IRS Assistance

Tax Relief Agency

What are Delinquent Taxes

While it may seem obvious to most, delinquent taxes refer to any amount of money that is owed to the Internal Revenue Service. Most people think of tax delinquency as a long-overdue tax bill, like a year or more.

Technically an account is considered delinquent as soon as the due date for the tax return or whatever established liability has passed and the amount owed remains unpaid.

You will normally not receive any sort of notice from the IRS immediately, but if you allow the tax to remain unpaid you can be sure a notice will arrive.

In the case that you have delinquent taxes, it’s important that you act as quickly and swiftly as possible in handling the situation, as there are major repercussions to not paying your taxes.

 What happens if a taxpayer does not pay delinquent taxes?

Tax Relief Agency

Most immediately penalties and interest will accrue on top of the outstanding amount. Once the IRS decides that your taxes are ‘delinquent,’ they’ll start tacking on penalties that will worsen the longer the outstanding amount remains unpaid.

Interest on the outstanding balance also begins accruing. If the taxes remain unpaid, and no agreement has been reached, a Revenue Agent is then assigned to your specific account and they’ll reach out to you in order to resolve the issue.

What happens if there’s no response or payments during the collection period?

There’s a possibility that if the delinquent taxpayer is being noncompliant, the IRS will issue an assessment and then go on to issue a tax warrant.

This tax warrant covers the initial outstanding amount and then the interest and penalties that have accrued throughout the process. If the tax warrant is not paid within a certain amount of time, for whatever reason, then the case is filed through the county Superior Court.

Then there’s a possibility that liens come. A tax warrant basically establishes a lien against personal property or any asset that could be used to pay off the debt owed. This includes property of any sort, automobiles, wages, and even bank accounts.

Once the case is filed, it then becomes legal for the IRS to take your property or put a hold on your bank account – they can even go as far as to take the money from the bank themselves after a respective amount of time has passed.

Married Tax Filing

Married Filing Separately or Jointly?

There are several tax decisions to consider before filing tax returns as a couple after marriage. Namely, there are two status options: Married Filing Separately and Married Filing Jointly. There are advantages and disadvantages to each of those options to weigh in on. It’s recommended to get the neutral input of a professional tax relief attorney to assist in choosing the best option for your situation. Below, the advantages and disadvantages of each filing status will be explained.

Filing jointly qualifies the couple for several valuable tax breaks including, but not limited to: adoption credit, earned income credit, child and dependent credit, and traditional IRA deductions. It may mean a bigger tax refund and having a lower tax liability for the couple (offering IRS tax relief) – and it is usually the more financially advantageous choice. However, there are some instances where it is advantageous and even suitable to file separately. There is such a thing as the “joint and several liabilities where a spouse can be held liable for their spouse’s past financial actions. In such a case, this is where an “Innocent Spouse Relief” would come in handy when a spouse fails to adequately report income. To qualify, the IRS requires meeting all of the following requirements:

  • The individual filed a joint return that had an understatement of tax (deficiency) that’s solely attributed to the spouse’s erroneous items. Erroneous items include income received by the spouse but omitted from the return, as well as incorrectly reported credits, deductions, and property.
  • The individual establishes at the time they signed the return that they didn’t know about the errors and had no reason to know that there was an understatement of tax.
  • Considering facts and circumstances, it would be unfair to hold the spouse liable for the understatement of tax.

This is a legal situation that is best sorted out by consulting with a tax consultant.

On the other hand, there are also advantages to filing separately, where the individual and their spouse can choose to file on their income and assets separately. It means that the individual is considered single by the IRS and can qualify for Head of Household status. It will result in lower returns and filing separately, meaning that they are ineligible for several IRS assistance measures like deductions, credits, and exemptions that a couple filing jointly would qualify for. However, this status is a good protective measure for tax relief when the spouse has unpaid taxes, excessive student loan payments, and are high-income earners.

Late Tax Payment

The Consequences of Late Tax Payment – Laid Out

Late tax payments can incur many consequences in the United States. The Internal Service
Revenue (IRS) can punish taxpayers in many different ways if they do not pay income taxes on time. Tax relief options are also Some notable ways is the high incurred interest on the unpaid taxes and various other penalties for defaulting. If tax debt continues to increase, the IRS will send a scarlet letter in the form of a Notice of Deficiency. This 90-day letter of notification details any alleged tax issues and other penalties and interest. Besides the more prominent consequences, below is a list of lesser-known effects
of defaulted tax payments.
Here are 7 points to note about penalties and consequences:
● A failure-to-pay penalty may apply for not paying all of the taxes owed by the tax filing deadline
(April 15).
● Failure to file is a heavier penalty, even if the taxpayer is unable to pay the entirety of the taxes,
interest, and penalties will be reduced by paying as much as they can. There are other IRS
assistance options such as getting a loan or making an installment agreement to make payments.
● Penalties for filing late is 5% of unpaid taxes for each month or part of the month the return is late and it starts accruing the day after the tax filing date and will not exceed 25% of the unpaid taxes.
● Reimbursement will be delayed in addition to incurring the penalty and the taxpayer gives up
the ability to save or invest the money at a higher return
● The IRS has a right to file a “substitute for return” on behalf of the filer and it does not take the filers’ best interests in mind. This return is not taking into account any tax credits and deductions, meaning that the taxpayer will likely have to pay higher taxes.
● IRS tax debt means forfeiture of tax refunds, and it will be considered a generous “donation”
● If after multiple notices the taxpayer refuses to comply, the IRS can send a representative to collect payment if they owe $25,000 or more. Continuing to evade tax collection will let to asset seizure and may lead to jail time.
If faced with any of the more severe penalties it may be helpful to consult with tax relief services. The professionals will be more able to advise on the assistance process and come up with a better way to restructure payments. Whatever the reason for late tax payments, it can still be worked through with the proper guidance.