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Posts by Thelma

What Happens When You Buy a House in a Tax Sale?

What Happens When You Buy a House in a Tax Sale?

By on Sep 12, 2019 in Homeowners, Tax | 0 comments

Real estate agents often tell their clients to simply avoid houses with tax liens filed against them. Conventional wisdom seems to suggest that they’re simply too much trouble. However, there’s also a fair amount of money to be made by buying homes with outstanding taxes. Some investors have even drawn handsome profits simply by buying liens and then profiting through the transaction. While this might seem like it’s too good to be true, crafty individuals who know how to play the system have been doing it for years. Since Success Tax Relief is dedicated to helping all sorts of taxpayers, we’ve seen our fair share of these real estate transactions. This question tends to come up quite often as a result. How Tax Sales Happen in the First Place The process that real estate agents refer to as a tax sale can take one of two different forms: Tax lien sales occur when liens are auctioned off to the highest public bidder. The bidder then has the right to collect the lien as well as any interest payments. If the original homeowner isn’t able to pay the lien, then the new owner can foreclose the property. Tax deed sales involve properties with completely unpaid taxes. When one occurs, the house itself is sold in entirety at auction. You’re not buying a lien in this case. Rather, you’re buying a physical piece of property. In either case, the taxes in question are generally related to property taxes as opposed to various fees assessed by the IRS. Collecting Money on Tax Sales If you’re lucky enough to be involved in a tax deed sale, then you should generally end up with the house you’re buying afterward. Once you’ve paid the money you bid, the house is yours. Unfortunately, things aren’t always so easy. Keep in mind that even if you do get the deed to the property, it may not be worth very much. Sometimes, homes go down in value since they were originally counted as a distressed property. Investors often see this as an opportunity to get a house at a great deal, which they then will sell at some point in the future once they’re able to file a...

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How Do I File a Financial Hardship With the IRS?

How Do I File a Financial Hardship With the IRS?

By on Aug 29, 2019 in IRS | 0 comments

Did you know that there’s an IRS program that could get those collection agents off your back for as long as you need to get back on your feet? Would you believe us if we said that there wasn’t even a charge involved? At Success Tax Relief, we’re often asked whether there’s any program that would apply to people across the board like this. Fortunately, there is. Taxpayers who are truly in need can file a financial hardship with the IRS and have a temporary forbearance placed on your account. As with everything related to federal taxes, however, you’ll need to prove a few things before the IRS will be willing to flat out grant you the kind of relief you’re looking for. Who Qualifies for a Hardship? Only people who genuinely cannot afford to pay their tax bill could ever truly qualify for hardship status. An overwhelming majority of those who apply for this coveted status get rejected rather easily because they didn’t meet a certain standard. The IRS has a tendency to have very specific requirements when it comes to granting an individual taxpayer the right to file as currently not collectible (CNC), which is also known as status 53. Keep in mind that this is essentially more of a stay on collection than a complete absolution. You’ll probably have to pay the bill at some point in the future. However, the IRS doesn’t come after you even if they do require certain interest payments and penalties to continue to accumulate somewhere in the background. Those who are already working with a representative from the IRS can request that the organization mark the status 53 block on their form. This means that a collector has filed Form 53 (Report of Currently Not Collectible Taxes) and given at least a cursory level of approval so far. Unfortunately, this form is always filed internally. Earning the Status 53 Filing Status That means you’ll be on the hook to file a few documents yourself in most cases. IRS agents could ask that you fill out Form 433-A, 433-B or 433-F to show that you really do have a legitimate hardship. In general, this requires the following to be true: Your...

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What are Tax Liens and What Do They Mean for Small Businesses?

What are Tax Liens and What Do They Mean for Small Businesses?

By on Aug 5, 2019 in Tax lien | 0 comments

The IRS is a government agency that deserves respect. History recounts that dodged taxes landed Al Capone in prison and not his other heinous crimes. In fiction, heroes and villains quip that they’d rather face violent vigilantes and meteors rather than face an audit. We pay our taxes for a reason: to avoid that dreaded letter in the mail.  Sometimes, however, mistakes happen. We miss deadlines in the spring or relevant correspondence. The IRS at the moment is short-staffed and overworked, but the agents remain on the ball for the most part. That is why you must pay attention regarding tax liens. What Is A Tax Lien? A tax lien is a notice that the government can claim your assets. These include property you own, finances, inventory, and equipment. If your business is a sole proprietorship or a partnership, then whoever owns the business will find their assets forfeited. In the case of an LLC, only the business assets are affected. Why Do Businesses Receive Tax Liens? Businesses will receive tax liens if they fail to pay their taxes, and don’t follow up with the IRS on a payment plan or late fees. It’s more of a last resort on the IRS’s part. That means you can take steps to prevent receiving one, as we will discuss. There may be many reasons why you are late on taxes. Maybe the payment isn’t there, due to emergencies or slow profits. Or you have switched from paying annually to quarterly, and thus the codes have become more complicated. In any case, you need to act, and fast! Steps Leading Up To The Lien Notice We must note that the IRS doesn’t just issue a lien at once. They usually provide some warning, so that you can still prevent a lien from happening. First, you get a notice and demand for payment if you miss the deadline. If you receive this, you will also see any penalties or interest in addition to the money due. You can still prevent a lien if you pay this amount quickly. Next, you and the IRS enter a period of negotiating payment. The IRS will understand if you cannot pay the full amount at once, and...

