We all hate to pay taxes, but refusing or forgetting to pay them every year will bring big problems for those who think that they can get away with it. In fact, the taxman has several courses of action that he can take to make sure that he gets his pound of flesh so the tax payer should be aware of this. One such way is for the taxman to apply IRS wage garnishments (WG). The other is of get an offer of compromise (OIC) from the debtor so that something can be worked out equitably.
Just about everyone lives in fear of being audited, but sometimes even the tax man can get things wrong. Arguing only brings frustration, but for those who absolutely know that a mistake has been made, or there are extenuating circumstances, there is a glimmer of light at the end of the tunnel.
For example, an OIC can be made by the debtor in one of several ways. If there is any doubt at all that the tax cannot be paid in full, whether this is all at once or over the period allowed in law to collect the tax, the debtor can ask to have the debt deferred. Since this person is unlikely ever to be able to pay, sometimes the tax man has to take the loss and walk away.
There is also something called a ‘doubt as to liability’ which means that there is reasonable cause to believe that the tax man got it wrong. Some tax employees misinterpret the law, or they did not take into account the evidence that the debtor has given. The debtor may also be able to furnish new evidence that something went wrong in the calculations too.
The last reason for the tax man to be put off is that the tax charged is correct, and the debtor has enough assets to pay for the tax but this may cause some extreme hardship. This has to be exceptional, like having a terminally ill child who will need the proceeds of the assets to get treatment etc.
Tax specialists know all about how to apply for such consideration and it costs around one hundred and fifty dollars for the application. However, this is not done very often so people have to be sure that they can succeed.
Tax WG on the other hand is a whole new ball game. The tax man can take his money right from salary payments. Although the tax man will send many letters and many requests for payment, inevitably the time will come for the debtor to pay and if he does not want to do this willingly, it will be done by force.
There are ways to stop this but it really takes the services of tax professionals to look at the whole situation. It is important, therefore, to source one as soon as problems arise since they may need to study the case for some time to see the best way to proceed.