Money Savings Challenge: Tax Debt Relief Tools
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Money Savings Challenge: Tax Debt Relief Tools

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August 19, 2015

Do you still owe back taxes? Never filed because you are afraid of what you owe? If you are struggling with paying debts to the IRS you’re not alone. According to CNN Money, 3.3 billion dollars is owed to the IRS in back taxes from federal employees and retirees.

But we are here to help. Follow these 3 simple steps to bring you tax debt relief. 

Step 1: Knowledge is power. 

The most important thing to do when you are struggling with a debt from the IRS is to get as much information as possible.  Start by filing all your income taxes on time.  The longer you wait the more fees, penalties and interest will be added.  You do have the option of going to a paid provider or you may want to see if you are eligible for free tax assistance services from VITA (Volunteer Income Tax Assistance) site.

Step 2: Know Your Rights

The IRS has a Taxpayer Bill of Rights.

  • The right to be informed
  • The right to quality service
  • The right to pay no more than the correct amount of tax
  • The right to challenge the IRS’s position and be heard
  • The right to appeal an IRS decision in an independent forum
  • The right to finality
  • The right to privacy
  • The right to confidentiality
  • The right to retain representation
  • The right to a fair and just tax system

The TAS (Taxpayer Advocate Service) protects your rights and offers assistance to ensure the IRS treats all taxpayers fairly. View the toolkit and additional information. The site also offers self-help videos, documents and much more. TAS is also a resource to report any tax issues or scams.

Step 3: Take Action.

Although tax debts can be stressful there are many ways to alleviate that stress. Ignoring it can be cause for garnishments, tax liens and bad credit. Tax debt does not go away so take action one step at a time and use one or more of these resources that are available to you. 

//money.cnn.com/2014/05/23/pf/taxes/federal-workers-delinquent-taxes/

//www.irs.gov/

The IRS also offers these 6 tips if you owe taxes:

  1. Pay your Tax Bill. Paying as much as you can will lessen your interest and penalties. 
  2. Use IRS Direct Pay. It is a safe, easy and free way to pay the IRS directly from your checking or savings account. Click on the “Pay Your Tax Bill” icon on at irs.gov.
  3. Get a Short Term Extension to Pay. You may qualify for extra time to pay if you can pay within 120 days or less. You can apply online at irs.gov or call 1-800-829-1040
  4. Apply for a Monthly Payment Plan. If you owe $50,000.00 or less you can apply online at irs.gov and click on “Payment Plan Options” or call 1-800-829-1040
  5. Consider an Offer in Compromise.  An Offer in Compromise is an option you can use when paying in full causes a financial hardship. This option lets you settle your tax debt for less than the full amount. Go to the “OIC Pre-Qualifier Tool” on irs.gov to see if you qualify.
  6. Change your Withholding or Estimated Tax. Complete a new W4 form with your employer.  The IRS withholding calculator on irs.gov can help you fill one out. If you do not have withholdings through an employer estimated tax payments may be for you. This would be the form 1040-ES which can also be found on the IRS website.

About the Bloggers
Gina M. Sanchez Juarez (left) is the Financial Stability Coordinator at La Casa de Esperanza, in Waukesha, Wisconsin. The Financial Stability Initiative is a partnership between La Casa de Esperanza and the United Way of Greater Milwaukee & Waukesha County. Gina has all six certifications under the NeighborWorks Center for Homeownership Education and Counseling and operates under the National Industry Standards for Homeownership Education. She is a financial coach and educator working with individuals and families on obtaining tools for financial capability by meeting basic needs, building savings and gaining assets. She enjoys sharing her knowledge of personal finances to positively impact the lives of others. 

Crystal Monsivais (right) is a bi-lingual (Spanish) Financial Stability Coordinator at La Casa de Esperanza, in Waukesha, Wisconsin. As a Financial Stability Coordinator, Crystal has worked with individuals and families in repairing credit, mental health, family matters, tax related issues and much more. She has helped hundreds of low to moderate income families overcome financial stresses and live a more stress free life. Crystal has been IRS Certified for seven years in advanced personal tax preparation. She is also IRS Certified in Health Savings Account (HSA) tax preparation, certified for personal tax preparation with the Wisconsin Department of Revenue, and IRS Certified as Volunteer Income Tax Assistance (VITA) Site Coordinator. In addition to certification for tax preparation, Crystal has also worked with the We Energies Low Income Pilot program and Energy Assistance.

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