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Taxes

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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2 Circumstances Where a Tax Debt Can Be Forgiven

2 Circumstances Where a Tax Debt Can Be Forgiven

By on Oct 1, 2017 in Debt Relief, IRS, Taxes | 0 comments

Contrary to popular belief, the Internal Revenue Service (IRS) isn’t a money-hoarding monster. They will not take your hard-earned income and leave you homeless. With the IRS, you will have every opportunity to pay your tax debt off. First, you will receive multiple notifications informing you about the amount you owe. At that point, it’s up to you to take action. You can either take care of your tax debt responsibilities or ignore them. The professionals at Success Tax Relief, a tax relief firm based in LaPorte, Texas, does not recommend you ignore anything that comes from the IRS. The IRS certainly won’t ignore you! For some taxpayers, the amount owed can be easily taken care of. However, for others, the amount owed may be substantially large—so much that this might intimidate taxpayers into not dealing with the situation at all. Don’t do that. That’s how trouble gets started and this is where all those scary stories about the IRS could come true for you. The Truth The real truth is that you can control how the IRS conducts business with you. All you have to do is acknowledge the claim. Confirm it and then try to work out some type of arrangement where you can appease the IRS while not breaking the bank. Do this, and you may discover that there’s a chance that your entire tax debt may be forgiven! How Can You Get Your Tax Debt Forgiven? In order to determine whether or not your tax debt can be forgiven, it’s recommended to consult a tax relief consultant to help you better communicate with the IRS regarding such matters. You are more than welcomed to do it yourself; however, you may find yourself in a situation where you may be in over your head in regards to dealing with all of the red tape that’s involved with resolving your tax debt. Has Your Income Decreased? There are many reasons why your household income may decrease. If you have experienced any of the following, you may be able to present a case to the IRS about why they should consider forgiving your tax debt: Loss of job 401K drops in value Your business closes Your employer goes...

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Will a New Tax Bill Affect Your Debts to the IRS?

Will a New Tax Bill Affect Your Debts to the IRS?

By on Sep 28, 2017 in IRS, Tax Tips, Taxes | 0 comments

If you have unpaid debts to the Internal Revenue Service (IRS), you may wonder how a new tax bill may impact your existing debt. Tax problems can snowball over several years and before you know it, you find yourself in a situation where you have not filed your taxes for multiple years. Unfortunately, in addition to the actual debt owed, you will also accrue both interest and penalties on all unpaid debts to the IRS. If you have not yet been contacted by the IRS about your outstanding debt, you may still be able to resolve this situation before it escalates further. Strategies for Paying Off Tax Debt If you have any unpaid taxes to the IRS, new or old, your best bet is always to work to resolve it as soon as possible.  The longer you wait, the more you will owe, the more stressful the situation becomes, and the more pervasive the impact will be on your day-to-day life. Here are some of the most common and effective strategies for paying off your tax debt once and for all: Personal loan or credit card: If your debt is a manageable amount, you may want to consider getting a low interest personal loan from your bank or even using a low interest credit card to pay Uncle Sam and then make payments under the terms of the loan or credit card. Keep in mind that either of these options could have an impact on your credit if you stop paying back the debt. Negotiate with the IRS: If you are unable to pay the full amount you owe in a lump sum, you may qualify for an installment agreement, which allows you to pay your debt (along with penalties and interest) over time, rather than all at once. If you can prove that you are simply unable to pay the amount due, you can submit a request for an offer in compromise, which allows you to settle the debt for less than you owe.  Finally,  you can also apply for what is known as a 120 day short term agreement, that allows you to pay the balance off in 120 days. Consider bankruptcy: For an unfortunate few, bankruptcy...

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3 Ways to Settle a Large Tax Debt

