You may have every intention in filing and taking care of your taxes on time this year, but there always lies the possibility of running into an issue that may impede your ability from preventing complaints from the IRS. Even the smallest tax-paying error can have the longest-lasting ramifications on your finances, therefore, it’s encouraged that taxpayers do their research beforehand. We highlight some of the most common problems people come into contact with when tax season comes around.
Submitting Unfiled Taxes Past the Deadline
Out of all the mistakes, the most common is indubitable: not filing your taxes on time. When you have unfiled taxed, you place yourself in jeopardy of not only incurring expensive fines and penalties but also having to go to court. In fact, the IRS considers the failure of filing your taxes to be a form of tax evasion. You could face up to a year in jail and a fine of up to $10,000. Due to these harsh consequences, you should file your late returns as quickly as possible. Extensively, you must have them filed if you want to request a payment arrangement or installment agreement from the IRS. Once you file your returns, you will be considered to be in compliance with the IRS and no longer in jeopardy.
Inability to Pay
Maybe you’ve placed a hold on paying your taxes because you cannot pay what you owe. Rather than avoid filing your returns out of the fear of a heavy tax burden, you should consult with a tax professional about the payment options that the IRS makes available for people with significant tax debts.
You may eligible for any number of payment or settlement methods such as:
- IRS Fresh Start Program
- Installment Agreement
- OIC (Offer in Compromise)
- CNC (Currently Not Collectible status)
These options allow you to pay or extend your debt and protect your finances. Before you choose which option best suits your needs, it is advised that you consult with a tax professional who can advise you further on each one. A professional tax filer can also help you complete and submit the proper documentation for each solution.
Penalties and Interest Charges
When the IRS chargers penalties and interest, you are endowed to pay even more money to settle your account. These additional charges only add to the burden and lengthen the time that it takes to pay what you owe to the government.
The solution to recurring penalties and interest charges is to ask for a penalty abatement from the IRS. It is possible to make this request on your own. However, when you want for a penalty abatement to be decided in your favor, it is advised that you seek the services of a tax professional to ask for the abatement on your behalf.
In order to be granted this exemption, your tax case must meet three requirements that include reasonable cause, administrative waiver, or an IRS error. Your tax filer can ensure that your case meets at least one of the criteria before filing the request for you.
Garnishment and Levies
The IRS notifies you with more than enough time to pay what you owe or work out a payment arrangement with the government. When you fail to take the opportunity or if you do not comply with the agreement that you set up with IRS, you could have your income garnished and a lien placed on your assets. A wage garnishment is when a court issues an order requiring your employer to withhold a certain amount or percentage of your paycheck and have it sent to the institution that you may be indebted to. This usually calls for 25%, but the IRS is equipped to take more, leaving you with only enough to support you and your family each month.
If you are already being garnished or levied, your solution would be to file a lien/levy or garnishment release. Filing this should be done in conjunction with a tax professional who knows how to submit this request in an accurate and timely manner. In order to be released from wage garnishments, you are entitled to prove that your current collection efforts cause financial hardship to you and your household. A professional tax accountant can negotiate the terms of the release and work our another payment method that protects your finances and works to your advantage.
Prevent Tax Mishaps With the Help of a Professional Today!
R&R Tax Services is here to ensure that the occasional taxpayer mistake doesn’t take a toll on your money and earnings. Contact us today to have us file and submit your taxes accurately and on time.