Need Help with Tax Debt?
Tax Relief Attorney in Morristown NJ Personalizes Solutions for Income Tax Forgiveness
If you owe back taxes, you know that the Internal Revenue Service (IRS) is a persistent and powerful creditor. Between collection notices and the threat of more serious actions, will you ever get out from under your tax debt? Fortunately, there are several programs for tax debt help that may be available to you. You may also be eligible to discharge some of your tax debt through bankruptcy or settlement. An experienced New Jersey tax relief attorney may help you choose from the various alternatives and do it correctly.
The legal team at Ast & Schmidt, P.C. deals with debt relief cases. We have more than 40 years of combined experience helping people in Budd Lake, Flanders and all of Morris County find the best solutions to their debt problems. This includes IRS tax debt. Dealing with IRS collections can be difficult, but having a qualified Morris County tax relief attorney shifts some of your stress. No matter what tax debt issues you have, our lawyers find the best solutions to get finances back on track.
What Happens If I Cannot Pay My Income Taxes?
There are all sorts of reasons for falling behind on your taxes. Big expenses like emergency medical bills or a death in the family can leave you without enough extra cash to pay your taxes. Sometimes, receiving an influx of money from an inheritance or other taxable gift can help you pay off some of your debts, but it may also prove problematic during tax season. You might even owe taxes after a successful debt settlement agreement, as forgiven debt is treated as income and may be taxed.
No matter what caused the income tax debt, there are several steps the IRS can take to try to recover that money from you. If you cannot pay your taxes, you might find yourself dealing with:
- IRS Notices. Before the IRS does anything else, they will send you a notice informing you that you have not yet paid your taxes. Never ignore these notices! The sooner you face your tax debt problem; the sooner you can resolve it.
- Interest. Your unpaid taxes will continue to accrue interest until you are able to pay or discharge them.
- Penalties. The IRS may add late fees and other penalties to what you owe, especially if you have unfiled tax returns for several years.
- Lien. A lien is a claim to your property that the IRS can file. Once a tax lien is filed, it may be more difficult to resolve your tax debt.
- Levy. A lien is only a claim to your property, while a levy is property seizure. The IRS can levy your wages, your savings, your retirement funds or any of your other assets for unpaid taxes.
- Wage garnishment. The most common form of a tax levy is wage garnishment. This involves the IRS claiming a portion of your paycheck every week as payment toward tax debt. You may be able to stop a wage garnishment by entering into tax negotiation with the IRS.
Contrary to popular belief, you will not be sent to jail for mere non-payment of your taxes. If you are dealing with any of these tax debt concerns, or if you fear you soon will be, our tax settlement attorney can help. You have options. You may be able to reduce what you owe or work out a payment schedule that will keep the IRS from taking drastic collection actions.
What Are My Best Options for Tax Debt Relief?
In recent years, many people have found themselves unable to pay their federal income tax debt. The IRS created several programs to help you pay your back taxes in a way that works for you. Some of the best strategies to stop the IRS collection efforts and to eliminate the tax debt include:
- Temporary Delay or Hardship Suspension. If you cannot pay your taxes immediately, but expect to be able to do so in the future, you can delay IRS collections by filing for a hardship suspension. The IRS will not come after you for payment while the suspension is in place. However, you will be responsible for your taxes once your financial situation improves.
- Installment Agreement. If you cannot pay off all of your taxes at once, the IRS will allow you to make payments based upon your ability to pay. However, your tax debt will continue to gather interest.
- Partial Payment Installment Agreement. In certain cases, you may be able to work out a schedule of payments for a smaller amount than you actually owe in taxes.
- Offer in Compromise. Similar to debt settlement, an offer in compromise allows you to settle your tax debt for less than the total amount. You will make one lump sum payment to the IRS in exchange for forgiveness of the entire debt. However, the IRS does not have to accept your offer. Additionally, you must file your tax returns for the next five years and pay your taxes on time or the IRS will default you on the settlement. As everyone knows, negotiating with the IRS is never easy.
- File for Bankruptcy. You may be able to discharge all or some of your tax debt in bankruptcy. If some of the debt is not dischargeable, you may be able pay it in a Chapter 13 plan over a period of up to 5 years. Discharging other debts in bankruptcy can allow you to free up income to put towards paying your back taxes.
- The Innocent Spouse Rule. If you filed a joint tax return with your spouse or former spouse, you may be able to get debt protection under the innocent spouse rule.
- IRS Back Taxes Statute of Limitations. The statute of limitations on income tax debt is ten years from the date that the IRS assesses the taxes. There are some events that suspend the running of the ten years which include filing a request for an offer in compromise and filing a bankruptcy proceeding. This means the IRS will no longer be able to collect money from you after that time runs out. However, ten years is a long time to wait. Generally, it is best to evaluate your options for debt relief to avoid more serious consequences such as IRS liens or levies. Also, the statute of limitations for back taxes does not apply if the IRS establishes that a taxpayer failed to file, falsely filed or was attempting to willfully evade paying taxes. Tax fraud can come with criminal charges.
If none of these strategies are right for you, there may be other alternatives you qualify for to help you pay the IRS. These may include seeking penalty relief and other IRS Fresh Start Program options.
Contact a Tax Settlement Attorney in Morristown NJ Today for a Free Consultation
Helping New Jersey residents manage their debt is what we do. Thus, you can be sure we know all possible tax debt relief options available. Whether you need help to stop wage garnishment or levies, our debt relief law firm can help. If you are struggling with too much federal or state income tax debt, our tax relief attorneys can help.
In the past, our firm has assisted clients from Cedar Knolls, Whippany, Rockaway and Dover to resolve their back taxes. No matter where you live in New Jersey, we can meet with you during a free initial consultation. Contact us online by submitting a case review form. Otherwise, call our office at (973) 984-1300 to speak with a tax relief attorney for free at our firm today.