Are You a Victim of Tax Identity Theft? If you’re a victim of identity theft, thieves can do a lot to ruin you financially.
Aside from draining your bank account, getting treatment from your insurance, and shopping through your credit cards, they may also mess up your tax records by claiming fraudulent refunds. Identity thieves use a variety of sneaky methods to steal information, such as sending you phishing emails or making phone calls seemingly from legitimate sources such as banks or government agencies. How Will a Tax Lien Affect Your Credit Score? Tax liens are no joke.
Aside from threatening your properties and assets, a tax lien can also make your credit look even worse. IRS Tax Liens vs. Mortgage—Which Takes Precedence? The Internal Revenue Service (IRS) is legally authorized to place a lien against all assets owned by a taxpayer, including his real estate properties, if he fails to pay his overdue taxes within 10 days upon receipt of formal notice of debt.
Although the IRS has the right to claim any of the debtor’s assets, however, it does not take precedence over previously recorded liens. If the IRS files a lien on your home, it still cannot undermine your mortgage lender’s right to recover your unpaid balances through foreclosure. The IRS may seize and foreclose your home but it has to pay your mortgage lender the remaining amount you owe. Why You Should Not Deal with the IRS Directly. Getting mail from IRS can strike terror into the heart of any taxpayer, especially those who know that they’re knee-deep in debt.
Negotiating with the IRS: 3 Blunders to Avoid. Taxpayers on the IRS ‘watch list’ know just how intimidating the agency’s enforcers can be.
Yet rather than face their tax debt problems head on, most people tend to shrug it all away. Some taxpayers, however, are brave enough to address their situations. Then again, only a few know which mistakes to avoid when negotiating a settlement with IRS. Not considering the possibility of an error. IRS employees deal with mountains of forms each day, so there is always the possibility of human error. Not providing accurate information in the forms. Not ensuring current tax compliance. Tip from a Tax Attorney: Don’t Ditch Your Tax Debt. IRS “Currently Not Collectible” Status—Until When? In majority of cases, the IRS will not stop collecting from you until you’ve fully paid your tax debt.
This means that you must file all missing tax returns and any deal with ongoing underpayments. With the help of IRS tax lawyers, however, you can file for a “currently not collectible” (CNC) status to stop the IRS from sending letters of notification, filing levies against your properties and enforcing collections so you can live in peace—even just temporarily. To apply, the IRS Form 433-A or 433-F is submitted along with a detailed financial disclosure showing your assets, expenses, and income, which may include car loan statements, mortgages statements etc. Such forms serve as an information statement proving that you’ll undergo financial hardship if the IRS continues its collection.
Three Tax Relief Myths to Avoid. When it comes to problems with the IRS, you’re never really off the hook.
Squaring Off Against the IRS: Know Your Rights. Receiving a letter from the Internal Revenue Service regarding back taxes owed is a nerve-wracking experience.
After all, the IRS has a reputation for not messing around. This is why you should report to the nearest IRS office and schedule a meeting with an IRS auditor ASAP. Meeting with an IRS auditor can feel eerily similar to being interrogated at a police station. Fortunately, you also have a set of rights that protect you from making your situation worse. These rights include: Federal Taxes and a Tax Lien. How to Find the Right Tax Relief Firm. As a small business owner beset by tax problems, it can be very hard to overcome the obstacles set by such issues.
With miles of paperwork and serious record-keeping needed, is there any hope for a small business to stay afloat? Fortunately, you don’t have to go at it alone. There are various tax relief firms that help small businesses handle their monetary woes. However, this doesn’t mean you can simply pick the first firm you come by. When choosing a tax relief business to work with, be sure to answer the following questions: Does the firm have plenty of knowledge and experience? You need to confirm that the firm you plan on working with knows your market and is fully capable of handing out expert financial advice. Income Tax was Once Unconstitutional. Did you know that, at one point in American history, income tax was deemed unconstitutional?
Prior to the Civil War, the economy relied on taxes from products like tobacco, spirits, precious stones, jewelry, and property. It would've been the case for a longer time, if not until now, had it not been for the decision to rely on tariffs for income from these products. When the Union and the Confederacy started taking pot shots, the Union needed a new source of revenue. This resulted in America's first income tax law in 1862, where people earning between $600 and $10,000 ($14,300 and $239,000 in today's dollars) were taxed at a rate of 3 percent. This, along with other taxes, helped internal revenue swell to $310 million. The problem at the time was that social activists weren't going to take this sitting down. In 1895, the U.S. Tax Lien vs. Levy: How They Affect Your Business. When you can’t pay your back taxes and you don’t respond to the collection notices or summons from the IRS, a tax lien or a levy can be slapped upon your assets.
These two debt collection instruments are often confused with each other, quite understandably given that their differences aren’t too stark. OIC for Your Business: 2 Things to Understand. Settling Your Debt with the IRS—3 Important Tips. Has the IRS been in touch plenty of times to urge you to pay your back taxes? Have you been procrastinating on repaying your tax debt? You shouldn’t ignore their correspondences. Can You Stop Wage Garnishment by the IRS? How? Is the IRS regularly taking a portion of your income to satisfy your tax debt? The wage garnishment can soon take a toll on your daily finances and prevent you from keeping up with your regular expenses and bills. Two Ways to Stop an IRS Wage Garnishment.
If you ever receive a notice from the IRS saying your wages will be garnished, take note that there is no limit to the amount of they can deduct from your paycheck. In fact, apart from your tax exemptions, they can take it all. So how much will the IRS take away, and how much will you be able to keep? Take a look at the exemptions on your W-4 form—this will state the monetary amount that the IRS can’t take from you. Three Frequently Asked Questions About Tax Liens. Dealing with IRS Tax Liens. Unpaid taxes continue to cost the U.S. economy hundreds of billions of dollars, with most debts being left unpaid or only partially paid. In response, the Government Accountability Office (GAO) submitted in 2012 a report to Congress proposing that the Internal Revenue Service (IRS) report outstanding tax debts to credit bureaus to improve tax collection. There’s no word of when the IRS will standardize this practice, let alone whether or not the agency plans to do so.
Tax debts normally don’t reach credit bureaus as part of their policy to safeguard sensitive information.