3 Ways to Settle a Large Tax Debt

By on Sep 23, 2017 in Debt Relief, Tax Problems, Taxes | 0 comments

In 2016, the Internal Revenue Service (IRS) estimated that more than $450 billion went unpaid in taxes.  That is a staggering number that translates to millions of Americans holding onto an unpaid tax debt.  There are many reasons why an individual (or a business) might not pay their taxes on time—some of the most common reasons include being too busy, having an unexpected and/or disruptive life event (death in family, sudden illness, move, etc.) or simply not having the money.  Regardless of the reason for the tax debt, it’s important to focus on the best way to settle your debt before the IRS moves forward with additional penalties, wage garnishments and/or putting a lien on your property. Here are 3 common options for working with the IRS to resolve your unpaid tax debt once and for all: Offer in Compromise:  In some cases, when you cannot pay your tax debt, the IRS can settle your debt for less than the amount you owe.  There is an extensive application process to request an Offer in Compromise and you should be prepared to provide details about your financial situation. There is a $150 application fee to file for an offer in compromise. Installment Agreement:  An installment agreement allows you to pay your tax debt off in installments, rather than in one lump sum. This can be more manageable for individuals and businesses that do not have the full amount at the time that taxes are filed.  You are still responsible for paying the total amount (and any interest and penalties) but the IRS may let you make monthly payments to resolve the debt. Temporary Delay: If the IRS determines that you are unable to pay your tax debt, they might be willing to delay your bill.  During this delay, the IRS will monitor your ability to pay and may even file a notice for a tax lien to protect their interests. What If You Cannot Pay Your Tax Debt? Each of these tools can help you settle a large tax debt. However, deciding which to pursue based on your unique set of circumstances and completing all of the necessary paperwork can be overwhelming.  The team at Success Tax Relief can help...

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An IRS Installment Plan: Is It Really Your Best Option?

An IRS Installment Plan: Is It Really Your Best Option?

By on Sep 17, 2017 in IRS, Tax Tips, Taxes | 0 comments

If you have more tax debt than you can handle, you may be looking for options for settling this debt with the Internal Revenue Service (IRS) in a way that will not negatively impact your financial bottom line.  The idea of paying the IRS the full amount due in one lump sum can be overwhelming and impossible for many who do not have extra money in their savings account.  One option to consider is an installment agreement, which allows you to pay the IRS in monthly payments, rather than all at once. This can ease the burden and give you time to pay the full amount so that you and your family are more comfortable during the process. Here are some facts and tips about installment agreements that can help you determine if this is the best option for you: How much do you owe?  If you owe the IRS $50,000 or less, you will likely be able to get an installment agreement plan for 72 months just by making a formal request and without providing very detailed financial information. If you owe more than $50,000, you will have to provide additional information and negotiate with the IRS. Are your tax returns current?  The only way the IRS will agree to an installment plan is if you are current on your tax returns.  If you have yet to file previous year’s tax returns then you are not eligible for an installment agreement. Interest and penalties still apply:  It is important to note that even though you may be paying your debt to the IRS via an installment agreement, the IRS will still charge you both interest and penalties. This means that unless you can pay more than the minimum due, you may pay for years and still owe even more than when you started paying. Can you afford it?  It is also important to consider whether you can afford to pay the monthly payments that will be due with the installment agreement. If not, you may want to consider requesting an offer in compromise instead, which settles your tax debt for less than what you actually owe. Payment Methods:  If the IRS approves your installment agreement, you will be...

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Unpaid Business Taxes: How to Settle Your Debt and Avoid Bankruptcy

Unpaid Business Taxes: How to Settle Your Debt and Avoid Bankruptcy

By on Aug 31, 2017 in Tax Tips, Taxes | 0 comments

If your business is in danger of facing bankruptcy, there may still be a way to avoid it. The ramifications for a business bankruptcy is pretty dire and can affect not only your business, but other companies who are involved with you in hopes of improving their own efforts toward success. By declaring bankruptcy, you are opting out of paying your debts to these companies that are expecting money from you. This in turn affects their business’ bottom-line revenue, because now they’re taking a loss. Bankruptcy. Not Cool. Not Cool at All! Imagine if you loaned a friend $100 who promised to pay you back. That’s $100 that you’re expecting to put back in your bank account. You may have already spent that those funds trusting that your friend is going to make good on his or her promise—especially if there was a signed agreement that he or she signed. Then next month, they file for bankruptcy! What does that mean for you? It means that you’re out of $100 and if you jumped ahead and spent that promised money, then that snowballs into another debt that won’t get paid, or money taken out another stream of revenue to supplement the loss. Either way, it doesn’t look good for you. When you file for bankruptcy, you’ll suddenly understand the origin of the term, “You’ll never do business in this town again!” because no one will want to conduct business with someone who can’t successfully manage a business. Bankruptcy is Avoidable! One way you can settle your business debts is to negotiate with each of your debtors to accept a reduced payment to settle the loan. Many businesses will gladly accept that than nothing at all once they learn that you’re going out of business. In fact, they will appreciate your efforts of coming to them first trying to work something out rather than leaving them high and dry. This may sound pretty simple, but before you start making negotiations, you’ll first need to prioritize your debts. There’s still payroll and payroll taxes that need to be met as well as other business expenses like rent/mortgage, and utilities. Make a list of all the most pressing debts that your business...

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