St. Paul, MN Tax Help for Residents in Need of St Paul, MN Tax Relief
The Internal Revenue Service (IRS) is responsible for administering the tax laws for the federal government, with the agency’s main responsibility being tax collection. When taxpayers do not file their federal tax returns or pay their taxes on time, the IRS has no choice but to take action to collect the tax debt. Taxpayers often become overwhelmed when they start getting notices from the IRS. This is when MWB Tax Solutions can step in and offer expert tax help and advice.
St. Paul Tax Relief
MWB Tax Solutions has a team of tax professionals and CPAs with many years of experience helping individuals and businesses solve their tax problems. We take pride in our ability to provide tax help to St. Paul taxpayers in need of IRS tax relief. You can count on us, even if the IRS has already begun a campaign of aggressive tax collection activities against you, which may include the following tactics:
IRS Tax Liens
If you fail to pay your federal taxes, you risk having the IRS issue a tax lien against any assets you own, including real estate and personal property. This is usually the first of a series of aggressive steps the agency may take to collect from delinquent taxpayers. The lien will remain in place until the tax debt is fully paid. It is much easier to avoid this in the first place than it is to get the lien released. If you are at risk of an IRS tax lien and are in need of St. Paul tax relief please contact the very experienced tax professionals at MWB Tax Solutions for an IRS tax consultation.
How an IRS Tax Lien Works
To secure the payment of a tax debt, the IRS will issue a Notice of Federal Tax Lien against the delinquent taxpayer. Many states do the same when someone fails to pay their taxes or resolve the issue by making payment arrangements. The IRS uses a tax debt threshold of $10,000 or more before it will issue a Notice of Federal Tax Lien. But, that doesn’t mean there haven’t been notices filed for lesser amounts.
Getting a Tax Lien Lifted
There are a number of different ways of releasing an IRS tax lien. There are also ways to have a tax lien removed from your credit report if you meet certain requirements. A tax lien can negatively affect your life in many ways, so it’s critical that you resolve your tax problems as soon as possible. If you need tax relief, please reach out to us at MWB Tax Solutions to schedule a consultation with a qualified tax professional who can provide you with the kind of tax help you need to stop an IRS tax lien or to get it released.
IRS Bank Levies
When the IRS levies your bank account, whatever funds you have in the account are sent directly to the IRS, up to the amount you owe in back taxes, interest and penalties. The IRS will first contact your bank to advise them of the unpaid tax debt. Your bank will then freeze your account for 21 days starting on the date it receives the IRS notice.
If you do nothing to resolve the matter during that time, your bank will end up sending your money to the IRS. If your bank notifies you that your account is frozen due to an IRS tax levy, you are strongly advised to consult with a tax expert or CPA for their tax help in resolving the matter once and for all.
The IRS levy on your bank account will only affect the funds currently in your account, which means that once the bank acts on the levy, any future deposits you make will not be affected. However, the IRS does have the option of issuing another levy at a later date if the problem hasn’t been resolved, although this hardly ever happens.
IRS Garnishment of Wages
The IRS has every right to force your employer to deduct money from your paycheck to pay your back taxes. This could happen after you’ve been sent a number of notices to contact them to resolve the matter. In fact, the IRS would only do this when they have tried reaching you over a period of time with no response and have no other option.
An IRS tax wage levy is the legal vehicle that allows the IRS to collect your unpaid tax debt by garnishing your wages. Internal Revenue Code IRC 6331 authorizes the IRS to issue levies to collect outstanding taxes. When your wages are levied your employer has no choice but to withhold funds from your paycheck and forward the money to the IRS.
If you need St. Paul IRS wage garnishment help, please contact MWB Tax Solutions. We would be happy to review your case for free and discuss your options for stopping it, or if the levy is already in place, having it released.
How MWB Tax Solutions Provides St. Paul Tax Help & Tax Relief
The IRS offers taxpayers a number of tax help and tax relief programs for people with unresolved tax problems. Please contact MWB Tax Solutions if you are unable to fully pay what you owe in Minnesota or IRS taxes and are at risk of aggressive collection activities. Individuals and businesses alike often experience financial difficulties, which can result in the inability to pay their taxes in full. If you are in this situation it’s important that you seek tax help from a reputable tax professional or CPA. You may find out that you are eligible for an IRS tax relief program, as follows:
Removing IRS Penalty Charges
We all know that penalties and interest can add substantially to an IRS tax debt. If you do not think you should be charged with specific penalties or interest, you have the right to request IRS penalty abatement. If you meet the requirements, the IRS will remove some or all of the penalties you’ve been charged.
