Getting Back Taxes Help
It doesn’t take much to fall behind on your taxes. Perhaps you mistakenly didn’t have enough withheld from your paycheck one year, and bam—you found yourself staring at a huge IRS bill. You didn’t know where you would find the money to pay it, so you ignore it. Don’t put it off anymore, getting back taxes help sooner than later can only make your situation better.
Don’t avoid filing your next tax return because you still hadn’t paid last year’s bill. It will pile up quickly, and before you know it, you’re in a deeper hole.
The first step to getting your tax issues straightened out is to make a commitment to prioritize your tax liability and get it taken care of before it’s too late.
The IRS does have the right to garnish your wages, levy your bank accounts, and even seize your personal property. It’s time to obtain IRS back tax help before the situation becomes even worse.
Ways to Pay Back Taxes or Avoid Them
It’s important the taxpayer pay their late taxes owed asap. Penalties and interest continue to accrue until the delinquent taxes are paid in full. The first thing to do is determine whether you have any available resources to borrow against to pay off the late taxes or avoid them altogether. This can lead to potential windfall savings for the taxpayer. You can replace or avert a liability by replacing it with a liability that has less holding costs (fees, interest, etc.). Here are some ways you may be able to do that.
Individual Taxpayer Payoff or Avoid
Refinancing Your Home
Provided you own a home and that home has adequate equity and you qualify, refinancing your home to pay off the IRS is a great tax-free alternative. Even with an existing overdue IRS tax liability, its possible you can find a lending institution willing to refinance your home provided you have the income and job history to qualify. Being proactive and doing this prior to any tax lien or tax levy filing is critical. After any filing it will be much more difficult. Dependent on how far along you are in the collection process, finding an institution to refinance the home may not be easy. Nonetheless, there are financing sources such as smaller banks and non-traditional lenders that may be willing to work with you.
Borrow against your whole life insurance policy. You may have a life insurance policy with cash value. You may not want to surrender that policy for its cash value leaving your loved ones with no life insurance. Borrowing against the policy may provide you a tax free way to raise money to erase unpaid taxes and steer clear of the IRS. The loan taken out on your insurance policy will have to be paid back with interest, however, the interest cost of paying back the loan on the policy will pale in comparison to the penalties and interest paid on an IRS tax liability. Any loan must be accompanied by a legally bound contract to repay it.
401K, 403B’s or Pension Plan
If you have a 401k, 403B or pension plan, etc. consider borrowing money from your retirement plan. The IRS has guidelines to follow. In addition, depending on your situation you might qualify for a hardship withdrawal. Borrowing from your retirement plan is not the same as an early withdrawal which can lead to penalties and another tax liability. You will have to pay back the loan with interest for tax reporting purposes.
IRS Rules to Borrow Against 401k, 403B or Pension Plan
For a 401k or 403B your employer must have language allowing loans to be taken by participants. You will want to make sure your plan allows for loans. The loan must be based on a legally enforceable agreement. The loan must be documented and include a date, amount of loan and a schedule for repayment. The loan can be up to 50% of taxpayers balance or a maximum of $50,000.
Borrow money against an asset you own. You may own a business and that business has assets that have value. Due to the ongoing nature of the business you need that asset to operate your business and can’t sell it. However, you may be able to borrow money against that asset using it as collateral.
Borrow money against an illiquid asset. You may own land that has value. However, the land is not something you can sell quickly to remedy your situation. Sometimes the sale of a parcel of land can take months or years. Instead consider borrowing money and using the land as collateral to erase or avoid your tax liability.
Business Ideas, Pay Late Taxes or Avoid
Your business may be profitable yet have payroll 941, trust fund recovery, sales tax problems, etc. Utilizing non-traditional sources of financing for business owners almost always comes with higher interest charges and or fees, however, in most cases they will be far less than the IRS is or would be charging you for unpaid taxes.
Invoice or Account Receivable Factoring (Borrowing Against):
Your business may have an invoice payment cycle longer than others. It may rely on 1 or 2 large customers with good payment history, whom pay very slowly. Your business may have accounts receivables which take time to collect. If able to factor you can reallocate the funds to the IRS. The source of funds for invoice factoring is generally more concerned with your customers ability to pay, not your business.
Family and Friends, Investors
You may be able to borrow money from a family member or friend by offering them equity (partial ownership) in your business.
Borrow Against Inventory
Your business may have inventory of raw materials or finished goods that you can borrow against to get a percentage of their value.
Machinery and Equipment
Borrow against your machinery and equipment. Some lending sources may be willing to advance you a percentage of the liquidation value of these assets.
Owner Occupied Real Estate
Borrow against the owned real estate which houses your business, given it has adequate equity.
If you have the resources to qualify for any of these options, you will almost surely need the services of an experienced IRS Tax Lawyer. They can prepare and review the appropriate paperwork, draw up the agreements, review the existing assets for loan covenants, subordination clauses and pre-payment penalties, etc.
What Will Happen if You Don’t Address Your Back Taxes?
In most cases, taxpayers aren’t fully aware of the consequences they could face for failure to file and pay taxes. When you don’t file your taxes, the IRS can still see what you might owe, and it’s not going to be happy with you.
If you fail to pay your taxes, the IRS adds on huge tax penalties and interest charges, which make your situation much worse than it otherwise would have been. If this goes on for an extended period of time, the severity of the situation compounds. The IRS will take action against you if you wait—it’s only a matter of time. Here you can find out how much you owe the IRS
You don’t want to face these kinds of negative consequences, and that includes calls and letters from the IRS. There really is only one way to resolve issues with your back taxes: Face them. That being said, you don’t have to face them alone. Tax relief lawyers exist to help people like you get help with their IRS back taxes.
Can working with a tax lawyer get you back taxes help?
Yes, a tax lawyer can help you with your back taxes by going over your finances, your income, your other liabilities, your assets, and your personal situation and finding the best legal solution to get your taxes paid off once and for all. Handling this situation on your own is stressful and unnecessary when you can have legal help beside you.
Not only will your lawyer help you figure out how to pay your back taxes, but we can also communicate with the IRS on your behalf, taking some of that negativity out of your life. A few common methods used for resolving back tax issues are listed below:
- Offer in Compromise – An offer in compromise is a settlement agreement between you and the IRS. In some circumstances, the IRS may allow you to settle your back tax liability for less than the full amount you owe.
- Installment Agreements – Installment agreements can be a great way to pay your back tax liability through a monthly plan. You would still have to pay off all of your back taxes owed, but you could do it through an affordable monthly payment.
- Currently Not Collectible – If you truly don’t have the money to pay your taxes, it’s possible to get the IRS to stop collections by proving that your account should be placed in Currently Not Collectible status.
A qualified and experienced tax lawyer with the W Tax Group can help you with any of the above back tax solutions
Process to Get Back Taxes Help
IRS Back Tax Assistance Is a Phone Call Away
There is no liability collector more intimidating than the IRS, and owing back taxes is like having a dark cloud hovering over your life. So if you’re feeling stressed and worried about how to pay off your back taxes, you should realize this issue has been solved thousands of times before and it can be done for you as well.
Get the IRS back tax help you need by calling the W Tax Group today.