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What Are the IRS or State Tax Levies?

What Are the IRS or State Tax Levies?

By on Jul 11, 2019 in wage garnishment | 0 comments

Tax debts are among the most difficult debts to eliminate, not even avoidable by filing bankruptcy. This is because the IRS has more power than other types of creditors to seize your assets. In this way, the IRS can use a tax levy to seize property without even having to take you to court for a winning judgment which is not the case with a bank or credit card company. The good news is that it’s possible to prevent a levy from happening or one that’s in progress. Let Success Tax Relief explain this system to you. What is a Tax Levy? Tax liens and tax levies are ways the Internal Revenue Service’s tax debt collection enforcement happens. It is the common method the IRS uses to get money owed by a taxpayer who doesn’t pay the levy on time. Tax levies can be collected in several different ways. Here are some of the most common: Bank levies: The IRS can require your bank to prevent withdrawals from your account for 21 days and then withdraw funds from your bank accounts. The bank must then forward the money you owe to the IRS.Wage garnishment: Your employer will be forced to hold back a portion of your pay to send to the IRS until your debt is paid.Property seizure: The IRS can take the property you own (such as a house or automobile), sell it, and apply the sales proceeds to your tax debt.Reduced tax refunds: The IRS may hold money that would otherwise come to you via a refund by completely redirecting refunds from the state to the IRS instead of to you.Miscellaneous: Surprising ways such as tax liability, social security, or federal taxes are another way the IRS will make sure your tax bill is paid. When Will the IRS Levy Your Assets? The IRS will start to levy your assets after a final notice of intent to do so when they have made attempts to offer a payment plan, booking services, or offer in compromise. In particular, the IRS will only begin to collect taxes owed if the following things have already happened. The IRS sent you a notice demanding payment.You ignored the notice or failed to...

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What is IRS Form 1040-ES?

What is IRS Form 1040-ES?

By on Jul 8, 2019 in blog | 0 comments

The IRS Form 1040 is an official documents that U.S. taxpayers can use to file their annual income tax return. You can use Form 1040-ES to pay income tax, self-employment tax and any other tax you may be liable for. ES stands for estimated tax, not to be confused with the standard 1040 which relates to the previous year. Depending on the type of income you report, it may be necessary to attach other forms or schedules to it, but the form has easily marked sections where you can report your income and deductions to determine the amount of tax you owe or the refund you can expect to receive. Who Pays Estimated Tax? Certain forms of income are not deducted at the source. For example, independent contractors and freelancers need to deduct their own taxes from their pay. Also, earnings from interest, dividends and rent, taxable unemployment compensation, retirement benefits and the taxable part of your Social Security benefits are other examples of income that is not taxed at the source. Consider If you have these types of income and then count on paying estimated tax. Paying Estimated Taxes Because the estimated tax payment is based on the estimation of your income for the current year, it’s easy to underestimate, resulting in an underpayment penalty. To avoid this, use your previous year’s taxes as a guide. Simply put, as long as you pay 100 percent of the previous year’s tax, you won’t have to pay the penalty. And don’t worry about overpaying – if you do you’ll receive a tax refund at the end of the year. This doesn’t apply to quarterly taxes however. Even if you overpaid the total tax due for the year and are eligible for a refund, if you pay quarterly taxes late you will receive a penalty. The Form 1040-ES package includes worksheets to help you account for differences between the previous and current year’s income and calculate the tax you owe. And remember, Success Tax Relief is always here to help When To File 1040-ES for Quarterly Taxes Estimated tax payments are due four times in a tax year. Most individuals are calendar year taxpayers with the infamous due date April 15...

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IRS Penalty Abatement Sample Letter

