Unpaid tax issues are some of the things we may want to wish away, but unfortunately, they can’t go away on their own. The worst you can opt to do is ignore your tax obligations because the IRS has a legal mandate to collect what you owe them.
It is advisable to deal with unpaid taxes when you still have time and options. Plymouth bankruptcy attorneys can thoroughly review your situation and assess the options available to you. You may not have to cringe every time your phone rings.
How Can I Make Sure that My Unpaid Tax Figure is Accurate?
Sometimes, the alleged tax bill is higher than what you owe. It would also mean that the penalties are higher than they should be. The mistakes usually happen when the tax return on the CP2000 notice doesn’t match the income information with the IRS.
It is also common not getting all the deductions and credits you are entitled to. Any time you fail to file your returns, the IRS files them for you based on limited information from banks and employers. A Massachusetts tax resolutions attorney can ensure that your unpaid tax is accurate before considering relief options.
How Do I Know if I Qualify For a Tax Waiver?
The circumstances under which Massachusetts residents can get a waiver for their tax penalties are limited. Massachusetts residents can explore this avenue if they qualify for a waiver.
If you had been paying and filing all your tax returns on time for the last 24 months, you might qualify for relief. Regardless of whether or not the failure to file is beyond your control, you can use these grounds. However, you need not have applied for a similar waiver within the last 24 months.
Circumstances Beyond You
Sometimes, an underpayment or complete failure to file or pay by the due date can result from a situation beyond your control. Conditions that may not qualify for this type of waiver include:
- Not receiving the return in the mail
- Being unaware that the taxes are due
- Lack of funds
To find out whether you can explore this option, consult with a Plymouth IRS tax settlement attorney to know whether you qualify or not.
Does Abatement Clear Everything?
Even if you qualify for an abatement/reduction, it might not wipe all the financial commitments related to the tax. You can get an abatement for:
- Late filing penalties
- Late payment penalties
People with unpaid taxes, however, might not get a waiver for:
- Post-amnesty penalties
- Collection fees
- Interest assessed at a statutory minimum
What is the Application Process for Tax Waivers?
Requests can be in writing or can be sent electronically. The procedure might be technical, but a Massachusetts tax resolutions attorney can help you out.
One can only request abatement after they have been billed. The applicant should send it through the address listed in the notice. It should:
- Contain facts that show reasonable cause for abatement
- Have a signed declaration made under penalties of perjury
- Be signed by the taxpayer, their representative, or any other person whom the penalties have been assessed against
What Happens if the IRS Denies a Waiver Request?
Once you apply for abatement, your request can be:
- Partially approved
If denied, you might have to pay the penalties. Failure to pay the fines can attract further penalties in the following percentages:
- 56% for failure to pay penalties imposed for failure to pay taxes on time
- 14% for failure to pay penalties imposed for failure to file a tax return on time
- 4% for failure to pay penalties imposed for failure to pay business or employment taxes on time or paying them incorrectly
Many taxpayers may not have the money to pay the unpaid taxes and the penalties all at once. Yet further delays attract even more penalties. But with the guidance of a tax resolutions lawyer in Plymouth, MA, you can explore the option of a payment plan.
How Does a Monthly Payment Plan Work?
While a monthly payment plan may not stop interest from building up, it can significantly ease the burden. If you agree on an installment agreement with IRS, your failure to pay the penalty can be reduced by half. As a result, the interest will also be less expensive.
Different installment agreements come with different terms. Your Massachusetts tax attorney can help you evaluate the option that can work best for you. After that, they will set up an agreement with IRS.
How Long Does IRS Take to Collect Unpaid Taxes?
Depending on your financial situation and the steps you take to remedy the unpaid taxes crisis, the IRS has the option of collecting from you or your business.
However, the collection can be suspended if:
- An installment agreement is being considered. And if it is rejected, the collection will still be suspended for an additional 30 days.
- You live outside the United States continuously for six months.
- The bankruptcy’s automatic stay covers the period to be collected. An additional six months might be added after the automatic stay lapses.
- You request a Collection Due Process Hearing. It will last until the Tax Court gives a final decision or until the issuance of a Notice of Determination.
- You file an Innocent Spouse Relief. The IRS might wait 60 days from when the Tax Court gives a final decision or 90 days from the day you are issued the Notice of Determination.
Attorneys Dedicated to Getting Your Life & Finances Back on Track
Whether you are struggling with debt or not, the unpaid taxes penalty can be a blow to your financial well-being. Remember that these penalties accumulate interest as time goes by, and the longer you leave it unresolved, the more you might have to pay.
Massachusetts residents have options to remedy their unpaid taxes problem. But one needs the help of a seasoned tax settlement attorney to explore the most appropriate path. Talk to us today to discuss your financial dilemmas.