To be eligible, you must prove that you had “reasonable cause” for filing your tax return or paying your taxes late. Taxpayers can also qualify in some cases if the IRS made a mistake or delayed their tax return, or if it can be shown that the IRS gave bad advice, which was followed and caused the penalty and interest charges. To prove this, there would have to be a written record of that bad advice.
First Time IRS Penalty Abatement
St. Paul IRS penalty abatement may also be approved if it’s the taxpayer’s first offense and the request is the type of penalty abatement the IRS allows. The IRS’s First Time Penalty Abatement Program (FTA) is only for taxpayers who have a good record of compliance, not repeat offenders.
Requesting an IRS Penalty Abatement
Applications for IRS penalty abatement can be in writing, by using IRS Form 843 or you can apply verbally by personally calling the IRS to explain why you filed and/or paid your taxes late. A personal phone call may be the most effective way to get your penalties removed from your federal tax debt.
St. Paul IRS Penalty Abatement Help
Working with a reputable team of tax professionals always increases your chances of prevailing with the IRS. MWB Tax Solutions can help pull together all the required tax records to show the IRS that you are entitled to have the penalties removed. This will reduce your tax debt and allow you to make smaller payments. Please give us a call so we can start working to resolve your tax problems and get your penalties removed.
IRS Installment Payment Agreements
In order to be approved for an IRS Installment Agreement you must be able to pay off your tax debt in full within seven years or before your tax debt legally expires according to the Collection Statute Expiration Date (CSED).
You can apply online for an IRS Installment Agreement if your federal tax debt does not exceed $50,000. You can also use Form 9465. However, it might be to your advantage to have a licensed Minnesota tax expert speak to the IRS over the phone so that the best possible payment arrangements can be negotiated on your behalf.
Requesting an IRS Installment Agreement
Making monthly installment payments on your unpaid tax debt might be the best way to resolve the matter if you do not have the money to fully pay your federal taxes. However, this won’t work if you cannot afford to make monthly payments. If you are already stretched to the breaking point financially, a better option might be to try and have the IRS declare your case “uncollectible.”
Another option might be to take out a low-interest loan for enough to fully pay what you owe in order to avoid accruing the interest and penalties, which will continue until your debt is fully paid. Interest would compound daily at a rate of anywhere between 6% and 12%, as it updates quarterly. The late payment penalty remains constant at 0.25%. So, it may be less expensive if you could get a low-interest loan instead.
If taking out a loan is not an option, you can apply to make monthly payments by entering into an IRS Installment Agreement, as follows:
This is the easiest type of Installment Agreement to get for those who are eligible and meet the requirements established by the IRS. Your tax debt must not exceed $10,000 and you must have the ability to pay off the full amount within three years or prior to the Collection Statute Expiration Date (CSED).
This type of installment agreement is one in which you agree to automatic withdrawals from your bank account to make your monthly payments. If you agree to a 60-month payment plan for releasing the tax lien, this payment method would be required. Also, either an automatic payroll deduction or direct debit is required of taxpayers who owe over $50,000 in back taxes if they prefer not to disclose their assets, liabilities, income and expenses.
Individual St. Paul taxpayers who owe up to $100,000 or businesses that owe up to $25,000 may be eligible for a Streamlined IRS Installment Agreement. This would also apply to sole-proprietor businesses that are out of business and owe up to $100,000 in federal taxes. There is no requirement that income, expenses, financial assets or liabilities be verified under this plan. However, if your tax debt exceeds $50,000, the IRS may ask you to complete Collection Information Statement Form 433.
The streamlined plan allows individual taxpayers up to 7 years to pay their taxes off and active businesses are usually allowed up to 2 years if the Collection Statute Expiration Date permits it. A sole-proprietorship that has gone out of business may still be allowed up to 84 months to pay off its federal taxes.
These types of Installment Payment Plans are for individual taxpayers and businesses that are not eligible for a streamlined payment agreement because they owe too much. As the name implies, taxpayers requesting a Verified Financial Installment Agreement must disclose all the details of their finances by completing Collection Information Statement Form 433.
This plan is for taxpayers who do not want their payments automatically deducted from their paycheck or debited from their bank accounts and owe more than $50,000. Verified Installment Agreements require a lot more paperwork because applicants must provide the IRS with very detailed financial information regarding income, expenses, assets and liabilities.
