria set by the bankruptcy code defines which debts will be eligible. First, the taxes must be tied to a current and filed tax return. Any tax debts that have not been filed with the IRS will not qualify for discharge. The taxes must have been assessed by the IRS at least 240 days before the bankruptcy filing. Next, the debts must be at least three years old. Finally, the taxes must not be considered to be fraudulent or have any attempt to evade payment.

Bankruptcy Cases

While tax debts can be discharged under either a Chapter 7 or Chapter 13 case, a debtor's income will better determine which case they qualify to file. Whenever possible, debtor's are encouraged to repay their debts under structured payment plan through Chapter 13. However, if a debtor cannot afford to repay their total tax debt liability, they may be able to have some or all of the debts eliminated through Chapter 7.

Other Options

Managing tax debts outside of bankruptcy is highly encouraged. Luckily, the IRS offers taxpayers two ways to resolve their tax debts directly. The IRS installment plan allows for the taxpayer to repay their liabilities over a series of small increments. Generally, this plan breaks down payments over the course of two to three years. Requesting an installment plan is fairly simple and most people are pleasantly surprised to learn the IRS is willing to negotiate. A tax debt settlement option is also available for those who cannot afford to repay in full. An Offer In Compromise is a proposed settlement that is presented to the IRS, in which they agree to accept less than the full amount owed. This program is harder to come by and is generally reserved for those with serious financial hardships.

For more information please visit The Lee Law Firm aims to help local residents resolve their debt issues and achieve a financially healthy future. They provide high quality legal representation that helps lower monthly debt payments, stop wage garnishment, prevent foreclosures and repossessions, and stop calls from creditors. The Lee Law Firm bankruptcy lawyer in Fort Worth have many years of experience in all aspects of Chapter 7 and Chapter 13 Bankruptcy.

Wednesday, 11 July 2012

Does Bankruptcy Cover Tax Debt

Does Bankruptcy Cover Tax Debt ?

The Internal Revenue Service is the federal government's taxing authority. The IRS assesses, collects, monitors and audits every United States resident's federal income taxes. When Congress enacted the Bankruptcy Code, it made sure to protect the government by prohibiting debtors from getting rid of their income tax debt with some exceptions.

Bankruptcy Discharge

Bankruptcy discharges an individual's liability to repay debts. A Chapter 7 case usually results in a discharge without the debtor paying anything back; a Chapter 13 case requires repayment of some debts and partial repayment of others. The discharge applies only to unsecured debts, which are debts that are not backed by property. Credit cards and medical bills are unsecured debts. Some unsecured debts, however, are nondischargeable, including certain income taxes.

Nondischargeable Debts

Section 523 of the Bankruptcy Code lists a variety of debts that you cannot discharge. The list includes child support, alimony, student loans and most income taxes. In a Chapter 7 case, nondischargeable debts survive the bankruptcy and you must continue to repay them after the case is over. In a Chapter 13 case, you must pay most nondischargeable debts in full unless the court approves special arrangements.

Nondischargeable Income Taxes

If you owe the IRS for income taxes that the IRS assessed within the past three years, you cannot discharge the taxes. You also cannot discharge income taxes that the IRS assessed on a late-filed tax return. For example, if you filed your 2003 tax return in 2007, any taxes are nondischargeable, no matter when you file bankruptcy. Similarly, if you filed your 2006 tax return on time and the IRS assessed taxes in 2007, the taxes are nondischargeable through 2010. If you filed your 2006 tax return on time but the IRS did not assess taxes until 2009, the taxes are nondischargeable through 2012. A Chapter 7 discharge will not get rid of these taxes, and you must pay these taxes in full with interest in a Chapter 13.

Dischargeable Income Taxes

You can discharge certain federal income taxes. If the IRS assessed your taxes more than three years ago and you filed your tax return on time, you can discharge the taxes in Chapter 7 and you can treat the taxes as general unsecured debts in Chapter 13. For example, if you filed your 2001 tax return on time and the IRS assessed taxes in 2002, you can discharge those taxes in a 2011 bankruptcy.


Tax Debt Bankruptcy

Discharging Back Tax Debt In Bankruptcy

If you are filing for bankruptcy, and you owe the IRS back taxes, you may be eligible to have the tax debt discharged. Many people believe that a bankruptcy filing does not absolve the tax debt owed, and the IRS does not advertise this, but many IRS taxes, penalties and accrued interest do qualify for complete discharge in bankruptcy.

For those who do qualify, there are three general rules that must be met:

Rule 1: The tax liability must be three years old or older from the "due date" of the return, including extensions.

Rule 2: The tax returns themselves had to have been filed at least 24 months before the petition for bankruptcy date.

Rule 3: 240 days must pass from the date of assessment.

Not all people will qualify for this, and it is recommended that you seek the advice of a tax professional who can study your case and help determine if your IRS debt can be discharged. Not all bankruptcy attorneys understand whether the consumer's income tax liabilities qualify and this is where the advise of a tax expert is key. Expert representation can greatly improve your chances of having your IRS taxes, penalties and interest successfully discharged. In addition to this, Congress has enacted a new Consumer Bankruptcy law (in 2005) that included many changes. A tax expert will be up-to-date on these changes, some of which affect the ability to discharge income taxes.

Even if you do not qualify for a complete discharge of your IRS tax debt, there may be other viable options for reducing the tax obligation such as the IRS Offer in Compromise program or the IRS Installment Agreement.

The Offer in Compromise (OIC) program was established by Congress to help taxpayers get a fresh start, if they qualify. In qualifying cases, when the Offer in Compromise is accepted by the IRS, all federal tax liens can be released and the negotiated settlement amount is paid. It should be noted that the Offer in Compromise program is a privilege and is a very subjective process where the IRS has the final word. It can be a very long and complicated process too.

The IRS Installment Agreement is where the expert tax representation negotiates with the IRS a payment plan to pay back taxes. To qualify for such a plan, the consumer must have filed all tax returns, be willing to disclose assets owned including cash and bank accounts, must not have the capacity to borrow the amount owed to the IRS from other sources (a second mortgage on the home, for example), must not have adequate equity in a retirement account which can be borrowed or liquidated and must complete a personal financial statement.

For those consumers who are facing bankruptcy, or just struggling to pay off back tax debt, the IRS has provided some good options. For more information you can visit Seeking expert tax help is the best resource for finding which one works best for a consumer's situation.

