Wednesday, January 4, 2012

Handling IRS Collections Methods

Handling IRS Collections Methods

The IRS collections process begins when you submit to the IRS your tax return, without the amount due yet. The IRS will be the one to determine how much you owe them by sending you a bill. This first notice will consist of explanations of the amount due as well as a request to receive full payment. Other notices, this time including applicable penalties and carrying more threatening tones, will be sent should you choose to ignore their mails. The good side though, is all these adhere to a specific order and format therefore, you can refer to the IRS for more details regarding each. The general notion is that receiving several notices means you are facing potential problems with the IRS.

Should you find some errors in the calculation of your taxes, you simply have to send the IRS a letter or make a phone call to request for a meeting with them. They are always open for a discussion that will eventually lead to making the needed adjustments in your taxes should it be found out that there were indeed errors in the computation. For instance, if you already paid the bill and they continue to send out notices, you simply need to give them proof of payment such as copies of a canceled check. Just make sure that only copies of the original documents are forwarded t to the IRS.

In the case where you feel you can't afford to pay for the full amount of your taxes, certain payment options are available. You may request for an arrangement of an installment payment plan. This payment option has three implications: you pay for your taxes over a lengthened period, you incur the applicable charges for the unpaid balance and you are penalized until you have completely settled your dues.

If you truthfully find it hard to pay even a partial amount, options are still available. Upon request, the IRS may put off their collection attempts for a certain period and consider you as currently not collective. The downside of this option, however, is this still causes you to be charged with penalties and interests that will most probably accumulate making your IRS problems even worse.

OIC, or Offer in Compromise, is a solution most coveted by tax payers. When given, this allows you to pay only a portion of the total amount due and the rest of the debt is forgiven. Although statistically you are likely to be denied in your application for Offer In Compromise, submitting such request will be worth the while as this would effectively end your IRS problem, at least until the next year.

In reality, there are a number of options available to help you deal with IRS concerns. Some of them are as simple as calling your nearest IRS office while others involve employing the services of a tax lawyer. These options are all in the premise that even though you are indebted to the government, you are still entitled to a fair and just treatment. Just be sure to prudently respond to IRS notices to prevent more serious collection procedures from being enforced upon you.

Handling IRS Collections Methods

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