I OWE INCOME TAXES
One of the most common reasons people will look for representation is that they owe income tax. There are multiple methods of resolving tax debt. It is important to look at the entire financial picture of the individual or business that has tax debt. Selecting a method of resolving the tax debt may not consider the calls from credit cards and the need to pay the mortgage. Most tax representatives look at only three methods, pay in full, an installment agreement, and settling for pennies on the dollar. You may be asking yourself at this minute why aren’t the tax representative looking at all of the remedies for the tax debt and what do these methods mean to me. Other methods have not been named above, and these are the different types of bankruptcies. Only an attorney can represent you in a bankruptcy.
What do the different methods mean to me. Obviously paying in full in a lump sum is the simplest and best method. However, you would not be looking here if you could pay in full. Therefore, how do I decide what to do to resolve my problems?
The first thing to consider is the unique financial picture that is yours. Do you only have a tax problem? Do you have other debt problems than the tax debt? The solution to your tax problem needs to consider all of your finances. The installment method and the offer in compromise only consider the tax debt. These two methods do not consider mortgage debt, other secured debt such as cars, credit cards, medical debt, judgments, student loans, and miscellaneous debts. A payment plan to repay income tax may take away the ability to repay other debts. A settlement offer or properly called, an offer in compromise, is based on the taxpayers ability to repay the tax debt and does not look at the need to pay other debts. The main methods of resolving your tax debt problems may not be appropriate if you have other debt problems. You need a representative experienced in analyzing finances and having expertise in taxation and debt management. IRS methods of repaying tax debt are just like shooting an arrow. The arrow will deal with the IRS or tax debt but won’t handle medical bills. Most tax representatives only help taxpayers at the IRS or the other taxing authority. You need an experienced attorney to help you with your finances.