Tax Debt
- What is included
- How to resolve
- Who can help
A tax debt does not only include taxes, it also includes assessed and accrued penalties and interest. When you are assessed taxes, penalties and interest are also assessed on the tax due, this is the UBA, unpaid balance of assessment. These penalties can include failure to pay and failure to file. Next, the UBA then accrues penalties and interest until the balance is paid, this is why it is good to get the payoff balance for various dates, because it changes daily. Just paying the tax after filing does not resolve the balance, because the penalties and interest are still owed. Never forget that an extension is only for filing, not paying, the taxes are still due April 15.
There are 6 options available to resolve one’s tax debt: Bankruptcy, Offer in Compromise, Currently Not Collectible, Installment Agreement, Full Pay and the Liability. While these options are available to everyone, not everyone will qualify for all. For example, if you have the ability to full pay the balance or make payments, you may not qualify for an offer or bankruptcy or non collectible status. Some of these options also require that you be up to date with filing your returns. Like any creditor, the IRS/FTB would like to see you pay as much as possible towards the tax debt, so financial information may be needed to determine your ability to pay.
Every city has tax attorneys,CPAs and enrolled agents who can help resolve a tax debt, for a price. Be careful what you sign and how much you pay, not everyone can deliver what they promise. While my workshops don’t promise a resolution, they will make you more informed about the collection process and the options available. Even if you decide to go see a professional, my workshops will give you the knowledge needed to discuss and make informed decisions about your account. My workshops not only give you the opportunity to ask questions, but will provide you with some key questions to ask when you call about your account.
If you are ready to get a better understanding of tax debts, have questions or would like to attend a workshop, please call Collection Alternatives.