Debt Settlement Income Tax

FAQ About Debt Settlement Taxation

New regulations about debt settlement taxation has triggered off several questions about debt settlement and income taxes. This article tries to cover the most important aspects of the same within its limited scope. Let us start off by explaining why settlement is taxable. This is because of the fact that once you go for settlement, you need to pay a certain amount of money to the creditor. This is the money that you save and it is considered as your income. Now, income being taxable, settlement becomes taxable. Hence, you need to pay taxes.

Question: Who informs the IRS about the settlement deal?

Answer: After the new regulations were implemented, the creditors are required to inform debt settlement deals to the IRS. The creditors issue 1099-C to the IRS which reports the details of the settlement deals taking place.

Question: What is 1099-C and what does IRS do with it?

Answer: 1099-C is the details of the debt settlement deals that the creditors agree to. It includes the information like customer name, forgiven debt etc. After IRS receives this from the creditor, it will forward the same to the debtor. The debtor will then have to account for the same in the IT return. If the debtor fails to do so, the IRS will file Federal Tax Lien and take steps against the debtor in form of penalties and interests.

Question: Can settlement taxation be avoided?

Answer: Yes, it can be avoided under various situations. In case the debtor can prove insolvency during settlement, it becomes non-taxable. The forgiven debt is non-taxable if the debtors indebtedness is due to any loss in a real property business or if the forgiveness was an outcome of a bankruptcy proceeding. Also, if the forgiveness is considered as a gift, the debt settlement taxation can be avoided.

Question: How to report insolvency to the IRS?

Answer: By filling the form 982: Reduction of Tax Attributes Due to Discharge of Indebtedness issued by IRS along with tax return. The debtor can also alternately attach a letter with the detailed calculation of the total debts and the total assets during settlement along with the tax return.

Question: Is there any specific amount of forgiven debt that is taxable or any amount forgiven is taxable?

Answer: If the forgiven debt amount is greater than $600, it becomes taxable!

For consumers with over $10k in unsecured debt, debt settlement can be a legitimate way to eliminate a significant amount of that. To find a legitimate company it would be wise to visit a free debt relief network. They will provide free help and point consumers in the right direction whether it is debt settlement or another option.

Tuesday, 10 July 2012

Debt Settlement and Tax Implications

If you are one of many Americans whose debt burden has grown unmanageable, you understand the tremendous stress that this situation causes. You know that in addition to weighing down your mind it is weighing down your credit score which is going to make credit issues even more difficult to resolve. Many debtors' situation becomes so grave they must file for bankruptcy or just give up and default on their bills, totally destroying their credit worthiness.

Rather than these options, that can affect credit ratings for years, you may consider some tactics that have gained considerable popularity amount those struggling to get out from under the load: consolidating debts or making debt settlement offers. The two options are extremely different and you must research them thoroughly to determine which would best suit your situation.

Advantages of Using Debt Settlement Options

When a debtor offers to settle a debt, they apply to the creditor to immediately forgive all or part of the debt in consideration of the fact that you are totally unable to repay any or all of it. If you could unload all or part of a debt, that might be the one little bit of help needed to get you by so you can make all your payments. You can start paying down other debts, and each month your debt load and monthly payments will become a little more manageable. That dark cloud hanging over you will start to lift.

Dangers of Debt Settlement

The debt settlement offer, if accepted by the creditor, is going to be noted in your credit history, and may impact the credit score. All credit bureaus will have the information which will be available to any organization that checks credit scores, which nowadays can include potential employers. It will also reduce your credit score for awhile, although not as severely as a bankruptcy or defaulting. You can eventually overcome the effect by handling your credit carefully.

Another consideration that you must carefully consider if going for the settlement option is the debt settlement tax implications. If your creditor forgives over a certain amount of debt (usually around $600) the Internal Revenue Service treats the entire amount forgiven as a form of income that you must report on your tax return. Depending on your total taxable income, you may incur an unpleasant tax liability on the debt amount forgiven. Depending on the amount of the debt and the amount of tax, the benefits may outweigh the costs; to know for sure you need to understand how your individual tax liability may change.

When researching your debt resolution options you may encounter companies that, for a fee, will handle your requests for compromise settlements to your creditors. These companies charge a fee, and the fees may be more than you can really afford for the amount of benefit you will receive. Be sure you understand the ramifications of your decisions before making your moves. Before any final decision about using the settlement strategy, you should investigate consolidating your debts.

For more information please visit Good luck!

Tax Debt Settlement

Each individual is evenly responsible for all interest, penalties and tax debt settlement when a joint tax return is filed for that particular year. Regardless if the couple is divorced and the divorce decree states that only one of them is liable for any taxes owed, the states or IRS has the legal right to go after both individuals or just one for the tax amount that is owed.

For tax debt settlement, the Innocent Spouse Relief was developed by the IRS as they realized that there may be certain situations that would be unreasonable to pursue both spouses accountable for the tax debt that was brought into existence. Typically, there are three forms of spouse relief that would enable one spouse not to be liable to pay the tax. Even if they end up not qualifying for one, they may be eligible for another.

# The first form is the original Innocent Spouse Relief:

This classic type is the newer version which has been divided up between this section and the other two. This particular form relieves a spouse's full responsibility for paying any of the understatement of taxes that are owed. However, they must meet certain basis to qualify.

# The next form is Separation of Liability:

This form of spouse relief allocates the tax between both individuals as if they filed separate tax returns. The amount is assigned established by the amount each is liable for.

# The third form is Equitable Relief:

This form of spouse relief was designed to protect individuals that perhaps don't qualify for the first two types of spouse relief but would still seem unfair to make them liable for the tax that is owed. Different than the other two forms, Equitable Relief enables a person to put into use if they have either underpaid tax or understated tax.

# Requirements for Requesting Innocent Spouse Relief:

First and foremost, it is extremely important to request innocent spouse relief correctly the first time around because if it is denied the likelihood of applying again for those years in question is unlikely to be accepted. The IRS has certain forms that are required and they strongly recommend that a letter explaining your situation in great detail accompanies those forms to make a more informed determination. The filing of IRS innocent spouse relief can take up much of your time and is monotonous, so do it right and be sure you can meet the requirements for one of the relief forms.

If you need some help with filing spouse relief forms, you can always seek the advice from an experienced tax relief attorney.

For more information like this and other related tax issues, visit website about IRS Tax Relief. They can prevent IRS bank & wage levies, prevent or lift tax liens, stop wage garnishment and will continually strive to get you the best possible settlement.

