Tax Debt Archives

Taxes After Death: Who Is Responsible and What to Expect?

15 January, 2025 | Tax Debt Tax Laws

Summary When someone dies, their estate is responsible for paying any outstanding tax debt. The executor of the estate must file a final tax return and pay any taxes owed before distributing assets to heirs. Heirs do not inherit tax debt, but they may be responsible for taxes on inherited income or property. Surviving spouses may be responsible for their deceased spouse's tax debt if they fil... CONTINUE READING

Is the IRS Fresh Start Program

5 January, 2025 | Tax Debt Tax Help

Summary The IRS Fresh Start Program was initiated in 2011 to help taxpayers struggling with tax debt. It is not a specific program, but a set of changes to existing laws and programs, including increased tax lien thresholds, easier installment agreements, and expanded Offer in Compromise options. The program's goal is to help taxpayers get back on track and avoid aggressive collection tactics. While legitimate, the term "Fresh Start Program" has been misused by some tax relief firm... CONTINUE READING

What Happens to Your 401(k) If You Owe Taxes to the IRS?

18 October, 2024 | Tax Debt

Summary Yes, the IRS can take your 401(k) for taxes owed if you fail to pay your taxes in full and on time. The IRS has broad authority to levy assets, including retirement accounts, to collect unpaid taxes. However, the IRS generally only takes this action as a last resort after other collection efforts have failed. To protect your 401(k) from an IRS levy, it's crucial to be proactive about your tax debt. Respond to IRS notices promptly and work with the IRS to establish a... CONTINUE READING

Can the IRS Take All of Your Wages? Wage Garnishment Explained

17 October, 2024 | Tax Debt

Summary The IRS can garnish wages to collect past-due taxes if taxpayers fail to pay or make payment arrangements. The amount of garnishment depends on factors such as wages, pay cycle, tax filing status, and dependents. The IRS follows specific rules, allowing them to garnish a substantial portion of a paycheck. Wage garnishment is a common IRS levy to ensure consistent progress in tax debt repayment. To prevent wage garnishment, taxpayers can explore payment options like installme... CONTINUE READING

Can You Go to Jail for Not Paying Taxes?

13 October, 2024 | Tax Compliance Tax Debt Tax Fraud Tax Penalties

Summary Individuals who intentionally evade taxes can face criminal charges and potentially go to jail. Tax fraud and tax evasion are felonies, with penalties including fines and imprisonment. Nearly two-thirds of people convicted of tax fraud receive prison sentences, averaging 16 months. The IRS Voluntary Disclosure Program allows taxpayers to file back taxes and avoid prosecution if they voluntarily disclose their failure to file and make an honest attempt to pay. Tax authorities... CONTINUE READING

Can the IRS Freeze My Bank Account? What You Need to Know

9 September, 2024 | Tax Debt Tax Penalties

Summary The IRS has the authority to freeze funds in a taxpayer's bank account up to the amount of their tax debt. The IRS typically sends multiple notices before levying an account, giving the taxpayer time to address the issue. There are various reasons for the IRS to freeze an account, such as significant tax debt, non-compliance, or fraudulent activity. If an account is frozen, the taxpayer has 21 days to respond before the funds are sent to the IRS. Options to release a freeze... CONTINUE READING

What Is IRS Form 433-F Used for? Tips and Instructions

8 September, 2024 | Tax Debt Tax Help

Summary IRS Form 433-F (Collection Information Statement) is used to gather detailed financial information about taxpayers applying for specific tax relief programs. The form helps the IRS determine eligibility for alternative payment plans, including partial payment installment agreements and payment plans for high-balance tax bills. Taxpayers may need to file Form 433-F if their tax debt exceeds $50,000 and they want to make an installment agree... CONTINUE READING

What If You Don’t File Taxes for One to 20 Years?

8 September, 2024 | Tax Debt Unfiled Tax returns

Summary The consequences of not filing taxes vary depending on the amount owed and the time elapsed since the last filing. Failure to file on time incurs penalties and interest, which increase over time. After three years, unclaimed refunds are forfeited, and the IRS can take collection actions, including liens and levies once there is an unpaid tax bill and a certain amount of time has passed. Filing back taxes involves gathering financial d... CONTINUE READING

NY State Tax Warrant: What to Expect and How to Resolve

24 August, 2024 | Tax Debt Tax Help

Summary A tax warrant in New York is a legal claim by the state on personal and real property due to unpaid income, sales, or other New York State taxes. The Department of Taxation and Finance (NYS DTF) issues tax warrants, and they create a lien against assets, allowing the state to seize wages, income, and assets. Consequences include asset seizure, wage garnishment, and publication of tax debt. Tax warrants follow individuals regardless of where they... CONTINUE READING

Overcoming NY State Back Taxes: Relief and Consequences

24 August, 2024 | Offer in Compromise Tax Debt Tax Issues Tax Relief

Summary New York State taxpayers who are unable to satisfy their tax payment or filing obligations may face consequences such as tax warrants, wage garnishment, asset seizure, and penalties. Relief options include requesting penalty abatement, setting up monthly payment plans, exploring the Offer-in-Compromise program, filing for Innocent Spouse Relief, and utilizing the Voluntary Disclosure Program. Appeals against tax assessments are also possible. Unpaid taxes resu... CONTINUE READING

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