The tax season is wrapping up in Illinois. Many people completed their tax returns months ago and filed them with the IRS as many people are expecting returns or do not expect to owe anything more than they have already paid throughout the previous year. There are many other people who may be waiting for many different reasons, but one of the main reasons is because they know they will owe money. Some may have not filed tax returns for a couple of years and may owe thousands in back taxes.
The IRS is one of the better creditors and owing money to the IRS can put people in difficult situations. The longer people owe taxes, the penalties and interest on the original tax can continue to grow and grow quickly. The IRS can garnish bank accounts that people have in their names. They can also put liens on people’s property, seize property and have other tools to get their money. People who find themselves in this position may feel hopeless, but they may have options available to them.
Forms of relief from IRS collection efforts
One option people have is entering into an installment agreement. This is essentially a payment plan that allows people to pay off their tax debt with manageable monthly payments. Another option could be an offer in compromise. This is a negotiation to lower the total tax obligation based on people’s income and assets.
Penalty abatement is another way people may be able to reduce the amount they owe, by eliminating the penalties on the original debt. People may also be able to negotiate the elimination of levies and liens. If the debt is completely unmanageable people may be able to have it discharged through bankruptcy as well, but this is only for income tax debts.
If people in Illinois have income, they will most likely owe taxes to the IRS. There are many who may owe more than they can pay immediately though. People in this position may have options to ensure that they will not be subject to the collection efforts of the IRS as they pay it. Experienced tax attorneys understand the different options and which one would be best in different situations.