Monday, 9 July 2012

IRS Debt Tax Attorney

It may seem it's not necessary to hire an IRS tax attorney for your tax debt in the beginning; however it will not take very long to discover that professional guidance is absolutely essential. Whatever associated with the Internal Revenue Service and earlier due taxes can turn out to be extremely difficult immediately. In truth, there are plenty of folks that failed to succeed in an acceptable arrangement with the Internal Revenue Service simply because they failed to comprehend the principles, regulations, polices and processes.

An IRS debt tax attorney is aware of and comprehends the present Internal Revenue Service taxation guidelines. Yet sometimes over and above that, an attorney devoted to tax negotiations on terms remains present on taxation law alterations. This will be significant whenever attempting to handle the Internal Revenue Service.

There is certainly one more reason why you will need an IRS debt tax attorney any time submitting an Offer in Compromise. The bargain procedure is extremely long-drawn-out and also demands recurrent verbal exchanges with the Internal Revenue Service. Most taxpayers are working middle-class and are unable to go ahead and take necessary period of time off from their work to meet up with the IRS over and over again. On top of that, keeping up-to-date on laws and regulations with regard to taxation is really a career by itself.

When making use of tax attorneys, you can reconcile for a smaller amount. If you take advantage of an experienced tax attorney, you will have the ability to reconcile your circumstance for a lesser amount compared to what you could should you be representing your own self. A fantastic tax attorney may additionally be capable of getting rid of all the so-called penalties and charges that have been applied to you. In the event you have to deal with the IRS on your own, on the other hand, there is no doubt that they're going to mandate each and every cent, as well as all of the penalties and fees. And they will continue evaluating those charges and penalties just up until you compensate every tad.

You might not figure out how to make a deal with the IRS since the auditors tend to be daunting. As federal government representatives, they have perhaps an astonishing level of influence over both you and your finances, and these people are not reluctant to reap the benefits of that capability. An IRS representative does not possess that identical capability over a tax attorney, which means that a tax attorney can discuss in an infinitely more relaxed, logical, and indifferent way. Moreover, IRS agents do not possess any difficulty getting in touch with you frequently and authoring you correspondence. A tax attorney will take care of those telephone calls and correspondence for you, permitting you to manage the remainder of the matters you need to bother about.

You can visit for more information.

Tax Debt Attorney

Tax Debt Attorney For the Defaulters

Tax debt attorneys are like saviors for the defaulters and creditors. Those who have already hired one know how helpful they can be to deal with such liabilities. But those who are still looking for one should first understand the role that these lawyers play. These kinds of legal representatives help you to avoid a number of worst circumstances that may arise due to not paying of your levies on time. With such situations you can also land up in court processing. It is your attorney who can help you to get rid of the problems by rectifying the tax debt.

However, it is not only a tax debt attorney that you need; your legal representative must be experienced and have expertise in this field. Otherwise you may end up losing the court case. It is the duty of these lawyers to tell you about your rights and other benefits that you can enjoy.

There are several reasons that may lead to such liabilities. In most of the cases, people do not realize until they get official notice from the IRS (Internal Revenue Service). These types of liabilities are often created when one faces financial crises due to unemployment, losing jobs, alimony or divorce. Usually, they keep on accumulating and thus increase the burden of your debt. The IRS usually charges higher penalties that you have to pay apart from the accumulated taxes.

The primary task of such an attorney is to get some of your dues waived off. Though you will have to pay the dues, there are chances that IRS will offer a reduced amount. As a matter of fact, such heavy penalties are levied only to discourage the defaulters from continuing the practice. An expert legal representative will negotiate with the IRS official and will help you to get relief from this burden. They will also plan payment schedules that suit your budget. In addition, it is the responsibility of your lawyer to locate all those possibilities that may work in your favor during the IRS proceeding.

These days, you can conveniently find such lawyers online. There are many firms that offer this type of services. They also provide the area of their expertise according to which you can appoint them. Moreover, there are certain sites and legal directories that list the contact information of the tax debt attorneys. However, always remember to verify the credentials and expertise of the firms as well as of the lawyers before opting for one. Also, compare the services and fees of several different firms and go for one that offers the best deal.

For more information please visit that offers IRS tax help from highly qualified and experienced tax debt attorneys.

Help With Tax Debt

Suggestions and Tips For Tax Debt

Getting "out of debt" is a common norm advised by many financial advisors these days. Getting out of "tax debt" can be very difficult since you deal with the IRS, and not common lenders. The IRS has powers to "garnish" your wages and create "havoc" as far as your finances are concerned. Working out an effective plan to pay off your IRS tax debt ought to be a priority for any individual owning IRS taxes and dues. Many companies offer tax debt solutions and also provide free IRS tax help to help you deal with your tax payment.

Tips For Paying Off IRS Tax Debt
  • Do Not Try to Hide - Back taxes" occur when existing taxes are not redeemed in time, and eventually add on to the "back lot". IRS dues are not easily waived, so it's likely you'll be paying them eventually. It's difficult to avail IRS debt help. At times tax debtors think by "hiding" the back lot, it would be easier to cater paying current dues, since IRS might not be aware of previous dues. This is a misconception - the IRS maintains detailed records for each and every American citizen, and has total knowledge about any tax defaulter's background and outstanding tax dues. So the sooner you face the situation, and decide upon a plan to pay your dues, the quicker it is in finding a solution to solve the problem.
  • Ask for Help - Many companies and financial institutions specialize in tax debts, back taxes, and tax problems in general. These companies employ experts who know when to engage with the IRS, whom to contact, and how to arbitrate with the IRS. So if find it difficult to deal with the IRS on your own, it's advisable to seek professional help and work out a plan to settle your tax debt.
  • Offer a Compromise - The IRS offers waivers which can help to lower your net payable tax debt. Generally, waivers are given if the debtor has a confirmed financial problem and is not likely to redeem the taxes, even in the near future. If you can convince IRS it's going to be difficult and quite impossible to clear out the back taxes, the IRS officials will verify your earning potential and provide tax relief by waiving some or all back-taxes. In some cases tax debtors have also benefited from an elimination of back taxes as well as reductions in their existing payable taxes.
  • Work it Out - You can work out a payment plan with the IRS if you have a low paying job, or have financial commitments in the form of medical expenses, and you're unable to pay your tax dues "at a go". In such cases, you can avail facilities to pay your taxes in short term installments, or small lump sum payments over a period of time.
  • Call a Time Out - At times taxpayers don't qualify for payment plans to pay off their tax debt. If this happens, it's possible to request the IRS to put your file into "Currently not collectible" status. This indicates that the IRS won't take any further actions to collect your tax dues for some time, usually for a period of one year or less.
Many online companies offer tax debt help, and availing the facilities offered by them can greatly simplify your life. Majority of such companies also offer free consultations, and help you with many tax related issues such as free tax filing help to redeem your IRS dues. All you need to do is search for "free online tax help" on the net, and you'll end up with many companies offering the facilities. If you're sure about your IRS tax repayment plan, and you desire to get some advice related to any tax issues, it's recommended you search for "online IRS help line" and avail the help.

