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Brief Insights on IRS Tax Problems and Their Solutions

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Posted By Tom Clark

Every year, the governemtn expects the citizens to pay their taxes on time. But most people make this huge mistake of ignoring tax payments to the IRS. If you do not pay your taxes, penalties and interest amounts gradually start getting added up to it.

This amount accumulation further leads to various risks and tax problems like a wage garnishment or seizing of your assets by the US government and selling them at auctions. These are just the basic problems which you are aware of. But do you know the other severe consequences of not paying taxes?

Check out the various problems for state tax debts and their beneficial solutions.

Tax Problems Associated with IRS

  1. Unfiled and Unpaid Taxes

On failing to file and pay taxes, IRS can charge you a penalty interest rate of a minimum 5%. This interest amount is owed each month. The maximum penalty rate on the total tax amount is 25%. You might be surprised to know that penalties for unpaid and unfiled taxes are ten times more than due taxes. In case you are not sure of how to deal with the problem, you can seek help from the best tax lawyers.

  1. Tax Lien

The term tax lien is a term used by the government when they make a legal claim on the property of unpaid taxpayers. It is considered a last resort where a business or an individual is forced to pay back their taxes.

  1. Bank Levy

If you fail to pay your taxes on time, the tax authorities get the right to put a hold on your bank funds. They contact your bank to lock down your account and then seize your assets to cover the tax amount unpaid by you.

  1. Seize of Property and Arrest

To uncover your tax, the government has the right to take away your property and auction it away. But in certain instances and special circumstances, you may also be put in prison in addition to a penalty payment.

Tax Relief Solutions

Where there are problems, solutions are bound to be present too. Few solutions to tax-related issues are:

  1. Penalty Reduction

As per tax laws, if you have valid reasons for not paying taxes to the government for the required price amount, you can expect the penalties to be either reduced or removed. Seeking insights from a tax resolution lawyer is an ideal decision as the entire matter entails different technical aspects. A few of the reasons are like being a victim of fraudulent investment schemes or it is your first time not clearing your tax settlement.

  1. Payment Plans

This payment plan is considered to be a highly complicated and technical process. If you find paying a hefty tax amount difficult, you can follow up with IRS for an instalment agreement. In this case, you can pay your taxes monthly.

  1. Not Currently Collectable

According to not currently collectable, you can’t pay your debts if you are a taxpayer. In this case, IRS voluntarily allows the taxpayers a year to pay their debts. For many, this acts as a useful tool to pause the collection appeal and use it as a tax relief solution to prevent IRS seizure or levy.

With these, you now have an insight into various problems associated with IRS and their solutions. There are more problems and resolutions regarding tax settlement. It is better to avoid such consequences and undue hardship. And for this, it is advisable that you choose an excellent tax professional through an online medium to get your state taxes settled fast.

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