What Are The Common Ways Law Advocates Can Help You Reduce Your Tax Debt?
Taxes: a subject that fills many of us with dread. While paying taxes is an inescapable reality of life, what if you find yourself owing more than you can afford?
Sometimes, circumstances can lead to mounting tax debt, making it nearly impossible for individuals to see a way out.
But fear not, for this is where tax law advocates come into the picture. These professionals are trained to help you navigate the intricate labyrinth of tax laws and find the best ways to reduce or even resolve your tax debt.
If you’re drowning in tax debt, here are some common strategies employed by law advocates to help provide relief:
One of the most sought-after solutions when it comes to reducing tax debt is the Offer in Compromise. This strategy involves the taxpayer and the IRS reaching an agreement to settle the tax debt for less than what is owed.
For those who genuinely can’t pay their full tax liability, this can be a lifesaver. But securing an OIC isn’t a straightforward process.
It demands a thorough understanding of the rules and an ability to convincingly present one’s financial situation.
This is where tax law advocates come in handy. Firms such as Tax Law Advocates possess the expertise to navigate this terrain and improve your chances of having your offer accepted.
Setting Up An Installment Agreement
If paying your tax debt all at once seems impossible, you can opt for an installment agreement. This allows you to make monthly payments towards your tax liability over time.
Tax law advocates can help negotiate a favorable monthly payment amount that aligns with your financial situation. They ensure that while you’re working to settle your debt, you’re not strained beyond your means.
In cases where you genuinely cannot afford to pay anything towards your tax debt due to severe financial hardship, the IRS might declare your account as “Currently Not Collectible” (CNC).
This means the IRS temporarily halts attempts to collect your debt. While this doesn’t erase what you owe, it provides breathing room until your financial situation improves. A tax advocate can guide you in assembling the necessary documentation and arguing your case effectively to the IRS.
Sometimes, a significant portion of tax debt comprises penalties rather than the original tax owed.
If you have a legitimate reason for not meeting your tax obligations on time (such as a personal crisis, natural disaster, or lack of understanding), you might qualify for penalty abatement. Law advocates can aid in making a compelling case for the removal of these penalties.
As a last resort, some taxpayers consider filing for bankruptcy to discharge their tax debts. However, not all tax debts are dischargeable, and there are strict criteria to be met.
It’s crucial to understand which taxes can be eliminated through bankruptcy and how it will impact your overall financial health. Tax law advocates can provide clarity on these issues and guide you on the best path forward.
Failing to pay your tax debt can result in the IRS placing a lien on your assets or even levying (seizing) them. These actions can be financially and emotionally devastating.
Tax advocates can challenge these measures, negotiate with the IRS on your behalf, and work towards a solution that prevents such drastic actions.
If you believe the IRS made errors during an audit, leading to an inflated tax debt, you can request an audit reconsideration. This process involves presenting new or previously unconsidered information that supports your case. A seasoned tax law advocate can help identify these avenues and champion your cause during the reconsideration.
Tax debt can feel overwhelming, but it’s essential to remember that there are avenues available for relief. Seeking the expertise of tax law advocates can be a game-changer. These professionals are equipped to evaluate your situation, recommend the best strategies, and negotiate on your behalf, ensuring you get the best possible outcome.
So, before panicking about that looming tax debt, consider consulting with a tax advocate who can help guide you to a brighter financial future.