"I am single as well as I owe the IRS $80,000 in back taxes for tax obligation years 2000 with 2003. I think I possibly owe some money to the State of Ohio and also I presently make $40,000 annually. I just obtained a Notification of Levy, which specifies that the Internal Revenue Service prepares to garnish my wages. I understand I will certainly be fired if my employer finds out. What can I do?"
The foregoing is an archetype of the kinds of tax obligation troubles a tax obligation law office encounters on a daily basis. Individuals faced with tax obligation problems and also foreshadowing levies and/or garnishments are usually mentally distraught - thinking that they will shed their houses, their work, their marital relationships. Lots of are worried that they will even be sent to prison. Sadly, a number of their concerns stand. In this new age of aggressive tax obligation enforcement, losing your residence is a real possibility as well as being sent to jail is not totally out of the question.
Thankfully, this tax obligation issue does not need to spoil our customer's life. Those of us that turn on the television also simply once a week for 15 mins is aware of the Notorious Offer in Compromise program. This program resolves your tax troubles for "cents on the dollar." However, regardless of what you listen to on tv, you actually need to remain in dire straits to qualify for this program. Our $40,000 each year single tax customer might, yet possibly won't qualify. It he has any kind of cash left over from his income, he can be certain the IRS desires it.
However, several tax customers do qualify for an Installment Agreement, either partial or complete. A $40,000 per year solitary tax obligation customer can not perhaps pay off an $80,000 tax financial obligation, especially when charges and rate of interest remain to accumulate. Under these scenarios, a Partial Pay Installment Arrangement is likely the most effective option. This plan allows our tax obligation customer to pay the IRS a practical sum each month. Lot of times, the Internal Revenue Service will agree to accept less than the total amount due and bypass penalties and passion.
Obviously, if our tax obligation customer's earnings boosts, the IRS will likely uncover this new-found cash as well as will seek to renegotiate the payment plan. The Internal Revenue Service does realize that everyone needs an area to sleep, as well as certain various other standard requirements. In order to discuss the best payment plan feasible, our tax customer will require to make up these requirements in painful information. The more cash he requires to pay his monthly mortgage, the less money he has in his pocket to pay the Internal Revenue Service. Keep in mind however, the Internal Revenue Service has actually established national standards for the basic necessities. With an income of $40,000 each year, our solitary tax obligation client should not count on being able to continue to be in his $250,000 house.
The good news is that the IRS has a statute of limitations. The Internal Revenue Service can not continue to accumulate from our tax obligation customer more than ten years after the tax was examined without suing him for an expansion, which is very unusual. In the case of our $40,000 annually tax customer, the taxes owing for 2000 were most likely assessed at some time around 2002. The Internal Revenue Service has a "drop-dead day" in 2012. John Du Wors If it hasn't accumulated already, our tax obligation customer can likely relax very easy that the tax financial debt for that year is gone.
As constantly, with fortunately comes the negative. A State such as Ohio does not have a statute of limitations. They can as well as will pursue our tax clients forever. We lately had a client who had a car dealer over twenty years ago. He failed to pay sales tax in 1982. More than 25 years later, the State of Ohio imposed him for the unsettled sales tax obligation. Obviously, he no more had any paperwork to contest the quantity they asserted he owed. Nonetheless, he did have photographs of the car dealership, which were reclaimed in 1982. We had the ability to create these pictures to the State of Ohio, in order to document the number of cars he actually had in his stock at the time. We had the ability to minimize his tax obligation financial obligation by over $100,000.
Comparable to our vehicle dealer, our tax obligation client that makes $40,000 annually is not without hope. With quick involvement on our component and cooperation from our client, the wage garnishment can be stopped, prior to the company has any type of knowledge of it. The key is immediate activity. If the Internal Revenue Service recognizes that a tax expert will certainly be submitting a proposed resolution to the problem, any upcoming levy and/or garnishment will likely stay till a mutually-agreeable resolution is implemented. It is vital that tax problems be taken care of as swiftly and effectively as possible. Otherwise, our tax client might locate himself unable to pay his home loan or make his car settlement, as the Internal Revenue Service has taken almost all of his $770 each week paycheck.