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Taxes

4 Reasons Why the IRS Might Deny a Payment Plan

4 Reasons Why the IRS Might Deny a Payment Plan

By on Jul 2, 2019 in IRS, Taxes | 0 comments

If you’ve been following our advice, then you know that one of the top services that Success Tax Relief offers is affordable installment payment plans with the Internal Revenue Service (IRS). We take pride in these plans and how many customers we helped. In addition, if the IRS is giving you trouble, we will do your best to mediate and find a viable solution. Why The IRS Does Payment Plans At the fundamental level, the IRS sees payment plans as profitable. They want taxes in a reasonable amount of time, and a payment plan allows them to see staggered installments. The working theory is that the individual who owes taxes want to be honorable and honest, and an affordable amount means they will honor the debt. Thus, both parties will be happy. Now 99% of the time, we’ve been successful in helping taxpayers pay a reasonable monthly amount to the IRS without breaking their bank. However, there is that 1% where other solutions will need to be sought out because the IRS has denied a payment plan for one of our clients. They realize that the deal doesn’t benefit them, and they’d rather have the full amount on time. Reasons For Denying An IRS Payment Plan Bear in mind that we communicate with the IRS on our clients’ behalf. We arrange for all of the necessary documents to be presented to the IRS so that they can review your case. Even so, the IRS auditors are the ones who make the final decision. We are your mediators, messengers, and negotiators. But we cannot guarantee that an auditor decides to make a different decision. You can call the IRS to plead your case or fill out Form 9423 for an appeal. Even so, it may not be enough. The auditors are the decision makers. They can still reject you. The IRS rules also constantly change. We can keep up with the updates, but sometimes we get goalposts moved for our clients. All we can do is explain the possibilities that you cannot receive a payment plan, and we have to look into alternative solutions. It is essentially up to the IRS to determine the terms of your tax case. Technically,...

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How Early 401K Withdrawals Can Affect Your Tax Return

How Early 401K Withdrawals Can Affect Your Tax Return

By on Feb 4, 2019 in Taxes | 0 comments

Your 401(k) retirement account is an excellent way to save for your retirement and some employers even match your contributions, giving you an extra boost for your nest egg. But, what happens if you come upon hard times before you retire and need to cash in some or all of your 401(k)? Accessing these funds before you are 59 and a half may help you in the short term, but keep in mind that there are tax consequences for tapping into your retirement early. You want to make sure that you take these consequences into account ahead of time so that you are not hit with a hefty tax bill come April that creates another financial problem for you and your family. Increased Taxable Income If you withdraw funds from your 401(k) before retirement, these funds become taxable income that’s added to your regular annual income. This is primarily because the contributions were not counted as taxable income when you put them into your retirement account. It is also possible that this additional taxable income can push you into a new tax bracket, also causing you to owe more to the IRS. Early Withdrawal Penalties When you take money out of your 401(k) early, you also will likely have to pay a penalty for doing so on top of paying the taxes already discussed. Most often, the penalty you’ll pay to the IRS is 10% of what you withdraw from your retirement account. So, if you take $10,000 out of your 401(k), you will have to pay the IRS an additional $1,000 for the early withdrawal penalty. Expectations… There are some exceptions to the early penalty rule that you should be aware of. In these cases, you can take out as much as you need without penalty: If you have a permanent physical or mental disability that a physician can sign off on and can thus no longer work, you can take IRA withdrawals without penalty. If you lose your job and collect unemployment compensation for 12 consecutive weeks, you can take penalty-free IRA distributions if you use the money to pay for health insurance for you or your spouse or dependents. The contingency to this is that you...

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How to Write a Letter of Explanation to the IRS (with samples)

How to Write a Letter of Explanation to the IRS (with samples)

By on Jan 4, 2019 in Taxes | 0 comments

If you have received a written notice from the IRS requesting an adjustment to a recent tax return, requesting additional documentation for your return, or if the IRS sends notice that your payment is late, you need to know how to respond appropriately.  Keeping the lines of communication open is key to a successful resolution of nearly all tax issues.  While putting your response in writing might sound like a daunting task, it is very likely to be the best and most effective way to respond to the IRS. There are several key things to remember when writing your letter of explanation to the IRS: (Template available at the bottom)   1. Understand Why You Are Receiving the Notice These notices or letters explain the reason for contact and give you instructions on how to handle the citation. If you have no reason to dispute the claim that has been made, then you won’t have to write a letter at all! However, if response is required, learn more by using the notice or letter number provided and enter it on this page. Here you will be provided with more information and related FAQ. You will find this notice (CP) or letter (LTR) number either on the top or the bottom right-hand corner of your correspondence. The IRS sends notices and letters for the following reasons: A due balance. A change in your refund amount. Questions regarding your tax return. To verify your identity. Additional information is required. A notification of processing delay.   2. Beware of Fake IRS Letters Never trust a letter just because it says ‘IRS’. Many tax scammers will design a notice to exactly like it came from the IRS in order to steal your personal information. With a social security number they could even steal your identity. The IRS does not ask for personal information via email or social media, but even if you receive a letter, it is safer to get in touch for confirmation of its validity. Keep the letter or notice for future reference in case a second fake IRS letter is sent. Here are some ways to tell if a notice from the IRS is fake news: It appears to be...

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What Effect Can the Tax Reform Have on Your Debt to the IRS?

What Effect Can the Tax Reform Have on Your Debt to the IRS?

