Understanding Tax Debt
Understanding the processes Internal Revenue Services (IRS) play in each person’s life is no joke. The complexities of tax laws and regulations are one thing to be considered when dealing with this matter. Paying your tax may be as simple as it sounds but when problems arise, the need to understanding a tad of how things will go must come into place. The rest of it goes to an expert. That said, get an IRS tax attorney.
It is imperative nonetheless to take grasp of the system, importantly, once it becomes a nightmare. If you fail to pay taxes, the IRS has the right to seize any real property (homes) or personal property (bank accounts, savings, paycheck) you own.
One most common measure is wage garnishment, which falls under personal property. Wage garnishment is the process whereby money is deducted from the employee’s monetary compensation, as provided-but not always-by a court order to satisfy a debt owed. Upon occurrence of such, the IRS will send you a notice of past due taxes with 10 to 30 days debt care.
In case where you are unable to pay the taxes, a final notice will be sent to you. This calls for a hearing. The IRS will pursue with the wage garnishment 30 days after this notice. However, an offer in compromise (OIC) can be made-in agreement between two parties involved-in exchange of the wage garnishment, plus to lessen your total debt. Even so, OIC is only granted to qualified individuals.
To be considered for an OIC agreement, you must meet at least one of the three conditions: Doubt of Liability, granted when debtor shows reason for doubt that the assessed tax liability is correct (this covers misinterpretation of the law made by the examiner, failure to consider taxpayer’s evidence, taxpayer has new evidence); Doubt of Collectibility, granted when taxpayer shows incapacity of fully paying the tax bill under any circumstances; Effective Tax Administration, granted when such collection of the debt manifests an economic hardship or would be unfair and inequitable to the taxpayer.
In pursuing the OIC, the taxpayer must complete a financial statement through Form 656 provided by the IRS with a $150 application fee. OIC can be paid in different payment options as offered by the IRS.
Tax debts can be a major headache to our lives. It is therefore important that we take responsibility of our taxes. This is the primordial goal of the IRS for imposing wage garnishments-to get us back to our proper payment system, and not to make our lives harder.
In cases like this, it is recommended that you consult an IRS tax advisor to help you “understand your legal position and explain all of your legal options.” With your legal advisor, your tax problem is appropriately remedied.
