Am I Eligible for Innocent Spouse Relief?
Tax liabilities can create undue burdens, especially when you are not at fault.
In cases where a spouse or former spouse is responsible for inaccurate reporting or fraudulent activities, innocent taxpayers may find themselves held accountable for unpaid taxes. However, the IRS offers a potential solution known as Innocent Spouse Relief.
What is Innocent Spouse Relief?
Innocent Spouse Relief is a special rule the IRS uses to help taxpayers who filed joint tax returns, but shouldn't be held responsible for any mistakes or problems on those returns. It's a way for innocent spouses to be exempt from the taxes, interest, and penalties that were caused by their spouse or ex-spouse’s mistakes.
Eligibility Criteria
If you want to qualify for Innocent Spouse Relief, you’ll have to meet certain criteria:
Filing Status: If you want to qualify for Innocent Spouse Relief, you’ll need to have filed a joint tax return with your spouse or ex-spouse. The reported amount on that joint return should have been lower than what it should have actually been.
Lack of Knowledge: When you signed your joint return, you should not have known about the tax understatement. You didn't have any awareness that the tax amount reported was inaccurate.
Unfair Burden: It would be unfair to expect you to be held responsible for the tax understatement, especially when you consider the specific circumstances and how assets and liabilities were divided between you and your spouse or ex-spouse.
The Three Types of Innocent Spouse Relief
The IRS offers three types of Innocent Spouse Relief:
Traditional Innocent Spouse Relief: This relief applies when you can demonstrate that you had no knowledge or reason to know about the understatement of tax on the joint return.
Separation of Liability Relief: With this relief option, your tax understatement would be allocated between you and your spouse (or former spouse). It is based on your individual contributions to the income, deductions, and credits on the joint return.
Equitable Relief: If you don't meet the requirements for the relief options above, you might still qualify for Equitable Relief. Equitable Relief is a special consideration that’s used in situations where it would be unfair to hold you responsible for the tax understatement. The IRS considers different factors and circumstances to decide if you are eligible for Equitable Relief.
How Do I Get Innocent Spouse Relief?
If you want to apply for Innocent Spouse Relief, you need to submit an IRS Form 8857. This form is called the Request for Innocent Spouse Relief. You’d also need to give supporting documentation that substantiates your claim. You should provide a detailed explanation of why you believe you qualify for relief.
Navigating Innocent Spouse Relief is difficult. That’s why if you consult with a qualified tax professional who specializes in Innocent Spouse Relief, you can significantly improve your chances of getting a successful claim. A professional can guide you through the process, assist with gathering necessary documentation, and make sure your rights are protected…
A professional like Ben Butterfield.
Ben Butterfield, CEO and founder of BPB Tax Resolutions, is an accomplished tax professional who specializes in tax services like Innocent Spouse Relief.
With over 25 years of experience in accounting and finance, Ben is a trusted expert in helping you with your IRS problems.
He’ll guide you through the eligibility evaluation for Innocent Spouse Relief and find the best solution to your situation.
Don't let your tax issues hold you back. Book your risk-free consultation now!
Facing IRS Wage Garnishment? Here's How to Stop It and Regain Control
When the IRS takes part of your hard-earned wages, it can leave you feeling overwhelmed and financially strained. But, it's crucial to remember that you have options and solutions to stop IRS wage garnishment and regain control of your finances.
If you’re facing IRS wage garnishment, our goal is to provide you with the knowledge and guidance you’ll need to face this challenging situation. Let’s dive into the specifics of IRS wage garnishment, understand why it occurs, and, most importantly, explore effective strategies to put an end to it.
Understanding IRS Wage Garnishment
IRS wage garnishment is a legal action the IRS takes to collect people’s unpaid taxes. The IRS doesn’t need a court order to garnish wages.
The IRS will send you notices if they intend to garnish your wages. These notices will include a Final Notice of Intent to Levy, which informs you that they intend to garnish. If you don’t respond or take action within a certain timeframe, they will garnish your wages.
The Impact of IRS Wage Garnishment
Wage garnishment directly affects your take-home pay. This can make it harder to maintain a comfortable standard of living or even cover basic expenses.
IRS wage garnishment can also hurt your credit score. It will be harder for you to secure loans or get good interest rates in the future.
Wage garnishment can also strain your relationships and cause stress. Plus, it can damage your professional reputation if your colleagues become aware of the garnishment.
