No taxpayer relishes in the idea of being in debt to the IRS, California FTB, or other tax agency. The only thing worse than being in tax debt of any type is facing significant debts that have accumulated from months or years of fines and penalties on top of the original debt. For many taxpayers, a situation like this can make them feel powerless and as if their life is spinning out of control. However, you don’t have to fear the unknown or the potential consequences of tax debt if you seek experienced legal guidance as soon as is  practicable.  

A Sacramento tax lawyer of the NewPoint Law Group is proud to serve Californians in and around the Sacramento area with routine and pressing tax concerns. From our Roseville and Folsom law offices, we can assist with an array of tax concerns and tax debt situations. To schedule a confidential consultation with our California tax attorney, call 1-800-358-0305 today or online.

What Can Happen if I Don’t Fix IRS Tax Debts?

Taxpayers who fail to file their taxes may face an array of actions by the IRS. Most of these IRS actions are intended to secure the debt or to improve the IRS’s collection potential on the unpaid taxes. For instance, the IRS may choose to record a tax lien against your property. The tax lien secures the debt and improves the IRS’s ability to collect on it. Alternatively, the IRS may elect to levy your property or assets. While a lien merely records the IRS’s claim, a levy is the actual legal process by which your property can be seized to satisfy a tax debt.

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Taxpayers who fail to take action regarding tax debts often face a lien or levy. While certain limited options may be available to address a lien or levy, it is typically advised to avoid the situation entirely. Under new guidance announced by the IRS, taxpayers who were not previously eligible for certain forms of relief may now qualify.

Further Expansion of IRS “Fresh Start” Imitative Places Tax Installment Agreements Within Reach for Many Taxpayers

Starting with the “Fresh Start” initiatives, the IRS piloted an approach to collection of tax debts that included encouraging tax payers to voluntarily come forward and set-up payment plans in exchange for favorable repayment terms. This approach has been enormously successful for the IRS and for many taxpayers. Over the course of the last five years, installment agreements set up with automatic payment components has increased by more than 100 percent. Taxpayers who successfully sign up for qualifying installment payments can avoid the imposition of additional penalties and interest.

Eligibility for the installment agreements has been expanded through a temporary IRS program. The program is expected to run through September 30, 2017, but the IRS may modify or extend the program. Changes to the program  increase access to tax debt relief:

  • The new program provides for extended repayment terms. Whereas the previous maximum length of a repayment plan was 72 months or 6 years, the new program increases maximum repayment plan term. Now, payment plans can last for up to 84 months or 7 years. This means that taxpayers can make lower monthly payments over a longer duration.
  • There are limits on the amount of tax debt one can hold and still enter into the installment agreement program. Previously, taxpayers with up to $50,000 of tax debt could qualify. Under new rules taxpayers with up to $100,000 in tax debts are eligible.
  • Taxpayers who owe more than $50,000 but less than $100,000 in tax debts are now exempted from requirements that would have otherwise mandated extensive financial disclosures.

Expanded eligibility criteria to enter into an IRS installment agreement means that tax relief is within reach of many taxpayers. However, all relief described above is contingent upon a taxpayer being accepted into the program and voluntarily setting up an automatic direct debit or payroll withholding for payment.

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Work with Experienced Sacramento Tax Attorneys

Payment by an installment agreement is only one form of tax debt relief available to taxpayers. While it is an effective approach for many, an experienced and strategic Sacramento tax attorney may be able to shed light on other tax relief options which produce even more favorable results for the taxpayer. To schedule a confidential tax debt consultation at our Folsom or Roseville offices, call the NewPoint Law Group at 1-800-358-0305 today.