IRS Tax Debt - Even Government Employees Can Lose Their Jobs Due to Their Tax Debt

The Few: Government jobs are hard to get. There's a waiting list a mile long. But when you finally land that job, you have to be careful. Did you know being in debt to the IRS can actually make you lose your job? Then you'll be broke and still be in debt. If you work for the government, watch out. This scenario could easily happen to you.

What They'll Do:

Bank Levy: This is a common way the IRS collects their money. Ignore the IRS's "Final Notice and Intent to Levy," and the IRS might seize the money you owe right out of your bank account. In one fatal swoop, all the money you've saved up for years could be gone.

Wage Garnishment: This is a bigger danger to you and your job. The IRS has to notify your place of employment when they decide to garnish your wages. If you fall into the category of people that cannot be in debt to a government entity, this could cause you to lose your job. Although usually, you'll get a limited amount of time to resolve the debt, first.

Don't Delay! You can't lose your job. So you need to know how to remove an IRS debt, and quickly! But nothing with the IRS can go fast. Especially when you're not a professional. Remember, you're dealing with people who are skilled and trained in IRS procedure. But here are some methods for beating your debt.

Installment Agreement: Try paying monthly. Everyone has the right to apply for this program. The IRS will need to know your full and complete financial information. They will compare that to the amount of money you spent on your basic needs. Then they will determine how much you will pay them each month. This may sound a bit like how you pay your credit card debts, but it's not the same. With your credit card debts, you choose how much you pay each month. But with the IRS, They choose how much you pay each month. And if you default, you will be disqualified from the plan! So you cannot miss even one payment.

Offer in Compromise: Good luck winning this! You do have the option to settle your debt. But don't even bother to try to submit and Offer if your financial situation isn't dire. The IRS will again, check your entire financial situation. If they find you have no assets and absolutely no way to pay your debt in full, they will consider an Offer. The IRS approves only around 2% of the people that apply. So make sure you don't make any small mistakes while filling out the 44 page document.

Getting Lucky: If you take care of your IRS debt before they find you, you'll be one of the lucky ones. For many people out there, it's already too late. Work on your debt now, before the IRS makes you lose your job and your money.

Now You Have The Smoking Gun...Use it!

Richard Close was an IRS-Hitman. He worked as a revenue officer for the IRS and his father was the head of the collections branch for 30 years; so it runs in the family. He left that behind and now he's partnered with Tax Defense Network to help thousands of Americans with their tax problems. He gives the tips and tricks for you to fight the IRS and win! Visit him at: http://irs-hitman.blogspot.com orhttp://www.taxdefensenetwork.com or contact: email irs-hitman@taxdefensenetwork.com or 1-888-248-9058.

Article Source: http://EzineArticles.com/expert/Richard_Close/159875

Concepts To Consider When You Can't Pay Your Taxes

Not paying your taxes on time entails various consequences. If you are having trouble paying your taxes in full, don't let it hinder you in filing your tax return timely. Consider paying as large a percentage of the amount owed or borrow money from others in order to settle your tax liability in full. Filing a return and not including full payment can save you large amounts of penalties and fees. Moreover, payment plans are available and being on a current payment plans avoids IRS collection process which may include, property seizures, garnishments etc. Most CPA firms can advise you on these matters.

These are the ordinary penalties:

· "Filing Failure" penalty

5% per month on the amount of tax due on the return to a maximum of 25%

· "Payment Failure" penalty

.5% per month on the amount of your tax due on the return to a maximum of 25%

· Both "Filing Failure" penalty and "Payment Failure" penalty apply

The "Filing Failure" penalty lowers to 4.5% per month and "Payment Failure" penalty is

.5% per month. The combined penalty stays at 5%. The maximum penalty for both is 25%. Then, the "Payment Failure" penalty continues at.5% per month another 45 more months. Both penalties can go to a maximum of 47.5%.

Besides the penalties above, interest is charged on late payments. Also when you are self-employed, you take full responsibility for paying the taxes as money is earned through the year.

Payment extensions are provided when it can be proven that unwarranted hardship exists. Inconvenience caused by paying the tax isn't enough grounds for unwarranted hardship. The taxpayer must show that paying the tax would cause significant difficulty and/or expense. For example, a fire sale, selling property at an extremely discounted price, since the person faces the difficulty of paying taxes.

When a payment extension is granted, interest is still charged but the "Payment Failure" penalty is waived. The payment extension is usually good for six months from the due date of the return. The IRS will lengthen time allowed for a payment extension due to some circumstances..

To apply for a payment extension use Form 1127. Form 1127 requires a taxpayer to provide detailed statements of; assets and liabilities, statement income for each of the 3 months prior to the due date of the tax return and statement expenses for each of the 3 months prior to the due date of the tax return.

Paying Income Taxes With Borrowed Funds

Borrowing money to settle tax obligations is an option. Here are some various scenarios:

· Loan From Individuals

Borrow from relatives or friends. Interest rates are probably lower.

· Loans From Banks Or Other Commercial Institutions

Interest on this type of loan is usually considered a non-deductible personal interest expense. Typically a financially troubled taxpayer has a hard time to qualify for this type of loan.

