Many people put off doing their taxes, especially when instead of receiving a refund, they know that they’ll owe the Internal Revenue Service. Sometimes, people are so upset about having to pay more taxes that they don’t file at all. However, this apprehension only makes matters worse for them and their families. In addition to accruing late fees and penalties, the anxiety that comes with debt can destroy even the most level-headed taxpayer.
So what do you do if you know you’ll have to pay but don’t have the money to do so? As long as you keep a level head, you’ll be able to follow a strategy and successfully pay off your IRS debt.
The IRS doesn’t exactly have the best reputation for being understanding and empathetic. However, it does realize that not everyone has the financial ability to save a surplus of cash to pay off tax debt in one lump sum. This is why the IRS allows various repayment options such as an “offer in compromise”. However, these options are only available if you keep your cool when you’re addressed with the debt. This is why it is important to know the following tips to help you manage your IRS debt:
- Read the letter and acknowledge the debt. Although it may be frustrating to be in debt, ignoring the problem will only increase fees and penalties, making the debt even greater. Besides, it may not be as bad as you think, but you’ll never know until you open it and read it.
- Carefully read and understand the notice of debt. Each notice the IRS sends will have specific instructions to follow, such as how to provide more information and what actions to take.
- Double check your numbers. In order to be 100% certain of your debt, make sure you compare the IRS calculations with your original tax forms. Remember, even the IRS makes mistakes.
- Don’t ignore discrepancies. If your calculations differ from the IRS notice, write a letter to the IRS (make sure you’re informative, cordial, and respectful) explaining why you think there has been an error. Make sure to include any documents you want the IRS to consider and mail your reply with the bottom portion of the notice.
- Keep adequate records. Make sure to keep copies of all tax information (including notices, correspondences, and any information you may get from the IRS). These documents can be useful to explain discrepancies or future errors.
- Be alert for scams. With the age of technology comes the age of despicable scam artists. Although many tax-related scams occur over the phone or via email, some IRS notices have been known to be fraudulent. If you suspect your notice to be a scam, call 1-800-829-1040 or visit a local IRS office immediately. If you have questions about the authenticity of the notice, you can call or visit your local IRS office.
- Make a plan. Although you’ll need to pay your debt, if you can’t immediately afford the entire amount, you’ll need to come up with a repayment plan. A good plan allows you to be able to pay your daily necessities while also paying the debt. Do not use a high interest credit card as a solution as the debt will still remain and even worse.
- Get the help you need. The deeper you’re in debt, the more important it is to have an experienced lawyer giving you a helping hand. The sooner you resolve your debt, the better it is for you and your family. Contact the Law Offices of Travis W. Watkins today to see how we can help you climb out of debt and put your IRS problems behind you. Call us today at 800.721.7054 to secure your family’s financial future.