If you are one of the millions of taxpayers who owe back taxes to the IRS there are certain actions you can take to protect yourself from garnishment.
Portland, OR (PRWEB)
August 29, 2017
Finding out that your bank account has been emptied by the IRS for past-due taxes is a nightmare scenario. “If you are one of the millions of taxpayers who owe back taxes to the IRS there are certain actions you can take to protect yourself from garnishment,” said Clarke Balcom, founder of Clarke Balcom Law, a bankruptcy and consumer debt attorney in Portland, OR.
In order to assist those who owe back taxes, Balcom lists the following five tips:
No. 1: An Offer in Compromise (OIC) can be an effective tool to greatly reduce the amount one pays to the IRS to satisfy their tax obligation. “However, to submit an offer that will be accepted takes work and planning,” said Balcom. “This is not something an individual should do on their own unless he or she is financially sophisticated.”
No. 2: Innocent Spouse Relief. This may relieve one from additional tax owed if their spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits.
No. 3: Currently not Collectible status. “If you have very little income you may be able to get yourself placed on Currently not Collectible (CNC) status,” noted Balcom. “If you have CNC status, the IRS will not pursue you for back taxes that are owed.”
No. 4: Filing a bankruptcy. This will stop all garnishment attempts on an immediate basis. “And, under certain circumstances, individuals may be eligible to eliminate tax debt in full, or to eliminate tax penalties,” added Balcom. “Look for a bankruptcy attorney who is experienced in discharging tax debt through bankruptcy.”
No. 5: Payment plan. If an individual doesn’t have other options, the IRS is often willing to work out a payment plan that is affordable.
“People worry that if they file tax returns but don’t have the money to pay what is owed, they will be in a worse position with the IRS. But this is a dangerous misconception,” concluded Balcom. “Filing your taxes as close to on time as possible is important, as the IRS typically will attach a…