Empire Tax Solutions

A Quick Look at the “What Ifs” for Struggling Taxpayers

Dealing with the IRS and tax resolution cases is never fun—not to mention time-consuming. It’s a federal government entity that has a systematic and meticulous way of working. Tax resolution cases are usually exhausting for taxpayers. You can’t confront or intimidate the officials into doing things through your way. It’ll just make matters worse for you.

When it comes to the IRS, patience is a virtue. Meanwhile, we are here to address your queries and clear any confusion.

Here are some answers that most struggling taxpayers look for.

What if there is a federal tax lien on my property?

According to the IRS, you can’t sell or refinance the home before satisfying the lien. If you have equity in the property, the tax lien is automatically paid from the sales proceedings when it’s sold. The exact amount of the liens paid depends on the equity. If the sales proceeds are less than the total lien amount, you can request the IRS to discharge the lien. Since we’re undergoing a COVID-induced economic downturn, the IRS is particularly active these days and approves discharge and mortgage restricting requests.

A tax ddebt relief officer working on a client’s case

What if I am insolvent?

Tax insolvency refers to a situation in which your total liabilities exceed your total assets. Any forgiven doubt doesn’t necessarily come under the insolvency exclusion and is not counted as income. The forgiven debt is only included if it was discharged in a Title 11 bankruptcy proceeding of it the debt qualifies as:

  1. Real property business indebtedness
  2. Qualified farm indebtedness

If you are eligible for any of these exemptions, head over to Form 982 and register your case with the IRS.

What if I can’t pay my tax in full amount?

If you can’t pay the full amount of taxes, don’t panic. You can still file your returns before the deadline and pay as much as you can. This will help you avoid fines and penalties. Your tax debt relief service can help you apply for a short-term extension to pay, temporary delay in collection, or an installment agreement. The agency can even negotiate with the IRS on your behalf and settle on an Offer in Compromise. A good tax resolution agency might even be able to help you waive penalties.

If you’re based in New York, there is no one you can trust with your tax-related woes better than Empire Tax Solutions. We are a full-service tax management service that caters to both individuals and businesses and represents them in front of the IRS. Get in touch to learn more.