Every year tax season rolls into Portland, Maine, causing a bit of overwhelming for many people. Taxes can be confusing, and for those who get behind, things can get quite stressful.
Having tax debt, or back taxes, from previous years’ tax returns can really add up and create a lot of trouble for the taxpayer. If you find yourself in this position, you’ll want to learn about tax relief.
Tax relief is a great way to get legal help from professionals in order to settle your tax debt. When you turn your personal attention to legally relieving your tax debt, there are a number of options you can look into. Your tax lawyers will be able to help you choose the best option for your case based on the specifics of your tax situation.
IRS Payment Plans
When you owe a tax bill and need more time to pay it, you may be able to get a payment plan from the IRS. Payment plans are a great way to pay your back taxes, along with any fees and interest, in small monthly payments over a predetermined period of time.
There are two types of payment plans for taxpayers; short-term and long-term.
Short-term payment plans last for under 120 days and are for those with a maximum of $100,000 in tax debt, penalties, and interest. Long-term payment plans can last for over 120 days and are for those with a maximum of $50,000 in tax debt, penalties, and interest.
If you are looking for a payment plan to settle your back taxes, keep in mind that this option does not remove or stop penalties and interest. They continue to build until your tax debt has been paid in full.
Those who owe over $25,000 will have to make their payments via automatic withdrawal from their bank account. Payments made with a credit card or debit card will include a processing fee.
Offers in Compromise
Another option for settling United States tax debt is the offer in compromise. This program allows taxpayers to settle their back taxes for less than they owe. The IRS approves this plan for those who are able to show that they cannot pay their tax debt or that doing so will create an extreme financial hardship.
However, approval for an offer in compromise is less likely than approval for a payment plan. In fact, less than half of the applications for the program are approved.
Before applying for an offer in compromise, you should talk with tax lawyers to determine if it is a good option for you. This counsel will understand tax law and will be able to confirm whether or not your situation qualifies for the program.
When determining your qualifications for an offer in compromise, the IRS looks at your income and expenses, your assets, and your ability to pay. Through a free consultation, a tax attorney will help decide if you are likely to be approved for an offer in compromise before you apply.
To apply for an offer in compromise, you will need to pay a contingent fee of $205, which can be waived for low-income applicants. You will also need to make a non-refundable initial payment during the time of application.
Qualifying for the program requires being current on your tax return filings and not having open bankruptcy proceedings. Keep in mind that any tax liens or levies can be kept in place until your application is approved. Hiring tax lawyers or a certified public accountant can be a good idea to help you navigate through the offer in compromise process.
Currently Not Collectible
The third option for tax relief in Portland, Maine is to have your account placed in currently not collectible status. This is for taxpayers who are unable to pay both their taxes and living expenses. If you are approved for currently not collectible status, the IRS or state tax agency will cease debt recovery against you.
It can be difficult to obtain approval for currently not collectible status. You may need to complete a Collection Information Statement in order to show the IRS that you will be unable to pay your living expenses if you pay your tax debt. On this form, you will include information about your income and expenses.
Understand that if you are approved for currently not collectible status, the tax relief is only temporary. In fact, the IRS may review your case each year to see if your situation has changed in order to redetermine eligibility. Your tax debt remains when you are placed on currently not collectible status, and tax liens can still be filed against you.
Working with a Tax Relief Company
While you may be able to apply for tax relief programs on your own, the process can be confusing and stressful for many taxpayers. There are state tax relief companies out there that have expert tax professionals, such as tax attorneys and certified public accountants, available to help.
These lawyers understand the ins and outs of taxation, tax audits, deductions, judgments, and more. They know what it takes to qualify for each program and they can help you apply without issue.
Keep in mind that there are many fraudulent state tax relief companies out there. They often take money upfront and claim that they can help you qualify for programs such as offers in compromise or currently not collectible status, to either reduce or eliminate your tax debt.
If you decide to hire a tax relief company, you’re going to want to find one with a team of professional tax lawyers, CPAs, and enrolled agents. These tax professionals are licensed and qualified to represent you before the IRS or Maine tax agency and will help you get the tax relief you need.
The IRS Tax Relief Network has qualified tax professionals including experienced lawyers. They offer a free consultation to ensure that they will be able to help you before you hire them. The team at the IRS Tax Relief Network works with taxpayers in Portland, Maine to help them find effective tax resolution.
Tax Relief in Portland, Maine
The beautiful, populous city of Portland, Maine lies on the coastline of the state. From a breathtaking shoreline to a happening downtown, Portland is known for being a popular tourist destination.
People that live in Portland enjoy the exquisite features of the city, including the art galleries, restaurants, and boats off the shore. However, residents of the unique city can also get behind in their taxes.
The good news is, the IRS Tax Relief Network has tax attorneys that serve residents of Portland, Maine. If you live in the area and have back taxes, there are lawyers and other professionals who can help.