How to Stop IRS Wage Garnishment
Stopping IRS wage garnishment requires proactive steps and effective strategies. Here are essential actions you can take:
Respond to IRS Notices: It is crucial to respond promptly to all IRS notices related to wage garnishment. Ignoring the notices will only escalate the situation. You can contact the IRS and ask for a collection due process hearing where you may be able to discuss your case.
Explore Payment Options: The IRS offers payment options to resolve your tax debt. This could be an installment agreement, where you would pay off the debt over time. Another payment option is an offer in compromise, which lets you settle your debt for less than the full amount you owe.
Request a Hardship Exemption: If your wage garnishment causes a serious financial hardship, you could qualify for a hardship exemption. A hardship exemption can temporarily suspend your garnishment or reduce the amount taken out of your pay.
Resolve Tax Disputes: If you think there is an error in the amount you owe, it's crucial to address the issue promptly. Disputing the tax assessment through the appropriate channels can stop the wage garnishment until the dispute is resolved.
Seek Professional Assistance: Navigating tax debt on your own is often overwhelming and complicated. That’s why you should consider hiring a reputable tax professional. They will guide you through the process, represent your interests, and negotiate with the IRS on your behalf. A tax professional won’t just take the weight of IRS negotiations off your shoulder; they’ll get the best outcome possible, saving you time and money.
The BPB Tax Resolutions Difference…
Hiring a tax professional is key to stopping IRS wage garnishment and taking control of your financial future.
Ben Butterfield's expertise, coupled with his track record of successful negotiations with the IRS, sets him apart as a trusted advisor with resolving wage garnishment issues.
His in-depth knowledge helps him to navigate complex tax situations and explore every available option to find the best resolution for your unique circumstances.
When you partner with BPB Tax Resolutions, you gain a trusted ally who will fight for your rights. BPB Tax Resolutions will negotiate with the IRS on your behalf, and explore all available options to find the best resolution for your unique circumstances.
Don't let the stress of wage garnishment control your life. Contact BPB Tax Resolutions today for a risk-free consultation, and regain control of your financial future!
Am I Eligible for an Offer in Compromise?
Tax debts can be overwhelming, leaving you desperate for solutions. An Offer in Compromise (OIC) offers hope for resolving your tax issues.
In this article, we will explore the details of an OIC, its eligibility criteria, and the benefits it provides. You’ll gain a clear understanding of this tax resolution option and learn whether you qualify.
What is an Offer in Compromise?
An Offer in Compromise offers hope for people who find themselves drowning in tax liabilities.
It’s an agreement between a taxpayer and the IRS that lets you settle tax debt for less than the full amount owed. An OIC is a potential lifeline for people facing financial hardships, giving them an opportunity to regain control of their financial future.
By demonstrating an inability to pay the full amount or raising legitimate doubts about the accuracy of the tax liability, you may qualify for this resolution option.
Am I Eligible?
To determine eligibility for an Offer in Compromise, several factors are considered:
Ability to Pay:
The IRS assesses your financial situation (income, expenses, assets, and future earning potential) to determine your ability to pay the full tax debt.
If it’s clear that paying the entire amount would create substantial financial hardship for you, you may be eligible for an Offer in Compromise.
Doubt as to Liability:
If you genuinely dispute the amount of tax owed, you can qualify for an Offer in Compromise based on doubt as to liability. This means that you believe the IRS has incorrectly assessed your tax liability, and you have evidence to support your claim.
Doubt as to Collectibility:
When the IRS believes that collecting the full amount owed from you is unlikely or would cause financial hardship, they may consider an Offer in Compromise to expedite the resolution. If it can be demonstrated that collecting the full debt is not feasible, you may qualify for this option.
Effective Tax Administration:
In exceptional cases, even if you can afford to pay the full amount, circumstances such as severe health issues or extraordinary financial hardship can warrant an Offer in Compromise. The IRS considers factors beyond your financial situation to assess whether an OIC is necessary to ensure effective tax administration.
Taking the Next Step…
Navigating an Offer in Compromise successfully requires professional assistance. BPB Tax Resolutions specializes in tax resolution services, providing expertise tailored to your needs. Book a risk-free consultation to:
- Review your situation and assess eligibility
- Receive personalized guidance and advice
- Develop a strategy to resolve your tax debt
Take the first step towards financial freedom and contact Ben Butterfield with BPB Tax Resolutions!