By on Oct 26, 2017 in IRS, tax reform, Taxes | 0 comments

When it comes to what you already owe to the Internal Revenue Service (IRS), chances are the principle amount may very well remain the same. It’s the interest and penalties fees that could change on an annual basis no matter who was elected president.  What You Really Need to Remember  The main rule of thumb to remember when it comes to paying your taxes is just to do it! Make the payments on time, and if for any reason, you suspect that you won’t be able to make the minimum payment or not at all, then call and convey this to an IRS representative so that he or she can possibly make some adjustments to your account that could prevent you from paying a penalty. Remain Diligent as a Taxpayer We understand that these days, emotions are running especially high in the arena of politics, but the professionals at Success Tax Relief urge you to stay calm and remain diligent toward your taxpayer duties and obligations and you shouldn’t have any problems. Now, when it comes to just understanding the tax reform altogether, CNBC has reported that the $2.2 trillion tax plan will ultimately benefit big business corporations. They further reported that what this means for middle-class homeowners is a spike in taxes that may rise at an average of $815.00. According to CNBC, the tax reform could possibly increase interest rates. Since there are interest rates in almost any area of trading, it’s uncertain to determine exactly where in the national finance sector interest rate will increase, but be ready nonetheless. Sources Report… According to the president’s campaign promises, the standard deduction will increase from $6,300 to $15,000 for single filers and $12,600 to $30,000 for married couples filing jointly. Fox News reports that the standard deduction would increase from $6,300 to $12,6000 for single filers and $12,600 to $24,000, roughly. These tax cuts are reported to help taxpayers by not having to itemize all of their deductions. However, CNBC states that ultimately, the tax reform is designed to take care of the wealthy. Don’t Hold Your Breath! As this point, everyone seems to be holding their breath in regards to how the tax reform will affect their...

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Georgia State Tax Relief Service That Will Get You Out of Debt

Georgia State Tax Relief Service That Will Get You Out of Debt

By on Oct 20, 2017 in Debt Relief, Tax Tips, Taxes | 0 comments

  Many United States taxpayers may sometimes forget about their obligation to pay their state tax debt. Typically, it’s included in most electronic filing software. For many filers, a refund is allotted to them and therefore, no debt is acquired. However, depending on the yearly income accrued the previous year, it is possible to owe the state tax dollars. Usually, the amount of state taxes owed isn’t that much. However, the amount owed can quickly increase when it’s neglected. Interest and penalty fees can balloon the amount owed into a debt that’s unmanageable. Unfortunately, how some taxpayers deal with such issues is just by ignoring it. That’s not the solution. What You Need to Know about Georgia Department of Revenue The fact is the Georgia Department of Revenue is very much like the Internal Revenue Service…they won’t ignore you! With every passing deadline comes another interest fee and penalty that’s tacked on the new amount from the last accrual of fees. It’s an ever-growing mound of debt that can go on for months until the Georgia Department of Revenue says enough is enough and takes other measures to collect what is owed to them. Such extreme measures the Georgia State Tax Service can include are wage garnishment, levying your property and/or bank account, and possibly even imprisonment. To avoid such extremities, you must first face the responsibility of paying the debt. Even if you don’t have the funds to take care of the entire debt right away, The Georgia Department of Revenue will work with you by either negotiating an affordable monthly payment agreement, reviewing an Offer in Compromise or a Request for Penalty Waiver. Monthly Payment Agreement If you don’t owe an egregious amount, but it’s substantial enough to prevent you from paying the balance in full right away, the Georgia Department of Revenue offers an installment agreement plan that you can apply for. The stipulations of the plan require that you’d have to pay the full balance within 36 months. In order for you to qualify, you cannot be assigned to a collection agency, you can’t have filed for bankruptcy, and you can’t have already filed for an Offer in Compromise. Offer in Compromise An Offer in...

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What Happens to Your Tax Debt When You File for Bankruptcy?

What Happens to Your Tax Debt When You File for Bankruptcy?

By on Oct 12, 2017 in Debt Relief, Tax Tips, Taxes | 0 comments

Many taxpayers are under the assumption that if they file for bankruptcy, this will clear them of every single debt they owe. That’s not exactly true. Now when you file for bankruptcy, it does temporarily stop the Internal Revenue Service (IRS) from collecting any tax debts. How long they stay away actually depends on what type of tax debt you have and which chapter of bankruptcy you’re filing for. All of this will have a direct affect on how your tax debt situation is handled. No One Said Bankruptcy Would Be Easy When it comes to tax matters, there’s really no easy way of explaining how things will work because each case is dealt with on an individual basis according to the taxpayer’s financial situation. That’s why it’s recommended to get some professional assistance in these matters because, let’s be honest, if you knew how the tax debt system actually worked, chances are you wouldn’t be in the situation you’re currently in. On the other hand, there are some professionals who may know exactly how everything works and still find themselves in a mess of debt due to sheer neglect. Experience = Expertise Success Tax Relief, a tax relief firm with two offices in Houston, Texas and Atlanta, Georgia, has been in the business of helping people out of the tax debt for over 30 years. Throughout this time, we have come across a wide range of tax debt cases that have given us the experience and expertise to alleviate any tax issues that you have big or small. So What Will Happen to My Debt if  I File for Bankruptcy? So let’s talk about what exactly happens to your debt when you file for bankruptcy. When you file for bankruptcy, an automatic stay is created. An automatic stay is a court order that ceases creditors and even the IRS from taking any action toward collecting debt from you. Creditors will have to address the court and ask its permission to try and collect from you. So, don’t exhale yet! But let’s address the real question: Can your tax debt get wiped out if you file for bankruptcy? The answer is that it depends. Depending on the nature of...

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