How Do I Pay My California Tax Debt?
The IRS can take your property, or refer your case to the Justice Department if necessary. It can be very stressful to pay back taxes. The IRS is willing to work with taxpayers in order to reach an agreement that allows them to pay their debt on reasonable terms. Contact an experienced Sherman Oaks lawyer for assistance in settling tax debt. Although it can seem impossible to deal with large amounts of back taxes, there are options. Tenina Law can help you settle tax debts in California.
There Are Many Options For Managing Your Tax Debt
To manage tax debt, there are many options. You should contact the IRS immediately if you owe back taxes or have not filed income tax returns. This will prevent you from accruing additional tax penalties.
If a debtor fails to pay its taxes, the IRS has many options. The IRS can place a federal tax lien against the property or business of the debtor. The tax lien would place a tax lien on the taxpayer’s property and allow the IRS to levy it if the taxpayer has outstanding tax debt. The IRS prefers to work with taxpayers to pay off their debt.
Here Are Some Ways You Can Settle Tax Debt.
California Offers Compromise
A California offer in compromise (OiC), is a negotiation between the IRS and a taxpayer to reduce a portion of a taxpayer’s debt. This option is usually chosen by debtors who cannot afford to pay all of their back taxes but have sufficient income to make smaller payments. The IRS considers many factors when determining whether a taxpayer is eligible to receive an OiC.
- The income level of the taxpayer
- The taxpayer must keep track of the monthly expenses and other debts.
- The ability of taxpayers to pay off their tax debt
- The assets of the taxpayer
- Check whether the taxpayer’s current income tax returns are available
- How long the taxpayer is involved in bankruptcy proceedings
A taxpayer can choose which type of payment they want to make if their California offer in compromise is approved. If the taxpayer decides to make lump-sum payments, they will need to make a large payment along with their original application. The taxpayer must pay the balance of the amount due in five or fewer payments if the application is approved. You could also make periodic payments for a longer time period.
Fresh Start Initiative
The IRS has passed the Fresh Start Initiative in 2012 to help taxpayers who have fallen behind with their taxes. This program gives debtors the opportunity to pay off their tax debts and have the tax lien removed from their property. Or, to avoid a tax lien entirely. The Fresh Start program offers many other benefits:
- A significant rise in the threshold for tax debt could result in a lien being placed on your property ($5,000 – $25,000).
- The process of removing a federal tax lien from your property can be simplified.
- You can get an installment agreement to help you pay your debts.
You may also be eligible if your company has fallen behind in tax payments the first time.
We can help you find out more about the Fresh Start Initiative or other options to settle your IRS debt. We will discuss your goals and help you choose the best option to eliminate tax debt. We can help you file for an offer of compromise or an installment agreement.
For help with your back taxes, contact our Sherman Oaks tax lawyers
Contact a Sherman Oaks tax lawyer today if you or your family member require legal assistance to manage tax liability. Tenina Law’s dedicated legal team has decades of experience in tax law matters. We are ready to apply this knowledge to your case. We can help you manage your tax debt to give you financial freedom. Tenina Law can help you with your tax situation.
This article was written by Alla Tenina. Alla is a top tax attorney in Sherman Oaks in Los Angeles California, and the founder of Tenina law. She has experience in bankruptcies, real estate planning, and complex tax matters. The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.
