While some people see penalties and interest from the IRS as a nightmare, these problems are likely temporary. Nobody wants to deal with the IRS, but the penalties and interest on top of your tax can be just as bad. Even if you’re late or miss payments, you might still be eligible to remove the penalties and interest that have been added to your account—but how?
1. Determine How Much You Owe
The first step is to determine how much you owe before you talk to the IRS. Estimate the amount of money you earned in the years you didn’t file and figure out how much you owed that year. You can also reach out to a tax professional to help you with this.
2. File Your Taxes
When you have determined the amount of money you owe, you need to file your tax returns for the previous years you’ve missed out on. It’s crucial you are guided by a tax professional in this step because tax laws regularly change. There may be deductions of credits you can claim for the previous years. Moreover, a professional will help you maximize your tax returns.
3. Negotiate with the IRS
You likely have a huge tax bill to pay; the good news is you can negotiate with the IRS. Before you do, review the tax bill carefully and ensure every detail is accurate. If you can pay for everything, then it’s better you do it.
On the other hand, you will need to negotiate with the IRS and come up with a payment plan that suits your needs. You can also apply for a tax debt relief program that can reduce or eliminate your tax bill.
4. Apply for IRS Penalty Abatement
An IRS penalty abatement can help remove tax penalties. In some cases, you may even have some interest or penalty payments refunded to you.
When you apply for a penalty abatement, you need to prove a valid reason for not paying your taxes on time. Note that having no money to pay for it isn’t a valid reason. You will need to prove hardships, such as a death or severe illness in the family.
This is why you need to have a tax professional to guide you to ensure that you are eligible for abatement with the IRS.
You can avoid IRS penalties by paying your taxes every year on time. Additionally, ensuring that there are no errors can help you as well. This is why it is recommended you seek the help of a tax expert that can help you sort out your finances and avoid IRS penalties.
It’s no secret that the IRS charges hefty penalties for those who don’t file their tax returns in a timely manner. Those who don’t pay their taxes can face even worse.
So what should you do if you owe the government money but can’t afford to make a payment? Don’t panic. The IRS wants you to comply with your tax filing—not to be buried in debt—and thus gives taxpayers several alternatives for getting relief from penalties and interest.
Get tax relief help here at Axiom Tax Resolution Group in Birmingham, AL. We are a tax resolution services specialist that can provide you with a permanent solution. Contact us!