Resolve Your Back Taxes This Tax Season With the Help of a Tax Attorney or CPA

February 17, 2012 by  Filed under: Taxes 

Don’t let another year go by without resolving your back taxes. Consult an accountant, tax attorney, or other tax professional for help this tax season to start the coming year with a fresh slate.

Back tax issues don’t just happen to people trying to cheat the system. You might have made an error on your 1040 form, neglected to report a source of income you didn’t realize was important, or simply missed the deadline. Unfortunately, if you don’t resolve back taxes quickly, the penalties can really start piling up-and these penalties can have a devastating impact on your financial well-being. If you’re in danger of being crushed under snowballing tax debts, make this the year you break free. Contact an accountant or tax attorney to learn about your tax resolution options.

Offer in Compromise

If you owe more in back taxes than you’re feasibly able to pay based upon your current income and assets, a tax attorney or CPA can help you negotiate an offer in compromise. This settlement reduces the overall debt balance, making the payment threshold more attainable. In this situation, the Internal Revenue Service decides that it’s better to collect a portion of your debt than none at all. Keep in mind that in order to receive an offer in compromise, your tax attorney must be able to prove that paying back the full debt would constitute a hardship.

Penalty Abatement

One of the most frustrating things about back taxes is how quickly the total amount can balloon, thanks to interest rates and penalty fees. Your tax advocate can get some of these penalties lifted by proving that you’re suffering from extenuating circumstances that have made you unable to meet your tax requirements. These circumstances might include having experienced a death in the family, prolonged illness or unemployment, or a devastating natural disaster, such as a fire or flood. After penalty abatement, you will still owe the initial back tax amount plus interest, but you may no longer be subject to additional fees.

Installment Agreement

The larger your tax debt is, the less likely you are to be able to pay it back in one lump sum. That’s where an installment agreement comes in. Your CPA firm or tax resolution specialist can work with the IRS to develop a payment plan wherein you make smaller back tax payments over an extended period of time. This method of back tax resolution can help you avoid further penalties, as you’re showing good faith in paying what you owe.

Innocent Spouse Relief

If you and your spouse file a joint tax return, you’re both liable for back taxes accrued in that year-even if you later go on to separate or divorce. The IRS may even bring the entire debt and related penalties against one spouse if the other spouse is not responding to payment notices. Contact a tax lawyer if you’re in this situation. Your attorney will endeavor to prove that you’re not solely responsible for the tax debt, keeping you from paying for your spouse’s error or wrongdoing.

In each of these scenarios, the goal is to make it easier for you to pay back taxes-not to remove the tax debt entirely. You may still have a few tight years as you recover from tax penalties and back taxes. However, the longer you put off dealing with tax issues, the bigger the problem will become. Let this be the year that you resolve your tax debt situation. Take the first step by finding a tax attorney or accountant in your area to learn more about the tax resolution plan that might be right for you.

Penny Jones is a money management pro and a senior Internet marketing strategist with Prospect Genius, a leader in SEO advertising.

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