IRS Penalty Abatement Sample Letter

By on Dec 10, 2017 in IRS | 0 comments

If you owe back taxes to the Internal Revenue Service (IRS) and have recently been assessed a penalty for this debt, you are allowed to request relief for this penalty if you have a valid reason. A penalty abatement letter is a written request to the IRS for penalty relief for one of the following reasons: You did not previously have to file a return or you have no penalties for the 3 tax years prior to the tax year in which you received a penalty (first-time penalty abatement). You filed all currently required returns or filed an extension. You have paid, or arranged to pay, any tax due. You have reasonable cause for why you are unable to pay these penalties. If you are requesting a penalty abatement for a reasonable cause, you can use the sample letter below to help write your request. You should always address this correspondence to the Internal Revenue Service and send it to the address listed on the written notice of the tax due: IRS Penalty Abatement Sample Letter Template To:   Internal Revenue Service Penalty Abatement Department Street Address City, State, Zip Code Date: [ENTER DATE] To Whom It May Concern: I am writing to respectfully request the abatement of penalties, totaling $[ENTER DOLLAR AMOUNT] that was assessed related to the attached notice dated [ENTER DATE OF NOTICE]. The primary reason that…[CHOOSE 1 OF THE FOLLOWING THAT BEST APPLIES TO YOUR SITUATION]: I paid late I filed late I failed to report income Was because….[CHOOSE 1 OF THE FOLLOWING THAT BEST APPLIES TO YOUR SITUATION]: I suffered from a serious medical condition I suffered a catastrophic event (ie. your house burned down or all of your tax materials were stolen) A close family member died Other (significant event or “reasonable cause”) Please find attached documents which further detail the circumstances that prevented me from (paying late/filing late/failing to report income). [Note: You should attach all relevant supporting documents including letters from physicians, death notice, pictures, and any other documents that can support your position.] Please accept this petition for abatement of penalties due to reasonable cause. I can be reached at [ENTER PHONE NUMBER] with questions or if you need additional...

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IRS Settlement Agreement: A Step-by-Step Guide

IRS Settlement Agreement: A Step-by-Step Guide

By on Dec 7, 2017 in IRS | 0 comments

Reaching a settlement with the Internal Revenue Service (IRS) regarding your back taxes may be easier than you think. The IRS has implemented what they call a “Fresh Start Program” to help taxpayers who are struggling to pay their tax liabilities and associated penalties and interest. This program started back in 2011, and has relaxed the way that the IRS approaches tax liens, and has loosened the parameters for applying for an installment agreement and offer in compromise. If you are saddled with a large amount of tax debt and are looking for a way to move forward once and for all, follow these 5 steps to settle your debt. A Step by Step Guide to Setting Your Tax Debt Review all tax documents: The first thing that you should do as you prepare to propose a settlement with the IRS is to review all of your prior tax documents. You should be aware that the IRS looks much more favorably if you have submitted all prior returns (even if you have not paid the taxes due). You should have a solid idea of exactly how much you owe and how far back your debt goes so that you can negotiate with accurate and relevant information. 2. Review all correspondence from the IRS: Before you submit an application for a settlement, you should review any written correspondence from the IRS so that you are sure that you are both on the same page about your debt. 3. Evaluate your options: Your two main options for settlement are to request an installment agreement or an offer in compromise. 4. Installment Agreement: An Installment Agreement allows you to pay back your debt (plus interest and penalties) over a period of time, rather than in one lump sum. If you owe the IRS $50,000 or less, the Fresh Start Program will allow you to pay your debt through monthly direct debit payments over six years. The amount of paperwork to file for this request has been reduced to encourage taxpayers to utilize this option. 5. Offer in Compromise: An Offer in Compromise allows you to pay back your debt for less than you actually owe if you cannot afford to pay it...

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How to Remove Georgia State Tax Lien From Your Credit Report

How to Remove Georgia State Tax Lien From Your Credit Report

By on Dec 5, 2017 in State Tax Lien | 0 comments

Removing a state tax lien from your credit report can be an extremely difficult task. A tax lien is one of the most serious actions the state can take against a taxpayer for failing to pay their taxes. Avoiding a tax lien all together is your absolute best strategy, but if you find yourself on the receiving end of a state tax lien, here is what you need to know about removing it. Removal of A Tax Lien The Georgia Department of Revenue (GDOR) can remove a tax lien for one of the following reasons: Cancellation of Liens: The GDOR can cancel a tax lien when the tax liability in question has been resolved. Withdrawal of Liens: If you believe that the lien you have been issued was issued in error, you can request that the GDOR withdraw the lien. Release of Expired Liens: Expired liens do not attach to any property interest of the taxpayer whose name appears on the lien. A Tax Lien on Your Credit Report If you have received a tax lien from the GDOR or the Internal Revenue Service (IRS), there is no real way to prevent it from reaching the credit bureaus. Having a tax lien on your credit report can cause you serious trouble when it comes to your ability to get a loan or apply for a credit card. It’s always best to avoid reaching this point if at all possible, even if you need to apply for an installment agreement, an Offer in Compromise, or take out a personal loan to pay your tax debt. How to Remove a Tax Lien In order to remove a tax lien from your credit report, you will need to communicate directly with each credit bureau and make this request. The GDOR does not have control over how long a lien stays on a particular credit report. Tax liens are public information and a state lien can stay on your record indefinitely (while a federal lien typically stays on your credit report for 7-10 years). You can request a copy of your credit report at any time to find out if there is a lien that may be negatively impacting your credit score. The...

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