Sunday, 8 July 2012

IRS Tax Debt Settlement Help

Many people think that IRS debt settlement is a simple process that takes no time and effort. This is far from the case. Not only does it take time to decide if IRS debt settlement is right for you, it is a long process once you get moving. And remember, the IRS does not have to accept your offer to settle. They can easily reject your claim, which then puts you back at square one and looking for another payment option.

One of the first things you should know is that there is more than one type of IRS debt settlement. It is a common misconception that all IRS debt settlement plans are the same. There are quite a few ways that you can do this.

Here are several types of IRS debt settlement:

1. Office in compromise: This is a process in which you offer to pay the IRS less than what you owe. Have you ever heard a tax settlement company say that the can settle your debt for pennies on the dollar? An offer in compromise is what they are referring to.

2. Uncollectible status: The IRS can review your account and finances to determine that you are currently uncollectible. When this happens they will suspend the collection process. By combining this with the statute of limitations you may be able to avoid paying your entire debt.

3. Statute of limitations: From the date of assessment the IRS has 10 years to collect the money you owe. After this time goes by the IRS can no longer collect from you.

4. Penalty abatement: It is common for people who owe taxes to have a lot of money in penalties added to their already large debt. If you can prove that you cannot pay, you may be able to qualify for penalty abatement which will remove some or all of these charges.

If you are unsure of IRS debt settlement and which option(s) to take advantage of, speak with a tax professional. Need help with a tax settlement? You can visit to know what to look for in a tax settlement company. Find more information on how to settle and get help with your settlement from tax professionals.

IRS Tax Debt Help

Know the Steps to Get Out From Under Your Debt

Sound Familiar?

Matt is an average person who works hard to pay his bills and support his family. Last year he was laid off and was not able to pay the taxes he owed. Now, a year later, he knows that he owes back taxes with fees and penalties. He is not sure if he will ever be able to pay off his existing tax debt.

Choose the Right Help! If you're like Matt and have a large amount of tax debt waiting to be paid, it's time to find help. You need to get rid of your tax problems quickly. Make the right choice; the following information should make it easier for you to figure out what type of tax debt help you need.

1. Offer in Compromise

This IRS program allows taxpayers to compromise with them about how much you can pay them for the debt owed. It's a very long and tedious process and the qualifications are difficult to meet. However, if you meet the requirements, it can be a very rewarding program. Consult with a professional to see if you qualify, and always get a second opinion to make sure you're making the best decision for your case.

2. Installment Agreement

In this program, the IRS sets up monthly payments for you to pay off your existing debt. This is much like paying your credit card debt, except that the IRS gets to decide how much you pay per month. While you do have a bit of a say in how much you can afford, it is ultimately decided by the IRS and can be a heck of a lot more than you think it should be.

3. Penalty Abatement

When you have tax debt, the IRS immediately starts adding interest and penalties. This means that not only do you owe the original debt, but also the newer fees. However, you do have some recourse if you can give the IRS reason to believe it was impossible for you to pay everything that you owe. After filling out the required paperwork, you could potentially reduce your tax debt up to 30%, making it much easier to pay off the rest.

Help is On the Way! Regardless of your situation, there is help to fix your tax debt problems. Believe me; nothing is scarier for an IRS-Hitman than a tax professional that knows what he's doing. Get the right help today, and make sure that you don't have to spend the rest of your life worrying about your tax issue.

Now you have the smoking gun...Use it!

Please visit or for more information.

Saturday, 7 July 2012

Tax Debt Help

The internet has made it extremely easy to find tax debt help online from excellent specialists. Learn how to utilize the internet to get free consultations from a relevant specialist for your specific situation. Understand the normal process and know what you should expect.

One thing to note about getting tax debt help online is that the process really only starts online and will require you to talk with a specialist after it is figured out what your specific problem is and who would be able to help you best.

How To Find Tax Help Online

Most of the top tax help companies choose to advertise on top search engines such as Google, Yahoo! or MSN. You can easily find these companies by typing in either your specific debt problem, or simply entering tax debt help. You will find many companies who offer similar alternatives. Most companies will deal with all different tax debt problems, they will list the different solutions they will help with on the website.

Many of the websites will have a basic contact form that will allow the company to get general information about your current situation to be able to determine what tax specialist can help you best. After the form is filled out a specialist will contact you to walk you through your options. Other companies will offer a phone number that you can call and they will ask you for the same basic information that the contact form will ask, after telling them this information, they will have a specialist contact you based on your specific situation.

How To Get the Best Tax Debt Solution

Just about all of these companies will give you a free consultation on your situation and let you know what the best solution is that they can help you with. Keep in mind that whatever information they give you, you have no obligation to go with that information or take their offer. The smart thing to do is to request several free consultations and talk to a few specialists and compare different solutions. Take whatever solution you feel most comfortable with. Also, after getting advice from several specialists you can be confident that you are getting the best solution for yourself.

At they will match you with a tax specialist in your area based on your individual tax problem. They get you the best solution by having specialists compete for your business. The service is free, confidential and comes with no obligation. A short list of solutions are:
  • Reduce Tax Debt to a fraction of what is owed
  • Release a Levy or Garnishment
  • Stop a Property Seizure
  • Settle Payroll Taxes
  • Help with Installment Agreements
  • Offer In Compromise
  • Remove Penalties and Interest Charges
  • Remove Tax Liens

Income Tax Debt Help

Finding really good income tax debt help in these times of economic uncertainty is quite a challenge to say the least. But despite the inherent difficulties, there are people out there who manage to meander their way through the perilous roads of tax troubles. This article will give you an insight into how they do it, and hopefully after reading, you too will be able to replicate their success.

Here are the three most important variables that will ensure you get the best income tax debt help possible:

1. Online Vs Offline Sourcing

Where you find help is just as important as the help itself, and when it comes to sourcing, the best place to begin and end your search is the internet. Not only do you get to choose from a wider pool of tax specialists, you get the benefit of free initial consultations as well as huge discounts. During the initial consultation process, you'll be able to address all your questions and concerns before making any decisions. Online tax professionals tend to be more client focused and as such, you are more likely to get the sort of customer support that is essential when dealing with all things tax relief related.

