Owing the IRS money is not a position anyone wants to be in. Unlike other creditors, the IRS is far more serious with their collection actions. For debtors looking to avoid trouble with tax debts, there are a few things that can be done.
Taking Control Of Taxes
While some tax debts can be discharged in bankruptcy, it is not a good idea to rely on the bankruptcy process for help. This is because the laws about which tax debts are eligible, and how these debts are managed if allowed in bankruptcy, are strict. Therefore, if you want to avoid tax debt problems and resolve them outside of a Tampa bankruptcy court, do the following:
Hire a tax professional – using a certified public accountant can ensure your taxes are prepared properly. Although some tax preparation services may offer cheaper rates, they often come with unlicensed employees who are well trained. Having a professional prepare your taxes for you can also reduce any risk if you were to be audited.
Review the details – always be sure to review your tax return for accuracy. Specifically, make sure your deductions and dependent claims are correct. Many people end up owing the IRS over small errors when even a minor detail is left out. If you plan to include deductions for things like student loan or mortgage interest, charitable contributions or out of pocket medical expenses, be sure you have the documentation to back up these claims.
File a request for assessment – if you believe the IRS is mistakenly claiming you owe the money, file a request for assessment to have the IRS review your case. If you have already been sent notifications of back tax liability or penalty for failure to pay, you can appeal this decision with the IRS. It is highly important that you stay in contact with the IRS regarding any alleged, or justified, tax debts. You may be surprised to learn that they can offer you a debt payment installment plan or an Offer In Compromise to help you resolve your tax debts.