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How to Find, Locate, and Recover an Old 401(k) Account

How to Find, Locate, and Recover an Old 401(k) Account

By on Jul 24, 2019 in blog, Tax | 0 comments

The vast majority of unclaimed income comes from brokerage, checking and savings accounts, plus annuities, 401(k)s and IRAs inadvertently left behind by people who switch jobs or financial institutions leaving valuable assets behind. The good news is that it’s relatively painless to locate lost funds. Since companies are required by law to mail send the funds to the owner’s last known address but if they’re returned or the owner can’t be reached, the assets must be relinquished to the state. Also, online resources allow you to search for old accounts anywhere you might have lived or worked. And if you do find money is owed to you, it’s easy to fill out a simple online form to get it back. Find and Locate Your Money Contact your old employer Contact your old employer directly via their human resources department. They should have records of your current retirement-plan account and the associated assets. With the proper forms, you can roll over your retirement money to a different 401(k) or to an IRA, or to any outside financial institution overseeing your financial plan. By doing the appropriate instructions you get, you’ll be able to move your retirement money where you want. Refer to an old statement Old 401(k) statement will typically have the information you need to get in contact with either your employer or a plan administrator. Then, you can inquire about your options for moving money and get the information you need to do so. Hopefully, you’ve kept good records but don’t be shy to track these down online from your banks and investors. Search for unclaimed retirement benefits A private company handles the processing of retirement distributions nationwide set up the National Registry of Unclaimed Retirement Benefits. Since employers can have trouble finding former employees to claim their retirement benefits. This service will allow you to perform a free search for any retirement plan balances in your name. In order to appear in the database, your employer must participate in the service. Look for corporate mergers In case your former employer is no longer an independent business after being merged with another company, then your old 401(k) plan might have been merged into the new company’s 401(k) plan....

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Do You Qualify For The IRS Fresh Start Initiative?

Do You Qualify For The IRS Fresh Start Initiative?

By on Jul 15, 2019 in Tax Debt | 0 comments

The IRS Fresh Start initiative expanded several programs to help taxpayers struggling with unpaid tax debt as a result of the 2008 worldwide financial crisis. Some changes included the IRS increasing the threshold for filing a notice of federal tax lien from $5,000 to $10,000. Also, taxpayers are now allowed to obtain a lien withdrawal once their balance is paid in full or under $25,000 plus they must agree to direct deposits from their checking account for their installment payments. This is an important change since having a lien can hurt a taxpayer’s ability to obtain loans, obtain credit, or sell a property. This is why it matters, but let’s go back and understand what it is. What Is The Fresh Start Initiative? First known as the Fresh Start Program, the Fresh Start Initiative is not actually a program. It was simply a series of changes to current IRS Collection procedures and policies as outlined above designed to help both individual taxpayers and small businesses attempting to settle an overdue tax liability. In theory, the Fresh Start Initiative has features that make it easier for taxpayers to pay back their outstanding balances and avoid tax liens, or have existing liens withdrawn. How Long Has The IRS Fresh Start Initiative Been In Place? The 2008 economic crisis led to record numbers of unemployed Americans. In 2011, the IRS implemented the first of several programs to assist struggling taxpayers and it underwent some growth back in 2012. Therefore these programs offer collection alternatives to help resolve tax debt. The two major tax debt payment plans that were simplified under the Fresh Start Initiative include the Installment Agreement and the Offer in Compromise program. Altogether, these alternative options are known as the Fresh Start Initiative. How To Qualify For IRS Fresh Start Program? To qualify for the IRS Fresh Start Program there isn’t one set of requirements – it depends on the tax relief program you choose. The following are the general requirements most tax relief applicants must meet. Be warned that just because you qualify for a tax relief program doesn’t mean you should apply for it. Sometimes tax relief programs can cause more harm than good because of the stipulations...

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