If you live in Houston and find yourself in need of tax relief, don’t try to fight the IRS on your own. Take advantage of Community Tax’s trusted team of professionals to handle your case with the utmost dedication and see yourself back to financial freedom sooner than you though imaginable. Community Tax is proud to provide IRS back tax help to Houston and its nesting communities. From the museum district of Binz to the southwest neighborhood of Alief, Dallas to Austin, Texas to New York, CTax is America’s premier tax-service company here to solve all of your tax-related needs.
Houston Hardships and Back Taxes
The term “back taxes” refers to taxes that were not paid when due. Houston taxpayers can face back taxes at local, Texas state, and U.S. federal levels. Unpaid back taxes can stir a number of consequences that soon demand tax relief help. First, it’s important to distinguish the difference between not filing and not paying your taxes, as the penalties are not the same.
If you don’t file your taxes – either deliberately or accidentally – you can face a failure-to-file penalty. In some cases, the consequence is less extreme. The IRS may simply file a substitute return on your behalf, resulting in you missing out on the refund that would have headed straight to your pocket. However, you might get picked up by the IRS radar if you have a sizeable (missing) income return or failed to file after consistently filing for years on end. Remember, the IRS has access W-2, 1099, or similar forms provided at the time of employment, and can therefore see any discrepancy between the income you earned and the income you reported (or in this case, failed to report). If the IRS catches this, they can hit you with a hefty failure-to-file penalty. At a minimum, failing to file your tax return more than 60 days late will cost you a flat fee of $135 or 100 percent of the taxes you owe (whichever is less). On top of that base fee, you will incur a monthly charge of about 5 percent of the outstanding taxes you owe – remember, the IRS can already see what you made. You’ll incur this penalty for as many months as your taxes remain unfiled and unpaid, until capped at 25 percent.
This penalty exists for those who file their taxes, but are unable to pay the amount they owe. People find themselves unprepared to pay their tax bill for a variety of reasons. They might have substantial investments, or received a recent inheritance. In other cases, they might not have withheld enough tax from their income, opting instead for a bigger paycheck. In any case, if you are unable to pay your federal or state tax in Houston, you can face an imposed failure-to-pay penalty. This fee is charged at a rate of about 0.5 percent of your unpaid taxes for each outstanding month, up to 25 percent. Plus, you’ll still be responsible for the interest on the unpaid amount. The IRS cautions how much more costly the failure-to-file penalty is over the failure-to-pay (about ten times more expensive, in fact). The steep fee is their way of discouraging tax evasion – the illegal nonpayment or underpayment of tax. For that reason, it’s always better to file your tax return, even if you know in advance you’ll be unable to pay.
There are a number of other ways taxpayers might accumulate debt and find themselves in need of IRS tax relief. Delinquent taxes might arise from:
- Poor recordkeeping: In the case of an IRS audit, you’ll need detailed records of expenses and provide copies of documents to support your tax credits or write-offs. If you can’t substantiate your claim for a $50,000 pool, for example, you’ll be responsible for paying it back.
- Mixing business and personal expenses: Be very careful to keep your expenses separate, or you might have trouble explaining how a weekend in Vegas contributed to your business’s bottom line.
- Deficient taxes: If you’re filing your taxes by yourself, a simple mistake such as leaving off an extra zero could result in a Notice of Deficiency, also known as a 90-day letter. This notice alerts the taxpayer of their delinquent taxes owed plus any penalties and interest, and allows 90 days to dispute the assessment.
- Dishonored check: Whether intentional or not, if your bank doesn’t honor your check, you can face a penalty of 2 percent of the payment for checks made out to $1,250 or more. Be sure that there are sufficient funds to pay your bill when writing your check.
Tax Relief Solutions in Houston, Texas
For whatever reason you find yourself in need of IRS back tax help, refer to Community Tax as Houston’s trusted source for tax relief solutions. Being in debt with the federal government is not a fun place to be; it can result in tax liens, levies, garnished wages, and even arrest in extreme cases. CTax offers a number of relief solutions for those in Houston encumbered by IRS debt. Some forms of tax relief include:
Offers in Compromise (OIC)
Taxpayers very close to the threshold of financial hardship may qualify for an OIC. In this case, the IRS determines the maximum amount they would be able to get from a taxpayer without causing financial hardship, and the remainder is forgiven with the individual released from their liability.
Installment Agreement (IA)
IA is a method of debt resolution available to Houston residents that allows an individual to pay off their balance over a period of years, typically ranging from six months to ten years.
Stair Step Agreement
This form of IA is intended to allow taxpayers to finish payment on large expenses, such as a car loan, by more funds to that expense with small installments on the unpaid tax. Once the payment on the initial expense is complete, the taxpayer switches the entire payment over to the unpaid back taxes.
Within this form of relief are strict guidelines that determine a taxpayer’s eligibility, but added benefits make the program worthwhile, and is ideal for taxpayers with disposable income and substantial assets. The amount owed must be less than or equal to $50,000 and repaid between 60-72 months.
Partial Pay IA
For those unable to pay their back taxes due to financial hardship, this IA calculates payments based on what the taxpayer can afford, and repayment can last as long as ten years (after ten years, the Statute of Limitations is imposed, and the IRS can no longer collect on past debt).
Conditional Expense IA
This version of tax relief allows individuals to address their tax debt problems while continuing to pay for a long-term monthly bill and/or expense. A more accommodating IA, this agreement allows taxpayers to continue their current lifestyle without disruption from tax debt.
Currently Not Collectible Status
If you’re struggling with extreme hardship, you could potentially be relieved of all of your IRS debt. The IRS cannot attempt to garnish wages or collect your debt while your account is placed on CNC status.
Abatement does not apply to interest, but it may apply to penalties if the taxpayer meets a given requirement. Penalties may be abated if the taxpayer has a reasonable cause for not filing their taxes (such as sickness, a family death, or major life event), files an Administrative Waiver and First Time Penalty Abatement form, is an injured spouse, or falls under statutory exception.
Community Tax Tax Relief Help
For those in Houston struggling to repay their debt and need IRS back tax help, Community Tax is here to assist. Our team is trained to negotiate with the IRS on your behalf and promises to fight for your right as a taxpayer. We offer a meticulous tax resolution service that involves pouring over IRS records and documents to have a complete understanding of your financial situation. As your Power of Attorney, we’ll communicate with the IRS on your behalf, eliminating your need to engage with stressful or intimidating government agents. CTax assigns each client to an extremely dedicated team of practitioners and researchers who work together to create the best tax relief solution specific to your unique circumstances. Our goal is to not only fix your current debt situation and get you back on track, but provide you with ample information to assure you never face such troubles again in the future. We’re happy to service the Houston area in addition to the 50,000 clients nationwide whose $300+ million debt we’ve resolved. Don’t spend another day drowning in debt; contact CTax to see how we can help you regain control of your finances. The consultation is free – give us a call today.