A professional tax specialist will help minimize any tax liabilities while helping to maximize a return. The emphasis put on deductions, retirement savings plans and tax credits are done efficiently to make your tax return the least negatively affected. Not being able to pay your taxes is one of the worst debts you can possibly create. Your tax specialist will advise you to work out a payment plan with the IRS. Preparing an Offer in Compromise may be the best advice you can get from your CPA.
Owing money to the IRS is a debt which will require payment. The only way it will go away is if the IRS decides to dismiss it. This will not happen by any bankruptcy or by neglecting to pay. The IRS is willing to work with people, especially in this time period of economic hardship. One of the best ways to work with the IRS is through their Offer in Compromise. This offer to the IRS will allow you to settle your tax debt for less than the full amount owed. This is a legitimate option when you cannot pay the full tax liability because of financial hardships. The IRS will concern itself with: your ability to pay, your current income, expenses and assets. Your best bet to getting any kind of assistance is to contact the IRS yourself. Use your tax specialist as a guide or reference.
Once again, tax debt is a topic heading to the Senate. Right now, the only public tax debt which will show up on your credit report is if the IRS places a tax lien against you. The report sent in to the Senate Finance Committee is one which will change the laws for tax debt reporting. Tax debt reported to the credit bureau will devastate credit scores for many.
Here is what the Government Accounting Office is in hopes to gain from changing this law.
* People will take the initiative to pay off back taxes.
* People will be less apt to fall into debt with the IRS knowing it will possibly affect their credit.
There are many more issues which will need to be worked out in order for this proposal to go any further. If Congress wants to change the laws, much study will go into what exactly can be reported and when.
* Which debts will be reported?
* Will there be a minimum due before it is reported?
* How do you authenticate the accuracy of the information reported by the credit bureau?
* Will reporting the tax debt guarantee collections?
The impact this new law could potentially have on Americans is abundant. Credit scores impact almost all credit possibilities, obtaining housing through purchasing or renting, and in some cases employment opportunities. Lenders, rental agencies and potential employers base decisions from credit reports. The Congress does understand this and these reasons have kept changes from going through in the past.
If you owe the IRS, now is a good time to start paying them back. This law change may be thrown out and reintroduced again. If and when it does go through, you will not want to have that hefty debt lying on your credit score. Tax specialists will professionally guide you towards the best direction to take concerning IRS debt. If you earn less than $100.000 annually, you may want to immediately start your Offer in Compromise to fit your financial situation.