Are you familiar with delinquent returns? Have you personally dealt with delinquent tax returns in your own life? Do you know what to do to get these taxes into compliance? Not knowing the answers to these questions can leave you in a vulnerable position with the IRS. When it comes to taxes, it is essential to be familiar with the basics of the tax process and what happens when you fall out of compliance with IRS regulations. Keep reading to learn more about delinquent returns, how to fix them, and how a tax attorney or tax lawyer from Central Tax Law can help!
What are Delinquent Returns?
Delinquent returns, or delinquent taxes, are taxes that you have failed to file or pay. These taxes are owed to the IRS and immediately fall into the delinquent category as soon as the payment or filing deadline is missed. When it comes to the IRS and taxes, there is no wiggle room when it comes to due dates and payment schedules, and not abiding by these can leave you in some serious trouble.
Some of the consequences of delinquent returns or delinquent taxes include steep penalties, fees, and interest that are all added on to what you already owe. The IRS may also pursue methods of collecting your tax debt, such as utilizing collection agencies, garnishing wages, or placing a tax lien on your property and assets. All of this starts as soon as you miss your payment or filing date, so it is essential that you stay on top of your tax situation to avoid facing any penalties and consequences of being delinquent in your taxes.
How to Get Into Compliance
If you do find yourself in this situation, however, there are a few ways to go about getting back into compliance.
Do Your Taxes
If you are simply just a little late on your taxes, the easiest way to avoid any further problems with a delinquent return is to file and pay immediately. If this is completed within eight weeks of a delinquent tax return notice, no further penalties will incur, and no further collections actions will be taken against you.
Establish Installment Agreement
Sometimes, the amount of taxes that is owed is more than what you are able to pay all at one time. If this is the case, don’t keep pushing them off until you have the funds. Instead, contact the IRS to set up an installment agreement (a payment plan) to start making progress on what you owe.
Pick a Partial Payment Plan
Similar to an installment agreement, a partial payment plan is typically selected when the full amount cannot be paid immediately. In some cases, the IRS is willing to take a lower amount over a period of time, which is considered a partial payment plan.
Offer in Compromise / Offer in Compliance
On occasion, the IRS is willing to take what is essentially a settlement, a payment all at once but for less than what the original amount owed was. This IRS offer in compliance or compromise most often paid as one lump sum, but in rare circumstances, the IRS may accept it as a few payments.
How Central Tax Law Can Help
If you have found yourself in a less-than-desirable situation with your taxes, and have delinquent returns that you are unsure what to do about, Central Tax Law can help. It may be advisable to hire a tax attorney or tax lawyer to assist you with determining your next and best course of action and guiding you through the process to ensure that you remain in compliance with IRS tax law. If you have questions about delinquent returns, get in touch with our experienced tax law team today!