This year, the Internal Revenue Service (IRS) tax deadline was extended from April 15 to July 15 to help those who are financially affected by the coronavirus. And, despite requests from taxpayer unions, small businesses and taxpayers to further stretch the deadline again to September 15, the IRS announced they will not extend the July 15 tax deadline.
Naturally, this is bad news for the millions of Americans facing financial strain in the wake of the coronavirus pandemic. A recent TaxAudit survey
reports that 37% of taxpayers are unable to pay their 2019 taxes owed, even with the July 15 deadline, and a whopping 61% of Americans fear they will be forced into tax debt due to the financial ramifications of COVID-19.
If you don’t have the financial resources to pay your tax debts right now, it’s important to know you do have options.
1. File for an Extension
Postponing your payment may be a viable option. Of course, the IRS will charge you for penalties and also for interest accrued after the deadline. Still, it can be an effective option to keep the IRS at bay while you financially recover.
You can also address your tax liability through an installment agreement which could draw out payments for up to six years. You may be able to extend payments beyond six years if your debt is more than $50,000.
2. Enroll in an IRS Installment Agreement
Be aware, however, that the rules and regulations can be confusing. We strongly advise that you contact one of our skilled tax specialists who understands the rules and regulations and can help you set up a tax installment agreement with the IRS.
In many instances, taxpayers can pay less than the amount they owe the IRS through an Offer in Compromise. Consult our tax professionals now to see if you qualify to reduce your tax obligation.
3. Consider an IRS Offer in Compromise
You may be able to avoid any tax payments right now if you qualify as “Currently Not Collectible.” You may qualify for this status if you can show the IRS that your monthly expenses exceed the amount of your monthly income. Of course, you must provide the IRS with supporting documents in this case.
4. Look into Currently Not Collectible (CNC) Status
The IRS Is Back at Work
During the early weeks of the coronavirus pandemic, the IRS was forced to close its doors. That is no longer the case.
Currently, the IRS is open, and they are actively processing taxes every day. Further, they are accepting applications for installment plans and reduced payments to help those who need it.
Not surprisingly, the department is also contacting taxpayers about their tax burden. If you owe taxes to the IRS, now is the time to get your tax situation in order.
The Bottom Line
According to the TaxAudit survey, nearly half of all taxpayers (49%) are fearful of the IRS contacting them about their tax debt.
That’s understandable, but it doesn’t have to be that way.
Rather than waiting for the IRS to contact you, you can be proactive and take matters into your own hands. After all, you could receive immediate relief through an installment plan or lower payments. You may even qualify to avoid making any payments at this time if you are designated as “Currently Not Collectible.”
Best of all, you may not even have to contact the IRS. Reach out to Advanced Tax Solutions now, and let us help you deal with the IRS and get you the tax relief you deserve. Our goal is to reduce your tax burden as much as legally possible so you can get back to your life.