Tax bills can represent one of most difficult types of debt to recover from. You can get hit from federal, state and even local tax authorities with bills that can be extremely difficult to repay. Unlike other consumer debt, you cannot eliminate most tax debt through a bankruptcy filing. Fortunately, you can get help with tax bills, but not necessarily from the sources that you might think.
First of all, the most widely recognized entities that help with tax bills actually provide very little if any relief. Instead, they make vague promises and charge thousands of dollars in upfront fees. Once they have your money, you can expect them to do little more than send form letters on your behalf, something you could have done on your own for free.
Law firms that provide so-called tax debt settlement help vary in effectiveness. If you respond to a television commercial about a national law firm that can help you reduce your tax debt substantially, you will likely become their next victim.
Instead of paying them thousands of dollars for dubious representation services, you may consider contacting the tax authorities directly. The Internal Revenue Service has many ways that they will work with you on your tax debt. Their offer in compromise program is limited in scope, but it can be an option for a tax payer who is hopelessly unable to meet their income tax liability. Sometimes an innocent spouse may be granted relief from a tax bill resulting from their spouse’s unknown activities. Even payment plans are frequently approved, thereby allowing you a reprieve from embarrassing levies and liens.
Your state’s department of revenue and county tax authority also have similar programs. You simply have to contact the appropriate department, be honest about your situation, and make an honest effort to comply. Remember though that if you owe a tax debt, you will be expected to pay it if they determine that you are able.
If you do choose to hire a tax attorney, avoid the late night television commercials. Instead, contact your state’s bar association to search for an experienced and licensed tax attorney. They can help you navigate the process when your situation is more complicated than you feel you can handle.
When you cannot pay your tax debt because you owe many consumer debts, then it is time to contact a reputable credit counseling organization so that they can help you find a way to pay everyone. Otherwise, financial ruin may result if you wait until legal action results.
Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.
Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.
In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.
Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!
"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."