If you have fallen into debt with your taxes, it’s understandable that you might be attracted to the idea of tax debt relief. But, before you jump into something that could cost you more in the long run, there are some things that you should know.
Recently, scam artists have begun to prey on people who owe back taxes. And, unfortunately, many of these scammers have successfully swindled unsuspecting victims out of millions of dollars.
In 2016, the Treasury Inspector General of Tax Administration released a statement warning taxpayers to be wary of people claiming affiliation with the IRS and asking for money. At that time, these scammers had collected over $50 million dollars in fraudulent funds.
Do you need tax debt help?
Find out how to protect yourself and get the relief you need in our tax debt help guide!
Your Guide to Getting Legitimate Tax Debt Help
If you owe back taxes, you might feel pressured by companies promising to settle your debt for “pennies on the dollar”. While there are legitimate ways to settle your tax debt, this industry is also full of people trying to get rich off of others’ misfortune.
While you should not be discouraged from paying the IRS any money that you owe them, you should also be careful that you don’t make a desperate decision without knowing the facts.
How Tax Scams Work
Understanding how these scammers work can help you to avoid becoming their next victim.
One of the ways taxpayers get scammed is by the companies who advertise their capability to drastically reduce tax debt. Often these companies will ask for an up-front payment, then do nothing to provide the client with the services promised. In the end, the client loses the fee that they paid and are worse off than before.
Other scam artists have come up with ways to contact taxpayers, disguising themselves as the IRS. They claim that you qualify for a tax settlement program, and proceed to work out a payment plan to collect funds on behalf of the IRS. The funds never make it to the IRS, but instead go directly to the scammer.
What Happens if You Don’t Pay Your Tax Debt
Considering the high rate of fraudulent activity associated with owing back taxes, you might be tempted to ignore the debt you owe.
However, this is usually not the best route to take. There can be severe consequences if you refuse to pay your taxes.
The IRS has the power to pursue the money that is owed to them in a variety of ways. They can garnish your checks, or might even place a tax lien on your account. A tax lien is a claim filed by a governmental agency which gives it a legal right to your assets or property.
More often than not, it’s possible to avoid harsh actions taken against you by the IRS. But, in order to do this, you should address any debt that you might owe them as soon as possible.
How to Get the Help You Need to Settle Your Taxes
If you owe back taxes, don’t panic. There are options to help you get back on track.
Certain taxpayers that qualify might be able to receive services from a Low Income Taxpayer Clinic. These are part of a federally funded program to help those who face extreme financial hardship or poverty. You might also qualify if you speak English as a second language.
There are also other ways that you may be able to settle your tax debt with the IRS even if you don’t qualify for a Low Income Taxpayer Clinic.
Additional Options for Settling Your Debt
First, you should contact the IRS directly once you have received a notification alerting you to the taxes owed.
Then, there are a few different possibilities that you might want to consider.
You can attempt to negotiate with the IRS to set up an installment plan, where you agree to make payments against your debt on a regular basis until the amount you owe is satisfied. Or, you might be able to enter an agreement known as an Offer in Compromise, which settles your IRS debt for an amount less than what you owe but is subject to strict requirements laid out by the government’s agencies.
Finally, there is the option to delay collection, which means that the IRS agrees to give you more time before they pursue collection of the debt owed.
Are You Concerned About Money That You Owe the IRS?
When you owe the IRS money, it can be overwhelming. You may not fully understand your options, or how the tax collection process works. You may be worried that you will have to face penalties, fines, or worse.
Luckily, you don’t have to figure everything out on your own.
If you are aware of taxes that you haven’t paid, we can help you make sense of your dilemma and choose the option that’s best for you.
Don’t put off facing your back taxes. This could land you further in debt or create greater consequences for you to face. Instead, let us help you come up with a solution to get you the tax debt help you need so you can move forward with a peace of mind.
Want more advice on how to settle the debt that you owe the IRS?
Check out this post to learn how to get out of tax debt and start regaining your financial freedom today!
Mark Badkar