2. Avoid Paying Large Upfront Fees

A sure sign that you could be headed for trouble when you start dealing with a tax firm is if they insist that you pay a lot of money upfront. Many people have fallen for empty promises, paid up huge sums, only to be let don by poor or non-existent results. The only thing it seems you can do to protect yourself it seems is to avoid engaging these types of firms all together.

3. Know Your Options & Keep The IRS Informed

Before you seek any sort of help, it is important that you take the time to do a bit of research into what options are available to you. The actual process of sorting it all out can be taken care of on your behalf, but knowing what option will be pursued is important. Another thing you should do is keep the IRS informed about your intentions regarding the debt amount owed.

Like I said in the beginning, there are lots of people out there who have applied the three basic principles above and had phenomenal success with solving their tax problems. All you have to do now is begin your search online for some credible income tax debt help, and apply what you have learned above.

How To Get Tax Relief Help

If you're frustrated and overwhelmed with the mountain of debt piling up, there is a solution. Please visit to get started.

Friday, 6 July 2012

Tax on Debt Forgiveness

Tax Consequences of Forgiving Debt

Before entering into any type of debt settlement or debt forgiveness program, you should be aware that you could be reliable for taxes on the forgiven amount. Today, an increasing number of people are finding themselves in debt that they are unable to pay down. A good number of these individuals look to debt forgiveness programs that cancel out some of their debt, without realizing the tax consequences. Debt cancellation or debt forgiveness is defined as borrowed money that the lender forgives or doesn't make you pay back in order to settle your loan. In many cases, the canceled amount of the loan becomes taxable income.

If you have debt cancelled in the amount of $600.00 or more on any account, the lender is required to report the amount to the IRS by filling out a 1099-C Cancellation of Debt form. You will also receive a copy of the form reporting your cancelled amount and will need to file it as earned income with your tax return for that calendar year.

There are certain situations where you will be exempt from claiming the forgiven amount as income. Individuals who have cancelled debt due to chapter 11 bankruptcy are exempt. They do not have to pay taxes on the forgiven amount.

If you had cancelled debt on a student loan you may also be exempt. Many times student loan debt is forgiven if the holder of the loan agrees to enter into certain types of employment. In these cases the forgiven debt is not taxed.

Farmers who have certain types of farm debt may also qualify for exclusion.

If you have a non-recourse loan that was settled, in other words a loan that was attached to a piece of property that could be repossessed, your debt settlement will also not be taxed.

Cancelled debt due to a home mortgage refinancing program or because of a home mortgage foreclosure may also be exempt in terms of taxable income. The Mortgage Forgiveness Debt Relief Act that congress passed in 2007 protects home owners in these situations.

If you have refinanced your primary residence and had debt forgiven or had to foreclose on your primary residence, you are exempt from paying taxes on the cancelled amount up to 2 million dollars.

The Mortgage Forgiveness Debt program does not apply to all property refinances and foreclosures. Exempt from the tax break are second homes, business properties and rental properties.

For more information you can go to, a debt management company that assists people who are having trouble with debt.

IRS Tax Debt Forgiveness

How to Apply for Debt Forgiveness to the IRS

IRS debt can be hard to get rid of. Generally, the government will do what is necessary to get its money eventually. According to the Internal Revenue Service website, the IRS may garnish your bank account or wages and even place a lien on your property for unpaid taxes. For those who truly cannot pay their debt due to financial circumstances, the IRS may defer or forgive your debt through an Offer in Compromise.

1. Fill out Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals). This form will help the IRS and you determine what resources you do or don't have to pay your debt. This is known as your Reasonable Collection Potential. Be sure to include any required attachments, including your last tax return and proof of expenses.

2. Fill out Form 656 (Offer in Compromise) to propose your offer to the IRS. According to the DR Sullivan & Company website, the amount you offer the IRS must be equal to your Reasonable Collection Potential, if not more. So, you cannot have your debt completely forgiven unless your Reasonable Collection Potential is $0.

3. Send both forms to the IRS and wait for a response to your offer. According to the DR Sullivan & Company website, your offer may be rejected if you submit an offer that is too close to a previously rejected offer, you are in bankruptcy, you are in default on past years' taxes, you can clearly pay more than you have offered and haven't informed the IRS of any special circumstances, or you send in your Offer in Compromise after you have been notified of the IRS' intentions to garnish your bank account or pay check.


- IRS: What Will Happen If You Don't File Your Past Due Return or Contact the IRS

- IRS: Form 433-A Collection Information Statement for Wage Earners and Self-Employed Individuals

Debt Forgiveness Tax Implications

The Tax Implications of Forgiven Credit Card Debt

Let's be honest, the economy is a nightmare. No one's job is safe, people are losing their homes, and relying on their credit cards to make ends meet. Credit card companies are feeling the pinch too, and are responding by settling delinquent accounts for a fraction of what is owed.

Why would they do this? Simple: collection activities cost credit card company's money. They have to pay the person calling you to nag about payments, they have to pay for all the letters and notices. And they may never recover all the money you owe. So, when a customer offers a lump sum payment to settle the entire debt, many companies are jumping at the chance. Moreover, whatever balance is not covered by the lump sum, the credit card company just forgives. Which is great for consumers... in the short-term.

Aside from the damage to your credit (though the delinquent payments certainly are not any better), there is a problem laying in wait for you next tax season. If your credit card company forgave your debt, the IRS calls that taxable income, reported to the IRS on a 1099-C. Oh yes, if you settle your $25,000 Visa bill for only $5,000, the "forgiven" twenty grand is now considered income. So, if you are taxed at 15%, your tax bill will increase by $3,000. The increased "income" can even bump you up into a higher tax bracket!

(It is important to note that if your debt is mortgage-related and is forgiven, this may NOT qualify as taxable income, thanks to the Mortgage Debt Forgiveness Act of 2007.)

You get your credit card debt handled, only to find a brand new tax debt waiting for you. What a trade off, eh? Of course there are some ways to get around this. A title 11 bankruptcy can relieve you of the tax debt. Or you can claim insolvency (i.e. your total debts are higher than the fair market value of your assets). Neither option sounds very appealing.

One would hope that the government would see this problem as a major issue, given the large numbers of people currently dealing with overwhelming credit card debts. However, to date, no legislation on par with the Mortgage Debt Forgiveness Act of 2007 has been introduced. And with the inherent inefficiency of Congress, any new legislation would likely be too late to help the millions of struggling Americans with debt today.

