When one is undergoing financial problems and above all a number of tax bills that are due, the first thing that crosses ones mind is how to settle back taxes. Burden of tax debt is a complicated issue. This is so because if one does not pay the past due tax bills the amount keeps on doubling with time. Moreover, more interest and penalties are added to it. In the end, the rights of the taxpayer are no longer protected because then the tax collectors start intruding into person’s bank accounts and seizing all the property he has in his name. As each and every move is interlinked with the previous one which makes these back tax debts a complicated one. Thus, there is a dire need to settle back taxes and get peace of mind.
In order to settle tax debt a proper channel is required, that is, a legal tax relief representative such as an experienced Enrolled Agent can do a fine job in corresponding and negotiating with the IRS, or any tax agency. As it is seen, for every problem one needs to discuss the matter openly. Both parties look at their positive and negative points for each alternative resolution. Then a modified tax resolution is formulated which would be acceptable to both parties. This is how to settle back taxes.
Whenever a tax problem occurs both parties are eager for a resolution. Thus, settlement of taxes is easy to come by if negotiation is properly conducted. Once tax bills have piled up the first thing a taxpayer should do is hire a licensed tax relief representative as power of attorney. In the time being, the IRS notifications that the taxpayer is receiving, should not be ignored. It is essential for the taxpayer to keep the IRS informed that he is ready for a reasonable settlement. Otherwise, the time period for settlement would elapse, and major actions will be taken by the IRS like seizing the taxpayer’s property, levying their paycheck and levying all bank accounts. Thus, one should keep this always in mind as to how to settle back taxes because there is always a lot of margin for the taxpayer if one wants to look at it. There are a number of ways to settle back taxes which are as follows:
- One way for settling IRS back taxes is to ask for a compromise, that is the original amount to be reduced to such which could be acceptable to both parties. The main objective of the taxpayer is to make the tax agency believe that a compromise is necessary otherwise his cost would be more than his savings so with compromised amount more can be paid.
- Another popular method is of installment agreement. In this a small amount is paid every month on tax, interest and penalty which eventually totals into more bigger the amount with interest but this method is more convenient for taxpayers so they prefer this method.
- A delay in payment can also be asked in how to settle back taxes. When the notifications are coming to the taxpayer he should respond by writing a letter or fax to the IRS and ask for extended time period for like 60 days. If more time is required the same procedure is followed.
Thus, the problem of back tax can be solved. An experienced Enrolled Agent tax relief professional is of great help during taxpayer representation and handling the settlement deal. Moreover, they can provide the taxpayer with better settlement than they could achieve on their own.
Mike Habib is a tax relief professional, an IRS licensed Enrolled Agent and represent taxpayers regarding back taxes in the following metro areas: Los Angeles, Pasadena, Glendale, Burbank, Orange County, Riverside, Palm Springs, San Bernardino, Palmdale, Bakersfield, New York, New Jersey, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, San Jose, Detroit, Jacksonville, Indianapolis, San Francisco, Columbus, Austin, Memphis, Fort Worth, Baltimore, Charlotte, El Paso, Boston, Seattle, Washington DC, Milwaukee, Denver, Louisville, Jefferson, Las Vegas, Reno, Hempstead, Tucson, Nashville, Davidson, Portland, Tucson, Albuquerque, Santa Fe, Anchorage, Atlanta, Long Beach, Fresno, Sacramento, Mesa, Kansas City, Cleveland, Virginia Beach, Omaha, Miami, Oakland, Tulsa, Honolulu, Minneapolis, Colorado Springs, Arlington, Wichita, Birmingham, Montgomery, Tampa