If your income were such that you cannot afford to make monthly installment payments according to the standard Installment Agreement, your best bet would be to apply for a Partial Payment Installment Agreement (PPIA). Under this agreement the IRS would accept monthly payments in an amount that you could afford, which would mean that the total amount you’d pay in the end would be less than what you actually owe.
The upshot is that these Installment Agreements are more difficult to qualify for. You would have to provide the IRS with all your financial information in order to prove to them that you could not afford to pay the standard amount in monthly installments.
IRS Installment Agreement Request Instructions Form 9465
If you do not want to go online to request an installment payment plan using the IRS’s online program (or your tax debt is too high to qualify), just complete IRS Installment Agreement Form 9465, which is designed for individual taxpayers. However, a business that is no longer operating can also use this form to apply for an Installment Agreement.
Appeals Process for IRS Installment Agreements
You have the right to appeal if the IRS rejects your request for an installment payment agreement. Under these circumstances it would be best to get tax help and guidance from an experienced St. Paul tax professional that has successfully navigated the appeals process with other clients. You are also within your rights to file an appeal if the IRS decides to terminate your existing Installment Agreement. MWB Tax Solutions would be happy to help, just give us a call.
IRS Uncollectable Status for Hardship Cases
When taxpayers find themselves suffering unforeseen financial hardship and they have no way of paying their IRS taxes, they may apply for uncollectable status. The IRS is sympathetic to people in dire financial straits and has the authority to declare their case uncollectible. The person must first show the IRS proof that being forced to pay these taxes would cause them severe financial hardship.
Uncollectable status is also referred to as “status 53” and when you have this status the IRS will temporarily cease all collection activities. The IRS will check back in several months to determine whether the taxpayer’s financial situation has improved any, and if it makes sense to resume collections. Uncollectable status does not offer a permanent solution to tax problems, but it does take the pressure off so that the taxpayer has some time to get his/her finances in order.
Getting the IRS to Declare You Uncollectible
The IRS handles requests for hardship or uncollectible status on a case-by-case basis. Each taxpayer is evaluated individually to determine whether continuing to collect their taxes would cause them economic hardship. If you want to be considered for status 53 you would need to complete a whole host of very detailed financial forms to prove to the IRS that your financial situation is dire. Once the IRS is convinced that it is in their best interest to temporarily cease collection activities and give you more time to pay, they will temporarily mark your file “uncollectable.”
IRS Offer in Compromise
Taxpayers in serious financial trouble who cannot pay their federal taxes may be allowed to settle their IRS tax debt for less than they owe through a tax relief program called an Offer in Compromise. If you are having serious financial issues, this may be an option for you. However, you should know that last year the IRS only accepted 42.8% of the offers submitted.
Before submitting your offer it would be wise to have an experienced tax professional or CPA help you prepare and file your paperwork. There is a lot of financial information that must be completed and filed correctly to prove that you meet the eligibility requirements. Furthermore, your offer must be the absolute most you could possibly pay or the IRS will reject your offer out of hand. With so much at stake, you need to get the kind of tax help necessary to dramatically increase the chances of your offer being accepted.
If your offer is accepted, you have two options for paying the IRS the money you offered, and your St. Paul tax experts would certainly help you make the payment arrangements. The terms of your tax relief settlement under this program would require that you remain in compliance with all your tax obligations for the next five years. If the IRS rejects your offer, you have the right to appeal their decision.
MWB Tax Solutions has many years of experience successfully navigating the IRS Offer in Compromise program for clients in St. Paul, MN and would be happy to work with you to settle your IRS tax debt once and for all.
Innocent Spouse Tax Relief
If you’ve been filing joint tax returns with your spouse that means you are both financially liable for the taxes, interest and penalties associated with those tax returns. The State of Minnesota and the IRS have the legal right to go after both of you or just one of you for the entire tax bill. Even if you’re divorced and your decree makes your ex responsible for those taxes, the IRS still has the right to go after you. Fortunately, there is something called Innocent Spouse Relief (ISR).
Innocent Spouse Relief would be considered in a situation where it would be unfair to hold both parties responsible for paying the taxes. If you are approved for ISR, you would not be financially liable for the IRS taxes that your spouse or ex-spouse owes. In some cases, the taxes are equitably split.
If you think you would qualify for tax relief under the Innocent Spouse Relief program it would be wise to get tax help from a reputable tax professional or CPA to have the best chance of your request being approved. Our team at MWB Tax Solutions can help determine whether you would qualify for tax relief under Innocent Spouse Relief.Call 612.524.5811