With over 25 years of business experience in accounting and finance, Ben is a leading expert in solving individual and small business IRS problems. He will guide you through the eligibility evaluation and help you find the best solution to your tax debt.
Don't let the weight of tax burdens hold you back. Discover the relief an Offer in Compromise will bring to your life.
Book your risk-free consultation with BPB Tax Resolutions today!
Tax Debt Settlement: Why Should I Hire a Professional for Assistance?
Dealing with tax debt can be an overwhelming experience.
Navigating the tax system and dealing with the pressures of outstanding tax liabilities, can leave you feeling lost and uncertain. While you might be tempted to handle tax debt settlement on your own, it’s not as good of an idea as you think.
Entrusting your tax debt settlement to experts will make a massive difference in achieving a successful resolution.
Understanding Tax Debt Settlement
Tax debt settlement is the process of negotiating with the IRS to resolve outstanding tax liabilities. It involves working towards an agreement that lets you pay off your debts under modified terms. While tax debt settlement can take various forms, the most common approaches include an Offer in Compromise (OIC), installment agreements, and penalty abatements.
So, why should you trust a professional with your tax debt settlement?
Why Should I Hire a Professional for Tax Debt Settlement?
Expert Knowledge and Experience:
Navigating tax debt settlement requires in-depth knowledge of tax laws, IRS guidelines, and negotiation strategies.
Tax resolution experts have the expertise and experience to handle your unique case. They analyze your unique financial situation, evaluate available settlement options, and create a personalized strategy that fits your needs. Tax resolution professionals also understand the complexities of your unique situation, and they can help you make the best, most informed decisions throughout the process.
Maximizing Settlement Opportunities:
Tax professionals have the skills to assess your eligibility for different settlement programs and determine the best approach for your specific circumstances.
They know how to gather and present the necessary documentation, formulate compelling arguments, and negotiate with the IRS on your behalf. With their guidance, you will maximize your chances of securing the most favorable settlement outcome.
Mitigating Errors and Penalties:
The IRS is meticulous when reviewing tax debt settlement proposals. Even a small mistake or oversight can lead to rejection or delays in the resolution process…
By working with tax professionals, you will minimize the risk of errors, ensuring that all required information and documentation are accurate, complete, and submitted on time. This attention to detail reduces the likelihood of penalties and streamlines the settlement process.
Handling Communication with the IRS:
Engaging in negotiations with the IRS can be intimidating and overwhelming. Tax professionals act as your advocate, handling all communication with the IRS on your behalf. They understand the language and protocols used by the IRS, effectively presenting your case and addressing any concerns or inquiries. Having an experienced representative by your side relieves the burden of interacting directly with the IRS, allowing you to focus on your financial well-being.
The BPB Tax Resolutions Difference
Ben Butterfield, founder of BPB Tax Resolutions, specializes in providing comprehensive tax resolution services to individuals and small businesses burdened by tax debt. He understands the complexities of the tax system and possesses the expertise necessary to guide you through the settlement process.
With his personalized approach, Ben will be your advocate for dealing with the IRS.
Don’t face the IRS on your own.
Book a risk-free consultation with Ben Butterfield at BPB Tax Resolutions today!
Everything You Need to Know About Filing your 2022 Taxes
Filing taxes can be a daunting task for many individuals, but it is a necessary part of managing your personal finances. In this article, we will cover everything you need to know about filing taxes for 2022.
Know Your Filing Status
Your filing status is an important consideration when filing taxes. There are five filing statuses: single, married filing jointly, married filing separately, head of household, and qualifying widow(er) with dependent child. Each status has different tax brackets and deduction limits. Choose the status that best reflects your situation.
Gather Your Documents
Before you start filing taxes, you will need to gather all the necessary documents. These include your W-2, 1099s, and any other income or tax statements. If you have any deductions, make sure you have the relevant receipts and documentation for every deduction.
Understand Tax Deductions and Credits
Tax deductions and credits can help reduce the amount of taxes you owe. Deductions are expenses that reduce your taxable income, while credits directly reduce the amount of taxes you owe. For the everyday American, some common deductions include mortgage interest, charitable donations, and student loan interest.Although, most taxpayers will be take the “standard” deduction. Common tax credits include the earned income tax credit and child tax credit.