Thursday, 5 July 2012

Tax Debt Forgiveness

It is often said that owing money to the IRS is tantamount to owing money to the mob. And it's not hard to see when you consider how scary and unrelenting IRS tax officials can be. The hounding is enough to drive a sane person mad. Many people who suffer this relentless hounding do so in ignorance, because once you understand certain fundamentals of tax debt forgiveness, you can easily get the IRS off your back. This article will explore one such method of vanquishing the IRS beast. Read on...

What The IRS Won't Tell You

It is routine for the IRS to forgive a debt that it knows for a fact that it won't be able to collect. This is understandable since the cost of pursuing a potentially un-payable debt is not worth it. Naturally the IRS doesn't reveal this information too easily, and often people only find out this information after they've been through hell.

The key to getting such relief from the IRS is a matter of proof - undeniable proof. But this is the biggest problem that people face, since proving this requires understanding of complicated tax rules and endless form filling and submissions. This is where it is wise to seek professional help to sort out any issues you may have with the IRS. Which leads me to the second part of this article, the 'how'.

IRS Tax Relief Help: Where To Find It

Thanks to the internet, you can now access information at the speed of sound. In little or no time you can tap into an army of tax professionals who are just eager to help you solve your tax problems and vanquish the IRS beast. Many of these tax professionals boast strong credentials when it comes to going up against the IRS, so when you do choose, always go for a reputable one.

The cost savings associated with dealing with online professionals are also huge. Most won't charge you for an initial consultation and often will give you steep discounts on their services.

I hope you now see that what once seemed like a hopeless scenario is now completely salvageable. As mentioned above, the key to getting tax debt forgiveness, is forcing the IRS to classify your debt as un-payable. And getting this classification is completely achievable if you use the help of an online tax professional. I expect your tax troubles to be gone soon, so go on and make the best of this new found information.

How To Get Tax Relief Help

You can visit for reviews of the best tax relief companies that can help you eliminate your tax debt. All three companies provide FREE quotes, with absolutely no-obligation whatsoever.

Tax Debt Relief Help

If you're one of the many people out there who are currently in a dispute with the IRS (Internal Revenue Service), then you're probably looking for the best tax debt relief. You may need the help of a CPA or certified public accountant, enrolled agents or EA, and tax accountants/attorneys. With various remedies available, you would have to make a right choice.

Among these remedies are the Statute of Limitation Analysis, CDP (collection due to process), Currently Not Collectible, Injured Spouse Relief, Innocent Spouse Relief, and Offer in Compromise. It is no longer impossible to solve your IRS disputes with the help of professionals. You can turn to these remedies, whether you owe a small amount or even a large amount to the agency.

If you continue to ignore your dispute with the agency, it may lead to wages garnished, attached bank accounts, tax liens, and worse - having your properties confiscated. To reduce the impact of having huge tax debts, you should work out for an IRS tax resolution. It's hard to settle things by paying a smaller amount of what you really owe the agency but through Offer in Compromise, you may be able to do this.

If you want to get favorable results, you have to work closely with a professional. How much does you owe IRS? Well, if you can make a full payment, your problems can be easily resolved but what if you can't afford to do this? The answer can be Installment Agreement or other potential remedies that can suit your situation.

For taxpayers who qualify for Currently Not Collectible, you're in luck because the IRS will not bother you for a year, and you can also take advantage of the 10-year Statute of Limitations. This means that you have 10 years to settle your debts without IRS intervention. You're free to make payments if your situation permits.

Oftentimes, it's hard to pick an ideal tax debt relief solution. There are several professionals mentioned earlier who may be able to help you with your problem. Pick the right professional who you think is capable of securing a favorable response from the IRS.

You can visit to find out if you qualify for a tax debt settlement today.

Wednesday, 4 July 2012

State Tax Debt Relief

Property Tax Relief From State to State

Property tax, which is a tax on real estate and other forms of property, differs according to where you live and the laws that have been agreed upon by the state and municipality. If you would like to receive relief for your taxes, it helps to know your state's stand on them and read up on cases where property tax relief was granted in your area.

For example, Alabama has the lowest property tax rate at 1.3% of the total value of the assessed property. Meanwhile, Georgia, which isn't far away, has a rate of 2.6%, which is slightly larger than the national average of 2.3%. Moreover the state with the highest property tax rate till date is New Hampshire with 4.9%.

The states are investigating different ways to solve their local property tax delinquency problem, as well as what manner of tax relief would be beneficial to all. With the 2001 Economic Growth and Tax Relief Reconciliation Act, many states attempted to reduce the burden of the various taxes on their constituents, including property tax.

New Jersey's approach in 2004 was to mail tax relief checks to 1.3 million of its residents, particularly to homeowners who had an annual gross income below $100,000 and to those aged 65 and older. Similar to New Jersey's Fair and Immediate Relief Plan, Pennsylvania had the 2004 Homeowner Tax Relief Act, which used gaming as a means of covering the government's cost of tax relief. Meanwhile, California offered relief to residents with damaged property, including cars and other vehicles, such as boats and planes. for years have helped businesses and individuals Nationwide, with their delinquent IRS & State tax problems. The firm is based in Los Angeles, California USA. Please visit for more information.

Federal Tax Debt Relief

The rising tide of job losses and general malaise in the economy, means that more and more people will have to start thinking about federal tax debt relief. The good news is that if you take the right approach from the outset, your chances of getting some sort of relief is almost guaranteed. Read on here to see what options are available to you.

When it comes to tax relief, there are three main options available to you, all of which has to be secured through some sort of application or negotiation with the IRS. In no particular order, here are the 3 best options:

1. Monthly Payments

If you are able to repay any back taxes owing through some sort of monthly payment plan, this option is available to you, provided the IRS feels that it applies. Your success will depend on presenting a case for such a plan, so it helps to have a good knowledge of the procedures involved.

2. Offer In Compromise

This too is a good option and allows for the negotiation of a part-settlement of taxes owed. You must make the initial approach to the IRS, and demonstrated to them that the amount of your offer, is greater than the costs they'd incur in pursuing the full debt. Again this is tricky and requires some sort of specialist knowledge of presenting such a case.

3. Uncollectable Declaration

This is the holy grail of tax relief. This option allows for the complete cessation of any pursuit of back taxes owed. Naturally, the IRS will be resistant to this form of relief, but provided you can make a solid case, it is more than achievable.

