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Tax Relief in Los Angeles
Tax relief is not a magic potion that defeats an individual’s tax debt. However, it is a pragmatic approach to lessening the burden of paying off one’s tax balance. If a taxpayer is presented with an intimidating tax bill, unable to decipher the tax codes, it is crucial to understand that tax relief help is available.
Tax relief companies often lack transparency, but the tax professionals at Tax Shark are committed to honest and thorough investigations of client cases. Consultations are free, but before consulting with a professional, it is helpful to outline what tax relief is, and how it can help.
What Is Tax Relief?
If an individual accumulates tax debt through penalties, interest, or a general oversight in their finances, tax relief helps to create an organized structure for paying off this debt. The purpose of tax relief is to make an overwhelming financial situation, manageable. Successful tax debt relief is most probable with the guidance of a tax professional.
Professionals with extensive knowledge of tax law and tax processes can efficiently organize installment plans, point out potential exemptions, negotiate for extensions, and assess an individual’s eligibility for an Offer in Compromise (OIC).
The literature around tax laws and procedures is dense and changes rather frequently. It can be helpful to get a basic understanding of what the IRS offers in terms of tax relief help. With this understanding, taxpayers can see that the Internal Revenue Service (IRS) does have room for negotiation. Often, a tax attorney can bridge the gap between the relief that is available and the relief that you receive.
Depending on a taxpayer’s unique financial circumstance, the IRS may be open to structuring a repayment plan. These plans are called Installment Agreements. In these cases, the IRS grants individuals an opportunity to chop up their balance into manageable payment chunks.
As the debtor is unable to pay the total balance in full, a monthly installment of an agreed-upon amount will ensue until the individual pays off the total balance. The installment amount is based on the amount the taxpayer owes and their overall income. Generally, there are two payment plan options: a long-term payment plan and a short-term payment plan.
A long-term payment plan means that a taxpayer with less than $50,000 in tax debt is given 120 days or longer to pay off their balance for up to six years. Now, a taxpayer with $100,000 or more of tax debt will only qualify for a short-term payment plan, in which they are allotted 120 days or less to pay off their balance.
As a result of the IRS Fresh Start Program, penalties and interest do not accumulate while the enrolled taxpayer is paying off their bill. The absence of looming fees often makes room for a clear head to stay on top of payments.
While a repayment plan can be an excellent option for some taxpayers to take, it is not a path to be journeyed on alone. If an installment plan is defaulted on, penalties will return.
Tax relief help is intended to make the process of paying off one’s debt manageable. Settling on the best possible plan can be complicated, and a tax professional can help determine if the rates and fees are worth the agreement.
Offer in Compromise
An Offer in Compromise (OIC) is possible when an individual proves that they are unable to pay the lump sum they owe. They must also determine that they can’t afford to work within the parameters of an installment agreement. If an individual qualifies for an OIC, their outstanding debt will be lowered to a manageable level, permanently.
When considering an OIC, the IRS will analyze four factors:
- Ability to pay off the debt
- Overall income
- Total expenses
- Owned assets
Additionally, all mandatory tax returns must be filed, all necessary estimated tax payments must be made, and the applicant can’t have additional tax debt from the previous year. If an application for OIC is rushed without considering eligibility, the application may return rejected. Appealing a rejection can be even more difficult, especially without the help of a professional tax attorney.
If the IRS does not believe a taxpayer will face financial hardship as a result of paying their full balance, they will not grant an OIC. An OIC is for individuals with limited resources. The Fresh Start Program expanded this appeal to cover a broader range of taxpayers, but it still falls under rigid scrutiny.
Utilizing a tax attorney offers a better chance of accurate representation of financial status. A tax attorney can also help craft an offer that is most likely to be accepted by an IRS prosecutor. Remember, the offer presented must reflect a reasonable amount considering the income, assets, and expenses of the applicant.
Utilizing the IRS Fresh Start Program
With more room for tax forgiveness available under the current structure of the Fresh Start Program, getting out of tax debt has become an attainable goal for taxpayers. Nonetheless, acting quickly and appropriately is vital to make the most of the program.
Teaming up with a tax attorney can expedite the application process, thus reducing the level of penalties and interest incurred.
The Importance of Tax Relief
While many understand that tax debt is a bad thing, few understand just how important addressing tax debt quickly is. Here are three facts to highlight the importance of quick action:
- The rate of interest for unpaid taxes offer hoovers around 5 percent with the potential to increase each quarter. It compounds daily from the first day of delinquency.
- A failure to pay penalty is added on top of interest at .5 percent of the debt, every month, up to 25 percent.
- Failure to file and pay leads to a combination fee of 5 percent up to 47.5 percent of the original debt.
Suffice to say, fees, penalties, and interest on tax debt are steep, and above all, tax debt should never be ignored. Those feeling overwhelmed can find a helping—and experienced—hand from the Los Angeles tax relief specialists at Tax Shark.
The IRS has tax relief options on the table—they’re just hard to sift through. Once a taxpayer does sift through these options, it can be even harder to apply what they’ve learned. This is the crux of quality tax relief: outline the individual’s problem and present a coherent resolution.
The Los Angeles tax attorneys at Tax Shark have already done the sifting. They are well versed in tax law and relevant procedures. Working with a quality tax relief company can be the difference between you suffering under the weight of tax debt and you conquering tax debt.
How Can Tax Relief Help Los Angeles Taxpayers?
California has the steepest marginal income tax rate in the country. They also have the highest sales tax and the second-highest gas tax. All these financial factors contribute to a higher chance a taxpayer will receive a tax bill they can’t afford to pay.
Living and working in Los Angeles, even with high taxes, doesn’t have to mean living with high debt—and stress. With help, tax debt can be reduced into a structure that is easy to manage and understand. More importantly, when feeling threatened financially by the IRS, a tax attorney can do all the talking and stand up for a taxpayer’s rights.
The qualified team of tax lawyers at Tax Shark also know that when it comes to dealing with the IRS, it’s the little details that matter. They will outline where the discrepancies are a debtor’s finances. They will point out where there is potential for extensions or exemptions. They will make sure that the filer is getting the best tax relief possible.
Tax Shark works with tax attorneys with extensive experience reviewing IRS transcripts, breaking down financial situations, and investigating tax debt cases to identify ideal solutions. They will understand if an extension, an installment agreement, or an OIC is appropriate. For those struggling with back taxes, there’s no better firm to turn to.
Additionally, the tax relief specialists at Tax Shark stay up to date on the IRS’s special tax relief opportunities for victims of natural disasters. California wildfires have resulted in several unique tax relief opportunities in the past. Although wildfires are devastating, tax professionals can lessen the burden by finding extensions and exemption offerings through the IRS.
Tax Shark is here to provide the good people of Los Angeles peace of mind. To offer relief to those concerned about getting bogged down by fees and interest and help them find the most beneficial tax relief option. There’s no reason to battle back taxes alone when the qualified professionals at Tax Shark are here to lend a hand.
What Should a Los Angeles Taxpayer with Tax Debt Do?
Call the trusted Los Angeles tax attorneys at Tax Shark by dialing (205) 386-2353 or by clicking the button below to start your relief today.