Choose the Right Tax Preparation Method
There are several ways to prepare and file your taxes. You can use a tax preparation software, hire a tax professional, or file by paper. The method you should go with depends on your situation. For the most accurate and best result, we always recommend hiring a tax professional that can ensure everything is filed correctly. If you owe back taxes from other years, then we highly recommend hiring a tax resolution specialist to look into your case to ensure you the IRS does not garnish your wages or put a tax levy on your assets.
File on Time
The tax filing deadline for 2022 is April 18, 2023. Make sure you file your taxes on time to avoid penalties and interest. If you are unable to file by the deadline, you can request an extension. But, remember an extension only relates to filing of the return. If you owe for 2022, and you file an extension, what you owe must be paid in with the extension to avoid failure to pay penalties.
Pay Any Taxes Owed
If you owe taxes, make sure you pay them on time. The IRS offers several payment options, including online payment plans, direct debit, check or money order. Failure to pay taxes owed can result in penalties, interest charges, and worse case scenario, tax liens and gransihments.
Keep a Copy of Your Tax Return
Make sure to keep a copy of your tax return for your records. You may need it for future reference or to apply for loans or financial aid.
What to Do If You Owe Back Taxes
If you owe back taxes, the most important thing you can do is take action. Ignoring your tax debt will only make the situation worse, as the IRS will continue to assess penalties and interest on the amount owed. Contact a tax resolution specialist to look over your case, and let them guide you through the process to ensure you don’t jeopardize your financial future.
Our firm specializes in tax resolution. We have CPAs, EAs and attorneys who can represent you before the IRS. We serve clients virtually so don’t hesitate to reach out. If you want an expert tax resolution specialist who knows the “ins and outs’ and knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.
In conclusion, filing taxes can be overwhelming, but it doesn't have to be. By understanding your filing status, gathering necessary documents, taking advantage of deductions and credits, filing on time, paying any taxes owed, and keeping a copy of your tax return, you can ensure a successful tax filing experience in 2023.
What is Tax Resolution & How Can It Help You During the 2023 Tax Season?
Tax season can be an unpleasant time of year for a lot of taxpayers, especially if you owe money to the IRS or State. The one thing you can do is, be proactive, prepared, and engage a tax resolution specialist to help guide you.
If you owe back taxes to the IRS, then read every word in this article very carefully because what you do next can impact your financial stability and peace of mind. Today I am going to share with you what tax resolution is and how it can help you.
Before we jump into it, if you have a back tax debt or years of unfiled tax returns, contact our firm for a consultation. We always recommend that you do not talk to the IRS without representation as, many times, it makes your situation worse.
The IRS can be an intimidating agency to speak with and will do everything in their power to collect what is owed to them. Connect with one of our tax resolution specialists for a no-obligation consultation so we can review your case and guide you to the best option for your specific situation. You won’t have to talk to the IRS and our firm can provide the peace of mind you need to resolve your tax issue.
What is Tax Resolution?
Tax resolution, also known as IRS Representation, or Tax Controversy, is
the process of resolving back tax issues with the IRS or state tax authorities. It generally involves negotiating a payment plan or a settlement agreement for less than you owe. Many times, for a lot less if you’re eligible.
There are several options available for resolving taxes owed including:
Payment Plan - A payment plan is an installment agreement that allows you to pay off your tax debt over time until the debt is paid in full.
Partial Pay Payment Plan - A “PPIA” is an installment agreement that allows you to pay off your tax debt for less than the full amount.
Offer in Compromise - An Offer in Compromise (OIC) is an agreement between you and the IRS to settle your tax debt for less than the full amount owed. To qualify for an OIC, you must demonstrate that you are unable to pay your tax debt in full and meet certain eligibility requirements.
Currently Not Collectible - If you are facing financial hardship and are unable to pay your tax debt, you may qualify for Currently Not Collectible (CNC) status. This means that the IRS will temporarily suspend collection efforts until your financial situation improves. However, this does not mean you do not owe what you owe, it just means it is a temporary suspension on making monthly payments to the IRS.
How Can Tax Resolution Help You?
If you find yourself in the unfortunate situation of owing back taxes to the
IRS, then here is how tax resolution can help you in several ways:
Avoid Penalties and Interest - When you owe back taxes, the IRS will assess penalties and interest on the amount owed. These fees can add up to another 50% to the principal tax owed. We can help you avoid or reduce these fees, which can add up quickly over time.
