Tax Issues: Avoid Tax Liens Today

Tax Issues Framingham MA

A tax lien is a hold that the IRS places on your assets to ensure that you pay your debt. This, however, should not be confused with a tax levy. The sole purpose, the IRS places a tax lien is to attempt to ensure that it receives the payment due for the unpaid taxes you owe.

There exist five ways by which taxpayers can likely avoid IRS placing a tax lien on them.  

Pay the Taxes You Owe in Full

Stop an IRS lien on its tracks by paying the taxes you owe in full. If you can afford to do this, the tax lien will not apply. When you want to make the payment IRS makes it possible for you to pay directly from your bank account, using your credit card, or through a third-party processing service. You can also use the Electronic Federal Tax Payment System (EFTPS) to make a safe electronic payment. You may also choose to go on a low-tech route and mail a check, money order, or personally deliver your amount to the local IRS office.

Enter into a Guaranteed Installment Agreement

If you owe less than $10,000, and cannot pay the entire tax debt in full, you can still avoid a tax lien, by making a plan for the Guaranteed Installment Plan. In this plan, you can set to remit your entire balance to IRS through monthly installment payments. The size of the monthly payout and the length of repayment will vary according to the size of your debt.

Streamlined Installment Plan

This method is applicable if you owe a sum ranging from $10,000 to $25,000 in unpaid debt of taxes. You can still avoid a tax lien from the IRS, by entering into a Streamlined Instalment agreement plan. The plan works in the same way as a Guaranteed Instalment Plan. The result is the same, and you eventually pay the entire debt that you owed in federal income taxes.

Reduce Your Balance

This method applies when you owe more than $25,000 in back taxes to the IRS. You, therefore, must reduce your debt balance to less than $25,000 to keep away from a federal tax lien. The payment has to be before the lien gets imposed on you. There is a relief when your unpaid tax balance goes below $25,000, and you are safe to enter into a Streamlined Instalment Agreement.

File for an Offer in Compromise

There are times you can only afford to pay back only a portion of the federal taxes you owe. You could still avoid a tax lien by going to file an Offer in Compromise. When accepted, the Compromise enables you to resolve your tax responsibility with the IRS for an amount less than the sum of federal taxes due. However, the IRS is strict about tolerating Offers in Compromise. The procedure to review Offer in Compromise applications is lengthy. There is also no assurance the IRS will not inflict a tax lien while you are waiting for the decision on your Offer in Compromise plea.

Resolve Your Tax Issues

Ash CPA offers assistance with tax issues for individuals and entities. Learn more by scheduling a consultation. Call (617) 462-6651 or book an appointment online.