Who will be affected?
Some taxpayers had tax problems long before COVID-19 hit earlier this year. Maybe they addressed their tax problems. More likely, they buried their head in the sand as is often the case.
Now that we are in the middle of a pandemic, a whole new group of people and businesses that were otherwise fine will face tax liabilities higher than they can afford to pay. If not addressed quickly, this can lead to a number of other problems that come with the territory.
Waiting costs you more than you think
As anyone with a tax problem can tell you, you need to be proactive. Doing nothing ends up costing you significant penalties and interest. It also costs you more to resolve your problems down the road.
If you cannot afford to pay your taxes, we can get you into a payment plan based on the amount you can afford to pay. If that amount is zero, w can place you into not-collectable status.
Still, you may be wondering…“why should I go through the hassle if no one is bothering me?”
The answer is, if you don’t the IRS will file a lien. Even worse they may levy your bank account or garnish your wages. In addition, if you fail to file returns you are subject to penalties up to 25% of the amount you owe plus interest.
If you owe $100,000 in taxes, why would you want to add $25,000 to that amount rather than spending a few thousand dollars or less to prepare and file a return. Plus, it is easier to pay for one or two returns per year rather than needing to come up with the money to do several returns when you are under immense pressure to do so.
The last thing anyone wants to do right now is address their 2020 taxes. We understand how you feel but looking at things now can save you thousands of dollars or more going forward. If you think you will be unable to pay your income taxes come March and April of next year or your payroll taxes come October, it makes sense to reach out now. The fact is, some of us have more time now that may be the case when things get better.
The IRS looks at your finances in a manner similar to the way a bank would if you were applying for a loan. If they see your income is higher than the expenses they allow, they will want the difference. With some planning, you can get into an installment agreement or other remedy you can afford.
Pick up the phone and call us today at (800) 658-7590 or email us at email@example.com. We can get you the help you need BEFORE your tax problems get out of hand.
Matthew Cohen is a partner at the Tax Resolution Institute.