Reduce Your Tax Debt - Tax resolution can help you negotiate a settlement agreement or payment plan that reduces your tax debt. This can make it easier to pay off your outstanding taxes and get back on track financially.
Protect Your Assets - If you owe back taxes, the IRS will eventually attempt to garnish your wages or seize your assets, including bank accounts. We can help you protect your assets and income and negotiate the lowest monthly payment allowed by law.
Improve Your Credit Score - When you owe back taxes, it may negatively impact your credit score. Tax resolution can help you pay off your tax debt and improve your credit score over time.
In conclusion, tax resolution is a way to settle tax debt and get back on track financially. It involves negotiating a payment plan or settlement agreement with the IRS or state tax authorities. By avoiding penalties and interest, reducing your tax debt, protecting your assets, and improving your credit score, tax resolution can help you achieve financial stability and peace of mind. If you owe back taxes, it is important to take action sooner, rather than later, and explore your options for resolution.
Our firm specializes in tax resolution, even if you have years of unfiled tax returns, or owe the IRS over $10,000 we can help! If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.
IRS Offers Several Ways To Pay Off Delinquent Tax Debt
It's no secret that millions of taxpayers struggle to pay their taxes. The IRS is unyielding when it comes to collecting money they think is theirs, so if you're facing back taxes owed the federal government highly advises seeking assistance as soon as possible before they resort to aggressive measures like taking money out of your bank accounts and seizing wages or property.
The IRS offers several different installment agreement payment plans to help taxpayers pay off their tax debt. These plans include:
Guaranteed Installment Agreement
This plan is available to taxpayers who owe $10,000 or less in taxes. The taxpayer must agree to pay the debt in full within three years and must have filed all required tax returns. No financials are required.
Streamlined Installment Agreement
This plan is available to taxpayers who owe $50,000 or less in taxes. The taxpayer must agree to pay the debt in full within 72 months and must have filed all required tax returns.Generally, you do not need to provide financial information to the IRS.
Partial Payment Installment Agreement
This plan is available to taxpayers who owe more than $50,000 in taxes. The taxpayer must agree to pay a portion of the debt over the statutory period which remains on the account, generally within 10 years of date of assessment and must have filed all required tax returns. Full financial disclosure is required and most likely a lien will be filed.
Extended or Flexible Payment Plan
This plan is available to taxpayers who owe up to $250,000 in taxes and are unable to pay the debt within 72 months. The taxpayer must agree to pay 100% of the debt over a longer period of time, up to 120 months. No financial information is required, however, a lien may be filed.
Currently Not Collectible
This plan is available to taxpayers who are unable to pay their taxes due to financial hardship. The taxpayer's account will be placed on hold for a period of time, during which the IRS will not take any collection action. Interest and penalties continue to accrue. Financials are required and a lien may be filed.
Offer in Compromise
This program is available to taxpayers who are unable to pay the full amount of taxes owed and are unable to pay through an installment agreement. The taxpayer may be able to settle their debt for less than the full amount owed. Many times, for a fraction of what’s owed. There are strict eligibility requirements and full financial disclosure is required.
Taxpayers should consult with a tax professional to determine the best payment plan for their specific situation.
Before you enter the daunting maze of IRS regulations, consult a Tax Relief Expert at our office. Schedule your complimentary consultation to assess your situation and compare your options for tax relief today!
Failing to address IRS tax debt can be a costly mistake. Interest compounds daily, similar to credit card debts, and the amount owed often doubles every several years due in part to penalties and interest. Now is the time to take charge of your finances by addressing this head-on before it spirals out of control. The IRS Installment Agreement can be a great option for taxpayers who can’t pay the IRS off lump sum.
Our firm has the expertise and skill to navigate the IRS and help you resolve your tax issues, even if you have unfiled returns from multiple years. Through an Offer in Compromise which is IRS's debt settlement program, we may be able to settle your entire tax debt- including penalties and interest for up to 85% off, if you qualify! Our team can guide you through this process and we invite anyone who wants professional advice on dealing with their taxes to contact us so that they can find a permanent solution for their problem.
How to Prepare for an IRS Audit
Filing taxes can be a daunting process, but for some it's much more than that - tax audits. This stressful situation involves having the IRS put your tax return under a microscope to see if you reported all your income and to see if you overstated your deductions and expenses. The IRS’s main goal in an audit is to assess more tax, penalties and interest. It’s an intimidating experience that most Americans dread facing!