Those are the three top options that most people owing taxes will pursue. Your success at either option will depend a lot on how your case is presented. If you try to do things on your own, you won't have much success. And that is a fact. Due to the complex nature of IRS procedures, most people employ an online tax professional to sort things out for them. These professionals are very easy to find, and offer a wide range of benefits, including free consultations and huge discounts. Discounts which you may not get if you utilize traditional sources for help with federal tax debt relief.

How To Get Tax Relief Help

Visit for reviews of the best tax relief companies that can help you eliminate your tax debt. All three companies provide free quotes, with absolutely no-obligation whatsoever. Having a specialist on your side can greatly reduce the stress, as they do all the negotiating and paperwork on your behalf.

Tuesday, 3 July 2012

Tax Debt Relief Companies

How To Choose The Best Tax Debt Relief Companies

When it comes to debts, there are some people you can afford to owe, and some people you simply cannot afford to owe. Many people have compared having a IRS tax debt to owing the Mob, and given the way they hound, harass and badger you, it's not a bad comparison at all. Luckily though there are a few good tax relief companies out there who can help you effectively deal with the IRS. This article will show you where to find them and what to look for when choosing one.

Where To Look For The Best Companies

Not too long ago, your only choice for finding the best tax relief companies was a flick through your local yellow pages. Today, thanks to the internet, all that has changed. In just a few mouse clicks, you can have before you hundreds of companies adequately equipped to help you deal with the IRS.

But there's an even greater reason to look online for a company is the fact that online companies are cheaper than offline ones. Once you find a bunch of companies online, the next step is to filter out the ones that are just not good enough and I'll cover that below.

How To Filter Out The Bad Companies

Choosing from among a group of tax relief companies will hinge heavily on 2 things:
  1. The first is the track record of the company. If a company has been operating as a tax specialist for less than 2 years then the advice is to avoid them.
  2. The second consideration is the fees policy of the company. Do they charge for initial consultations? Do they require an upfront commitment before they actually deliver any work? If you can answer yes to both these questions, then the company in question is a poor choice and should be avoided.

Provided you use both those filters when selecting from a batch of companies, you'll stand a good chance of making a sound decision. And the sounder then decision, the faster you'll be able to put your tax worries behind you.

As you can see from the outline above, getting help from the best tax relief companies is not hard. Use the information and put yourself on the road to being "tax debt free".

How to Find The Best Tax Relief Companies

Visit Tax Relief Company for reviews of the best tax relief companies that can help you eliminate your tax debt. All three companies provide FREE quotes, with absolutely no-obligation whatsoever. Having a specialist on your side can greatly reduce the stress, as they do all the negotiating and paperwork on your behalf.

If you're frustrated and overwhelmed with the mountain of tax debt you owe, there is a solution. You can visit to get started.

Income Tax Debt Relief

How Tax Relief Services Work to Eliminate Income Tax Debt

Individuals that run into tax related issues should consider hiring a professional service in most cases although many problems can be handled yourself. Knowing how tax debt relief services work can help you get started. This knowledge, coupled with what you already know, will surely put you on the right track.

Many tax resolutions firms have CPAs, accountants or CPAs, attorneys, Enrolled Agents or even former IRS agents with a lot of experience at resolving IRS tax problems. CPAs and Enrolled Agents are typically more reasonable than attorneys in terms of fees. Tax resolution firms typically charge a fee a retainer fee, which means you deposit money before services are rendered (not a good idea). Some don't require a retainer fee which means you don't pay unless the discussed or planned outcome never became a reality.

To start, a tax debt relief service will give you a free consultation. This is a big deal because it gives you the chance to get to know possible tax relief methods for your problem, how the services work and what the cost is. No matter what, keep in mind that you should receive a free consultation, because you want to be asking questions. If you have to pay just to speak with a tax debt relief service you are better off moving onto somebody else.

Once you choose a firm you will then be ready to get started. Since every tax debt relief service is different it is hard to say what step you will take next. Most of the time you will sign a power of attorney document that allow your tax professional to represent you. This is very important because it gives the firm the ability to speak to the IRS on your behalf. In other words, they can do all the hard work and you can sit back and avoid speaking directly with the IRS.

Make sure you stay involved during the debt relief process. You need to help your tax debt relief service in making decisions such as what method you want to pursue. It is never a good idea to let your professional totally decide what is right for you - you want to have some sort of say as to what is going on.

Once everything is in place and you are setup with the IRS the process is over. You are now in full compliance, or have a plan to full compliance.

If you would like to read more self-help comprehensive articles regarding your particular income tax debt problem please visit for a free tax consultation.

Monday, 2 July 2012

Tax Debt Relief Act

The Tax Debt Relief Act is technically termed the Mortgage Debt Relief Act of 2007. In short, if an individual owes someone else money, and the lender forgives or cancels the debt, the forgiven debt may be taxable. Under the Mortgage Debt Relief Act of 2007, taxpayers are able to exclude income from discharged debts occurring on their principal residence. For example, if a lender restructures a mortgage to make it more affordable to the homeowner, the amount of mortgage forgiven will qualify for this relief.

Debt Cancellation

Debt cancellation may include a variety of debts. Any loan in which an individual agrees to repay and fails to do so may be counted as income. If a borrower receives the money and does not pay it back, it is income rather than a loan, under federal law. Therefore, the government requires that these funds become income on taxes. The lender is required to report the amount of canceled debt to you and to the IRS using Form 1099-C, which is a Cancellation of Debt form.


In some situations, the debt cancellation is not taxable. A property that is a qualified principal residence will fall under the Mortgage Debt Relief Act of 2007 and therefore is not taxable. Bankruptcy and insolvency-included debts are not taxable. Some types of farm debt are not taxable such as those incurred through direct operation of the farm where the debt was more than half the income received in the prior three years. In addition, non-recourse loans are nontaxable. These types of loans are situations in which the lender's only option is to repossess the property securing the loan. This type of loan may have other tax consequences.

Debts Protected

The only types of debt protected under the Mortgage Forgiveness Debt Relief Act are debts incurred to buy, build or substantially improve the homeowner's principal residence. It also protects debts incurred during refinancing one of these types of loans, but only to the amount of the old debt. If unsecured debts or other debts are refinanced into the mortgage, and an individual defaults on the loan, the only protected debts will be the old mortgage balance that was refinanced.


A limit to the debt that may receive forgiveness under this Act is available. The maximum allowable debt cancellation of a qualified principal residence is $2 million, or $1 million if married and filing separately. Even though the debt does qualify for this exclusion, it must still be on report to the IRS through Form 982. Also, note that if a homeowner loses money on the foreclosure of his or her home, those funds may not be included as a loss when filing income taxes. Those losses are not tax deductible.

