Do you have a pesky IRS or State tax issue holding you back from living your best life? Try some of these suggestions.
Be forewarned, You’ll need to file ALL of your delinquent tax returns prior to attempting to get relief using the means listed below – because absolutely nothing good comes from not filing your taxes, so file those taxes because the sooner you file the sooner you will be past the audit window, the sooner the 10 year statute of limitations for collections is over.
You must face your fears to overcome them. You must file taxes if you live in the US and make over the minimum required to file. There’s really no way around it. The sooner you accept this fact, the sooner your tax issues will go away. So file file file, no matter how late those returns are.
After you file, here are some ways to mitigate those pesky IRS issues:
- You may Qualify to File Bankruptcy – Contrary to popular belief, Chapter 7 or 13 both offer some form of assistance to individual taxpayers who are in debt to the IRS. At the minimum, once you are in bankruptcy you are protected from all creditors including IRS until the bankruptcy is complete. For relief of tax debts under chapter 7, the taxes must have been filed more than 2 years ago. Under chapter 13, taxes may be reduced but will not be discharged as in chapter 7.
2. File an Offer in Compromise with IRS. Throw yourself on their mercy. (The IRS even has a “pre-qualifying” tool on their website that will tell you how much you should offer.)
3. Hide. The statute of limitations is 10 years for collecting taxes after the return was filed. In some cases this can be extended if you filed late or for other reasons so it’s best to consult a tax expert to get your exact options. This is probably the most difficult option on this list, because it’s almost impossible to hide from them. They will levy your accounts and are guaranteed to make your life hell if you choose this option.
4. Enter in a payment plan to pay off the taxes over time.
5. Contact an expert for insight into your personal situation. An expert can be costly, so do your research first.
Even though the IRS can make it seem like owing them a penny is the end of the world, everyone gets in a sticky situation now and then, life goes on and it’s really not that bad.
Summary: The BIGGEST mistake is NOT filing your taxes! The IRS has 10 years from the date of filing to collect. FILE, Avoid late-filing penalties, and Get that “Statute of Limitations” clock ticking.