· Home Equity Loan

Interest rates may be lower than with other types of loans. The interest payments may be tax-deductible. This is usually the cheapest option.

· Credit Card

There are a number of companies approved to accept credit cards or debit cards to pay income tax. Note, interest charges may be high and is usually considered a non-deductible personal interest expense. On top of this interest, the companies approved to accept credit cards or debit cards to pay income tax charge a service fee.

Monthly Payment Agreement Request

File form 9465 to apply for a monthly payment agreement with IRS, this can be done online at WWW.IRS.GOV. This process can be done after a hardship extension expires. Form 9465 requires less information than Form 1127 regarding the hardship extension. No financial statements are required if tax due is under $50,000.

When the amount owed is more than $50,000 Form 433-A Collection Information Statement for Wage Earners and Self-Employed Individuals is required. This form helps the IRS obtain detailed, information about you. Consider consulting a CPA Firm about allowable expenses and national living standards that correspond to Form 433-A.

There is a fee for the monthly payment agreement and it is deducted from the first payment if the request is approved. When the payment agreement request is approved, interest on any tax due date is still imposed. However the "Payment Failure" penalty is reduced to.25 % instead of.5% if the return is timely filed.

The monthly payment agreement has a fee of $120. The fee is reduced to $52 when a person permits the IRS auto debit from their account. In the event the taxpayer qualifies as a low-income the fee is reduced to $43.

Monthly Payment Agreements may be terminated if IRS thinks the probability of obtaining payments are at risk. The IRS will also terminate a monthly payment agreement if the financial information supplied was not accurate or complete.

Other reasons for terminating the agreement are the following:

• Failing to make a monthly payment.

• Failing to pay another tax liability when it's due.

• Failing to provide updated financial information.

• IRS finds out that your financial condition has improved.

A written notice will be sent by the IRS 30 days prior to changing or terminating a monthly payment agreement. IRS will also provide the grounds for changing or terminating a monthly payment agreement. The requirement for written notice does not apply when the IRS believes the collection of tax owed is at risk.

Thus, it is very important that tax returns are filed properly even if full payment cannot be made. Options like hardships extensions or monthly payment agreements may be availed to prevent further charges, penalties and other serious consequences.

We hope this article was helpful. This article is an example for purposes of illustration only and is intended as a general resource, not a recommendation.

http://www.cpafirmsouthflorida.com

We can help deal with the IRS and paying your taxes. Accountant Pompano Beach here to help!

Article Source: http://EzineArticles.com/expert/Peter_D._Rudolph/1367050

US Tax Accountant Demonstrates "Due Diligence" by Expats

Federal tax code provisions that apply exclusively to US citizens living overseas offer money-saving exclusions and deductions but they also have rigorous qualifying and reporting requirements.

Failure to comply with some of these regulations or misinterpreting a requirement for a hefty tax write-off could prove costly, both by incurring a higher bill and facing stiff penalties. This is where a US tax accountant with international tributary experience can provide not only professional expertise but also peace of mind.

The IRS is interested in whether US citizens who miscalculate their taxes did so intentionally or not, since tax fraud is a serious criminal offense. By hiring a reputable US tax accountant with international tributary experience, an expat demonstrates a measure of good intent and desire to be thorough and honest in calculating his or her income and expenses.

A US tax accountant specializing in expat tax preparation service is familiar with the detailed criteria that qualify an overseas US citizen to take advantage of money saving provisions such as the foreign earned income exclusion, credits and the foreign housing deduction. Without a qualified international US tax accountant, an expat who self-prepares a return, or hires a preparer without international experience, might miss out on significant savings or, worse, under-calculate and thus attract IRS scrutiny.

An American living abroad must file US tax returns and pay any tariffs due for as long as they keep their US citizenship (or green card, for US resident aliens living abroad). This is why it makes sense for expats not just to pay their taxes on time, but to develop an overall strategy that makes the most of applicable tributary provisions of both the US and the country of residence.

A US tax accountant with international experience can provide a level of expertise that a preparer in the US with no international experience would be hard-pressed to match. The provisions of the US tax code that apply exclusively to expats take hours just to read, and a full understanding of many of the sections requires several readings.

Real world experience in dealing with these complex provisions is another advantage that a US Tax Accountant with an expat clientele brings to the professional relationship. Knowing what to expect from the IRS is a valuable quality that an experienced international tax accountant develops over time.

Conducting business overseas, whether a solo professional practice or a small company, absolutely requires professional advice from a US tax accountant who has helped US entrepreneurs set up foreign legal entities.

Tax Planner CPA, a firm that specializes in expat tax planning, has a website that has a regularly updated collection of articles, blogs and Q&As addressing expat tax issues. The web site is http://www.taxplannercpa.com.

David Odom is a US Citizen who during his trip to India was informed about his requirement to still File US taxes in spite of not having US income.Since then, he began investigating expatriate taxation and now writes articles on the subject - so that fellow Americans don't run into the same issues as he did of US Tax Accountant.

Article Source: http://EzineArticles.com/expert/David_Smith_Odom/861561