What to Do

Individuals who are likely to have to pay taxes on excluded debts will receive a Form 1099-C from the lender any time the debt forgiven is over $600. A tax preparer will need this to be included on income tax forms at the time of filing. Not reporting this income is a violation of IRS law.


IRS Tax Debt Relief

Do you like paying off your current tax obligation at a lower price? If that's the case, the far more you find out regarding IRS tax debt relief so much the better off you will definitely end up being. There are lots of types of IRS tax debt relief. A number of them are going to be in your sweet zone, others you simply will not actually qualify for - this really is why you ought to learn approximately what you are able to or hire an IRS tax lawyer.

Now, do you know the most typical ways of IRS tax debt relief? To get started on, an offer in compromise may be the choice that lots of taxpayers consider. This is the method where you personally offer the actual IRS a lower amount than what your debt is. Should they agree to, both sides win. You are able to compensate for your financial troubles as well as better your circumstances, and the IRS will get additional money compared to what they would get via a forced collection of funds. The primary problem with an offer in compromise is they are just approved ten to fifteen percent most of the time.

Using a partial payment installment arrangement you are going to pay the IRS the amount of money you owe on the specified time period. With this particular IRS tax debt relief technique you might be able to spend under the entire balance due; everything depends upon that which you consent on. Individual taxpayers who are not able to satisfy the individual settlement necessity with regard to a typical payment agreement in many cases be eligible for a partial payment plan.

Why don't you consider penalty abatement? This really is something which lots of people do not consider, but it is an everyday sort of tax debt relief. This has absolutely nothing related to the real debt you must pay back, but rather the actual fees and penalties you have accrued. With penalty abatement, a few or even all your fees and penalties are going to be removed which experts claim reduces the actual balance due.

It may be hard to choose which IRS tax debt relief technique is most effective. For this reason lots of people dealing with this particular scenario choose to employ a tax professional like a tax lawyer. Along with a specialist you are able to evaluate your choices: offer in compromise, partial payment installment agreement, and penalty abatement. With any luck, you get an IRS tax debt relief approach made just for you. You can visit for more information.

Sunday, 1 July 2012

Tax Debt Relief Scams

Beware Tax Debt Relief Scams

Tax relief scams involve convincing a taxpayer that there are shortcuts to either avoid payment of taxes or in receiving a higher tax refund. These scams have more than one victim. The first is the taxpayer, who once the scam is discovered, gets stuck repaying the money received in addition to penalties and fines. The second victim is the U.S. government, and the costs of the investigations get paid by the third victim, the U.S. taxpayers.

The Reparation Tax Credit

This scam is based on the unfulfilled promise that the United States made to all slaves who fought for independence alongside the colonial fighters, a promise of 40 acres and a mule for every soldier. The target group for this scam is, of course, the African-American descendants of those who fought in the war. The victim is told that Congress has passed a law granting a tax credit equal to the value of 40 acres and a mule to those descendants.

The scammer often will ask for a fee to fill out the proper paperwork and will guarantee as much as $10,000. Sometimes the IRS will actually cut the check and not catch the victim for as long as a year or more. When they are caught, they become responsible for the amount they were wrongly paid, plus all fines and penalties.

Tax Relief Scam MLM style

In the early part of 2000, a multilevel marketing company started turning the concept of a tax relief into its own MLM business. The way this scam worked is by appealing to the idea of keeping more of what we earn from going to the government. Anyone who has spent any amount of time in working a MLM business can attest to the fact that most participants end up losing money. The amount of the loss is then deducted from the adjusted gross income of the taxpayer, resulting in paying less taxes, or in a larger refund.

The victim is encouraged to begin a 'home-based' business (often ending up being the very MLM being pitched), so that everyday expenses for vacations, mileage and more can be deducted with a little creative tax preparation. Sadly, the victim ends up having these deductions disallowed and paying fines and penalties on top of the wrongly received refund amount back.

Tax Relief Scam for W-2 Earners

These same "experts" who created the MLM for the somewhat entrepreneurial-minded also created a relief scam for W-2 earners. They claim to be able to reduce the amount of taxes taken from paychecks "immediately." But what they do is fill out a W-4 form and increase the number of exemptions you are claiming. The more exemptions you claim during the year, the less money is taken out for taxes. Second, they check the box marked Advanced Earned Income Credit on the same form. (This will pay out a monthly portion of one's Earned Income Credit during the year instead of one lump sum at the end of the year.) This is something you can do yourself for free, yet they charge $200 for this "service."

What they don't tell you is that doing so will likely end up with you owing taxes at the end of the year. The only thing that really changes is the $200 fee from your pocket to theirs. You can then earn money by convincing others to pay this fee to you for doing the same thing.

Tax Debt Relief

Tax debt relief is a very different situation from other debt relief. There are settlements to be made, but they are directly with the Internal Revenue Service. Debt resolution companies cannot handle this type of relief.

Owning back taxes is a worrisome place to be financially, and reaching out for professional help is one of the best moves that can be made. There are accountants and law firms who specialize in this type of tax debt relief, and while many consumers opt to go it alone, having professional advice is a necessity. The IRS works in rigid ways, and to get a break from them requires patience and knowing the rules. Anyone who thinks that it will be easy is in for a sad surprise.

The IRS treats back taxes as a very serious matter, and it isn't one that will just go away on its own. They will assess penalties, fines, freeze bank accounts, garnish wages and even pursue a person in court. Everything they do and every move they make will be in writing, and because they are so slow, it gives the consumer time to get all their ducks in a row.

Traditionally, people feel that if they cooperate fully and provide more than enough information, they will get the best break. And, this is where professional guidance is important because it just isn't true. People panic when dealing with the IRS and provide them with more information than they ask for, and that generally leads to even more penalties rather than a settlement. It takes a wise professional, who is savvy about their tactics, to present hardship or other reasons for them to take less than is owed.

Most consumers just know what their problem is, but they don't have a clue about how to deal with it. Advisors are excellent for not only being the buffer between the consumer and the IRS, but for knowing the slippery ropes the IRS can sometimes provide. Tax attorneys know how to do the planning, the preparing and how to negotiation what is known as an offer in compromise. The way a consumer's situation is presented makes all the difference in how the IRS will perceive the situation.

Going up against the IRS can be a frightening experience, and they keep it that way for a reason. Do not go it alone when customized solutions can be found and employed!

For more information please visit, NationalRelief is one of the country's largest and most reputable debt resolution companies.