Debt Relief Archives - Page 3 of 5 - Professional Tax Resolution

Category Archives: Debt Relief

3 Ways to Start Eliminating Your Tax Debt

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If you have a large IRS tax debt, the amount you owe can be daunting. To avoid being charged additional fees and making the debt larger, it is important to act and begin the tax settlement process quickly. Even if you cannot pay it off all at once, there are options you can pursue to eliminate your tax debt. Here are three methods that can help you to settle or eliminate your tax debts.

Offer in Compromise It is possible to reach a tax settlement with the IRS that is less than the full amount you owe. This plan is called an Offer in Compromise. Although filing an Offer in Compromise can be time consuming and complicated because the qualifications are very specific, this is a powerful option because it allows for the resolution of all your outstanding tax balances at the same time, plus the suspension of collection activities while your offer is being considered.

Installment Agreements An Installment Agreement is a payment plan that is negotiated with the IRS or a State Tax Agency. Instead of paying one lump sum, the taxpayer agrees to pay a tax debt over a specified period of time. The terms of an agreement will be contingent on the tax liability amount and the taxpayer’s current and projected financial status (income and assets).

Uncollectible Status If you do not have sufficient income or assets to pay your tax debt, you may be eligible for the temporary designation of Uncollectible. If you have been granted this status, all collection activity stops until your situation is reevaluated, and the IRS determines that you have the ability to pay your debt. This can give you more time to work on paying off your debt without accruing additional fees and penalties.

Since the IRS prefers to receive the full amount of tax debt that you owe, they may not give you the best advice when you are seeking to use one of the tax debt elimination options above. A licensed tax professional can negotiate with the IRS on your behalf and help you to get reach the best possible tax settlement based on your situation.

If you need help with an outstanding tax debt, our experienced tax settlement professionals can help. We can also work with you if you need help filing your taxes. Please visit professionaltaxresolution.com for more information on our tax resolution services. You may also call us at (877) 889-6527 or email info@protaxres.com to receive a free, no obligation consultation.

IRS Tax Debt – Cancellation of Debt – Mortgage Forgiveness Expires in 2012

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Tax Alert! The Mortgage Forgiveness Act is Set to Expire at the end of 2012

As many of you who have had a short sale or home forclosure know, under ordinary United States tax law, a short sale produces a tax liability. When a lender agrees to accept a short sale, the amount of mortgage debt forgiven is considered to be income for the borrower and is therefore subject to taxation by the IRS.

In 2007, the passage of the Mortgage Forgiveness Act served to protect homeowners from this potential tax burden. With the passage of the Mortgage Forgiveness Act, the amount of debt forgiven in a short sale was excluded from being a tax liability. Although this tax liability protection covers most short sales, it does have the following limitations:

• It applies only to the sale of a primary residence, not a second home or a rental property.
• It usually does not include home equity loans.
• The maximum amount of debt forgiveness is $1 million.

We often get calls from taxpayers who are very concerned about this type of liability. With our headquarters located in California, the home value crisis and the potential tax burden is top of mind. Because our CPAs know and understand the laws and regulations for recourse and nonrecourse loan structures, we have helped many clients remove liability for the gain that results from the short sale or foreclosure of a primary residence or from a bankruptcy filing.

Why the tax alert? The Mortgage Forgiveness Act will expire in 2012 unless Congress votes to extend it.

Already facing a short sale or forclosure? Call or contact us today to get your liability removed before it is too late.Click the “Learn More Link” or Call (877) 889-6527 to have one of our CPAs provide a Free, no obligation consultation.

States Offer Short Sale Assistance to Taxpayers

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When assisting clients with complicated tax settlements, taxpayers often find that the IRS and States have filed tax liens to protect their interests in back taxes owed. Tax liens can cause numerous problems, including damage to credit reports and also make the sale of property more difficult.

Many people, who are facing financial difficulties, are trying to sell their distressed homes for less than the loan balance in short sales. Often, during these transactions, there may not be enough value to pay the recorded state tax lien in full. This may delay, or even prevent, the sale of the home. (inboundrem.com) The State of California is one of many states that may be able to assist the taxpayer with a partial release of a tax lien.

A partial release of lien releases a specific piece of property from a recorded state tax lien, but does not release the lien in its entirety. The lien remains in effect against the taxpayer and continues to encumber other property the taxpayer owns or acquires in the future. The State of California estimates it can take up to 21 working days due to processing increased requests.

Clients seeking a resolution to complicated and large tax debts often face a variety of obstacles. The IRS and States, in recognition of the need to assist taxpayers, have begun to assist taxpayers in resolving these issues.  Complicated tax settlements require a tax professional that is aware of the various tax settlement options available from tax agencies.  Professional Tax Resolution can assist taxpayers in resolving even the most complicated tax settlements.

IRS Violates Taxpayers’ Tax Lien Rights Regarding Tax Debt

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Do you have unfiled taxes, or unpaid tax debt? If so, there’s a chance the IRS has, or will file a tax lien or wage garnishment for any uncollected tax debt. However, there are legal requirements the IRS must follow before doing so.

According to a new government report, nearly 33,000 taxpayers have been harmed due to the IRS not following legal requirements to notify them and their representatives of their rights related to tax liens in a timely manner.

The report was written by the Treasury Inspector General for Tax Administration. The TIGTA recommended that IRS officials ensure tax lien procedures are properly enforced and consistent with IRS procedures. Even though the IRS agreed with this recommendation, it doesn’t mean mistakes can’t still occur. If you are struggling with a tax lien or tax debt contact one of the licensed experts at Professional Tax Resolution to discover your options for tax settlements.

He Owed the IRS $80,000 in Back Taxes. We Reduced His Tax Debt to Zero!

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Steve H. came to Professional Tax Resolution after receiving notice of a wage garnishment from his largest customer.  Steve, a technology consultant, had failed to file tax returns for six years and, according to IRS calculations, owed over $80,000 in back taxes, penalties and interest.  Tax settlement plans for taxpayers with numerous un-filed tax returns always begin with gathering the records necessary to prepare the un-filed tax returns. In this case, the taxpayer was able to gather some information from banking records and some from customers for which he had provided services. Fortunately for this taxpayer, his wife had worked for several years and had had federal and state taxes deducted from her paycheck. We were able to obtain and verify additional tax information by obtaining IRS wage and income transcripts.

After gathering all possible relevant information, we were able to prepare all of the outstanding tax returns.  While balances were due in some years, refunds were owed in others. We were able to request that the IRS apply refunds owed to years where balances were due such that the net result was an outstanding tax liability of zero. It is never advisable to wait for a wage garnishment, tax lien or tax levy to resolve an outstanding tax issue. However, even when a tax issue seems practically unsolvable, there are tax resolution options available.  Professional Tax Resolution always looks at all available tax settlement options and provides a tax debt resolution plan for even the most complicated cases.