The calendar is already turning to April, which means the tax filing deadline is just around the corner. For those who owe taxes, this is not good news.
Many scenarios can leave you owing federal and state taxes. Often you don't find out just how much until this time of year.
In December, President Obama signed a transportation bill with a catchy acronym - the Fixing America's Surface Transportation (FAST) Act. One provision requires the Internal Revenue Service utilize private collection agencies on "inactive tax receivables."
Tax debt can become unmanageable. When that happens, it doesn't matter how talented someone is in their chosen profession. The overriding need is for a debt relief strategy.
The relationship between tax debt and bankruptcy can raise many potential issues. For starters, it depends on what type of tax debt is involved and what type of bankruptcy.
If you don't have the money to pay your taxes, it might cross your mind to try avoiding the problem by not filing at all. Unfortunately, this reasoning is badly flawed.
The pop-culture press loves to report on the foibles of celebrities - including their problems with tax debt. Among those struggling with it recently are apparently the actor Nicholas Cage and former football hero O.J. Simpson. They are not alone, of course. Many people have tax debt.
An offer in compromise is one method for taxpayers in California to pay delinquent tax debts to the Internal Revenue Service. The IRS will accept an OIC on a handful of grounds, including doubt as to collectability, where the taxpayer does not have the income or assets to satisfy the debt. Because an OIC settles the tax liability for less than the total amount owed, the IRS wants to make absolutely sure that the taxpayer cannot pay the debt in full.
When summertime is in full swing in Southern California, taxes may be the furthest thing from many residents' minds. But for those who owe money to the Internal Revenue Service, taxes can become a year-round preoccupation. Since penalties and interest on tax debts can quickly swell the total amount owed, it is important to reduce and eliminate one's debts as quickly as possible.
A number of prior posts on this blog have mentioned the changes implemented by the Internal Revenue Service under its "Fresh Start" program, which contains a number of measures aimed at helping people pay their tax bills. This week, the IRS has announced further modifications to Fresh Start, in particular making taxpayer-friendly improvements to the offer in compromise program.