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Tax Problems & Hardships Solution by the Professionals

Tax debt is the term used for the inability to pay taxes to the federal and government state based on paid income that the individual has earned. This also includes the taxes one forgets to file after the given deadline and partially paid amounts before the deadline.

Not being able to pay taxes can be illegal and can cost you a lot in the long run. We at The Law Offices of Ryan McFarland advise clients to at least notify the rightful representatives (Internal Revenue Service, IRS) and agencies about the situation beforehand to provide a certain allowance of time and in this way, you can strategically plan what to do before the deadline arrives.

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Short-Term Extension. The full amount of taxes, which is at least $50,000 or less, is paid within 120 days. Easy online approval is to be expected when completing the STE form on the IRS website with a notification immediately after. Pros – No application fee, Cons – there is no guarantee that no interest will be paid on your tax debt.
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Installation Agreement (IA). The Law Offices of Ryan McFarland sees the conditions for a request of an Installment Agreement:

  • the refusal for the Offer of Compromise
  • realistically, paying your taxes at once is a burden and the solution would be to pay it through a monthly portion,
  • a lower interest loan has not been granted. In any of these cases, it opens the option of once-a-month payment that covers your interest, penalty, and balance.
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The different kinds of installment agreements depend on the amount that you owe. The conditions above are just the general criteria, but we do request you to read further on the particular installment agreement that you are applying for because there may be additional requirements or forms that would be asked from you—these are all to make sure that you do not omit another payment deadline again. Pros – knowing your income history can help you cut back on payment percentages if you are qualified. In some of the types of installment agreements, user fees can be reduced. Cons – it is very important that you do not skip a payment or else other fees may be added and other penalties equally tallied.

Tax Debt Payment Plans and Hardships

Discussing your options for payment is better-done way ahead before the deadline to prevent penalties. Installment Payment Options are for Offer in Compromise (which we have discussed in the previous post), Short-Term Extension, and Installment Agreement. In all three alternatives consider a possible scenario that you might be encountering.

Depending on the amount that you have, there are five (5) possible Installation Agreements that you can apply for; all of which you must meet the criteria for. Guaranteed Installation Agreements (GIA) are for the individual debtors that owe a $10,000 or less and have a maximum of three (3) years plus interest and penalties. The other types such as Streamlined Installment Agreements, Financial Installment Agreements, Partial Payment Agreements and Direct Debit IRS Installments assume secondary steps in case not qualified for the GIAs.

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Tax debt payment plans and hardships go together. Do understand that non-payment of tax debt is subjected to penalties. The reasons can range from pressing situations such as the passing away/illness of the taxpayer or a family member, incarceration, serving in the army, as accidental as misinformation or ignorance or as simple as forgetting the due date. Nevertheless, hardships are never an excuse not to pay your taxes, so we advise our clients to settle this as soon as possible. We at The Law Offices of Ryan McFarland will gladly walk you through your options.
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