An IRS audit can cause even the most squeaky-clean of taxpayers to become fearful and anxious when faced with defending yourself to an auditor. It's understandable why the majority feel powerless in this situation. You also have to understand, and get comfortable with, in the eyes of an IRS auditor, you are guilty until proven innocent. Navigating the tax code on your own is not a good place to be.
Tax audits don't have to be a source of fear as long as you've remained compliant with all the rules and regulations. The best way to ensure peace of mind is to work with an experienced Tax Resolution Specialist who represents clients in such matters and has a good track record. Contact our firm for a complimentary no obligation consultation to assess your situation.
An IRS audit can be a very time consuming and intrusive exercise that can include a visit from the auditor. Audits can also be conducted remotely. This method, known as a desk audit, involves sending documents through fax or mail to evaluate accuracy and compliance with established law.
Filing taxes is a complex process and the IRS seeks to ensure accuracy by auditing income tax returns. These examinations may be focused on certain deductions, particularly if taxpayers have claimed for more than what their reported incomes suggest - but this does not necessarily indicate any wrong-doing or misconduct. The IRS can also select your return to be audited for no reason at all. These are referred to as “random” audits to ensure compliance with the tax laws.
Taxes are a fundamental pillar of our society and the government strives to ensure that everyone is compliant. To this end, random audits from both Federal and State authorities may be conducted in order to verify taxpayers' income as well as expenses incurred throughout the year; making sure all taxation payments due remain accurate.
Preparing for a tax audit should be an ongoing process. To avoid any problems, ensure that all deductions taken are backed up with proof and every receipt is kept on file along with the return - you never know what may arise in the future! It's important to remember: only declare items which can easily be defended - your documents are a crucial piece to your defense. Ensure each tax record remains safely stored away for at least seven years as per IRS regulations.
Protect your finances and future by taking the time to review your tax returns before signing off, even if you have a professional do them. A thorough examination of the documents will not only help ensure accuracy in filing but also offers an invaluable opportunity for you to gain knowledge on taxes - safeguarding against potential penalties or interest charges related to inaccuracies down the line.
Tax audits can be intimidating, but with a little foresight and the right representation it doesn't have to cause stress. Staying organized throughout the year is key for having peace of mind when tax season rolls around. Finding an experienced professional who understands your individual needs will help make dealing with the audit as painless as possible.
Take the worry out of representing yourself in front of the IRS, which is like going to court without a lawyer. Let our expert team lift this from your shoulders and navigate the IRS on your behalf. Schedule a no-obligation consultation to explore your options and get on track towards permanently resolving any worries you have over having to meet with and defend yourself in an IRS or State income tax audit.
What is a Federal Tax Lien Notice & What Should You Do If You Receive One?
Ignoring your obligation to pay taxes can lead the federal government to conduct severe legal action against all of your existing assets, current and future income and assets you acquire in the future; this form of punishment is called a federal tax lien.
If you've received a certified letter indicating that the federal government has placed an unwelcome Federal 'tax lien' on your assets, this article can provide insights into what it means and how to remedy the issue.
What is a Federal Tax Lien?
When a taxpayer falls behind on their federal taxes, they are at risk of having an official public notification filed against them. This document is known as a Notice of Federal Tax Lien and can cause serious consequences for the individual's ability to enjoy any financial security.
A federal tax lien is an official document filed with the county recorder’s office (usually where the taxpayer lives or conducts business) and the secretary of state's office (if it’s a corporation or partnership) notifying the general public that a taxpayer has an unpaid federal tax debt.
Lien vs. Levy
For the unaware taxpayer, it is important to understand the difference between liens and levies. People will use them interchangeably, but they are very different. A lien grants the government legal rights over all of your property. This does not mean they are going to sell your property but it does make it difficult for you when the government has an ownership stake in your assets. Especially if you are looking to sell them, like real estate.
Anything you sell, the IRS will receive its cut before you receive anything.
A levy, on the other hand, is the physical seizure of income and assets. The IRS is the only creditor on the planet that can garnish your income and remove money from your bank account without a court order.
This may affect your credit.
The consequences of an IRS filing a Notice of Federal Tax Lien are significant. This lien is public record, and eventually may show up on one's credit report which can severely impact their ability to secure further credit in the future as well as lower their credit score.
