Prepping for the IRS Reopening
Michael Raanan, MBA, EA ?? IRSvideos . com
Former IRS Agent | Owe the IRS? Visit IRSvideos.com
The IRS is reopening July 15, which means 2019 tax returns and payments are due. The IRS will resume enforcement, so now is a great time to handle your tax issues, before the date arrives. Many taxpayers are suffering due to COVID-19 and are in a better position to demonstrate financial hardship. Some individuals can renegotiate their IRS payment plans or secure a final settlement.
Demonstrating Financial Hardship
Individual and business taxpayers who owe the IRS must follow the proper procedures to prove the inability to fully pay their back taxes. When in IRS collections, you’ll need to provide an expense report with a list of everything you own, including bank accounts, investments, property, vehicles, insurance policies, and more. Proving a financial hardship to the IRS generally means you have no money left after paying for allowable living expenses. Note that allowable living expenses may be different from your actual day-to-day living expenses. The IRS defines allowable living expenses as food, clothing, housing, utilities, transportation, and out-of-pocket health care costs.
Renegotiating Your Payment Plan
If COVID-19 has created circumstances that made you unable to make payments, then there are several options you can explore. For example, you may get a reduced monthly payment plan, more in line with your current financial condition. However, you need to provide proof that you’re suffering from the effects of the coronavirus pandemic. Even new payment plans don’t prevent penalties or interest from accruing, and ongoing interest can even double or triple your total IRS debt. The IRS is more open to working with taxpayers at the moment, so it’s important that you reach out for assistance and don’t miss this opportunity.
Have Questions or Concerns?
Get your copy of "5 Serious Back Tax Mistakes to Avoid". If you owe IRS Back Taxes or received an IRS Notice, contact me at [email protected] or 949-260-4770.
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