The effects on your assets.
A federal tax lien restricts your ability to utilize and monetize any existing or future assets - from real-estate, stock investments, automobiles, etc. This means that the IRS is first in line for proceeds if you were to sell any of your assets, before you receive any cash.
The affects on your business.
Protecting your business from financial troubles is important, and a lien can be especially damaging. It attaches to all of your property — including accounts receivable –which could seriously impact the normal day to day operations of your business, leaving you further in debt than before.
Thinking about filing for bankruptcy?
Although filing for bankruptcy may offer relief from debt, it's important to note that your tax obligations and Notice of Federal Tax Lien still remain in effect. To ensure financial freedom, take steps to address any existing unpaid taxes before planning a successful future.
When a levy is enforced, it can result in the government seizing funds from your bank account or drastically reducing up to 75% of your net pay.
Next Steps
Paying off your tax debt in full is the most effective way to erase a federal lien. Typically the IRS will release the lien within one month of payment. But if you are unable to pay such a large sum, as most people are, at once don't lose hope - this is where a tax resolution specialist can help.
When it comes to the IRS, navigating legal channels on one's own is a risky endeavor. The best course of action for those facing tax issues is to seek out expert, professional help by calling an experienced and qualified tax resolution provider like us. With our expertise right by your side, your chances of achieving a positive outcome improve significantly!
How to Avoid an Expensive Tax Bill… & What to Do If You Receive One
Tax season can be a time of great anticipation for millions of Americans with dreams of a nice, big, refund check coming soon. Yet this year, many Americans may find themselves surprised and coming up short on their refunds.
Many taxpayers have been shocked to find that this year, instead of a big tax refund check arriving in the mail, they are being saddled with an unexpected bill from Uncle Sam. The combination of recent tax law changes and updated employer withholding tables has left individuals scrambling to figure out how to pay for their new IRS obligations due at filing time.
If you're worried about a looming tax bill, never fear: there are measures you can take to ensure that your taxes don't unexpectedly balloon. From budgeting tips to what do when the worst happens, these strategies will have your wallet breathing easy throughout the year!
The Earlier the Better!
Ignoring an IRS debt could ultimately result in serious consequences. It is in your best interest to be aware of any outstanding amount as soon as possible, providing time for tax planning and sourcing the necessary funds
Don't let late payments rack up and cause costly penalties and interest. Be proactive about filing your taxes so you'll have a good idea of what will be owed, if anything, that is needed to be paid on time.
Pay Attention to Your Paychecks
With the recent changes in tax law, your paychecks may have grown more generous - but don't get too excited! They could mean less of a refund or an unexpected bill when you file. Make sure to stay informed and plan ahead so unpleasant surprises won't come back to haunt you this filing season.
To prepare for tax season, it's important to monitor your paychecks and ensure that the right amount is withheld. If you see a decrease in federal taxes being taken out of each paycheck, adjust this with your employer immediately - even though it may mean taking home less every month. Doing so can help protect you from federal and state tax debts and penalties later!
Run Your Numbers Before
With just your final paycheck from last year and a few additional details, you can gain insight into what kind of tax refund or balance due to expect come filing season. It pays to take the time for preparation now so there are no unpleasant surprises later! However, please note that you should never use your 2022 final paycheck to prepare your return. You’ll need the actual W-2 from your employer in order to file a complete and accurate return.
To be prepared for tax season, compile all necessary records of your income, credits and deductions to estimate what you owe. Leverage the power of a reliable tax preparation software or use an everyday calculator with those numbers in hand to better understand your financial situation.
Know You Have Back Taxes or Will Owe A Lot?
Ignoring a tax bill isn't an option; the IRS will always come knocking. Settling it quickly can save you from further financial trouble, so don't delay. Your taxes may burden your wallet now, but they'll take hefty chunks out of your future if left unresolved!
Dealing with the IRS can be a daunting experience for many taxpayers. Even getting the IRS on the phone these days is nearly impossible. Without proper guidance, and expert help, attempting to negotiate your own tax problem is like going to court without a lawyer - not a wise move!
Struggling with tax burdens from the IRS or State? Our experienced team knows the IRS’s “ins and outs”, knows how to navigate the IRS maze and is here to assist you in finding a resolution that works best for your unique situation. Take advantage of our knowledge and expertise by booking an appointment with us today - take control of your taxes, and your life, before they become unmanageable!
