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IRS policy allows for taxpayer installment agreements

The IRS is reportedly more amenable in recent years to working out installment agreements with taxpayers who've gotten behind. The IRS also started a "fresh start" program in 2011 that attempts to assist late payers get back on the right track. One thing to remember if a tax filing deadline is approaching and a taxpayer in Nevada or elsewhere doesn't have the amount needed, he should file the completed return anyway.

A partial payment can be included or a note telling the IRS why there is no payment enclosed. This effort will cut out some of the penalties and will keep the taxpayer on the same page with the agency. As part of its attempt to get more user-friendly, the IRS also announced that it would file fewer tax liens, make it easier for taxpayers to request lien withdrawals, and in general expand installment plans and offers in compromise.

If the IRS decides to take a tough stance, it can seize all funds in the person's bank accounts by issuing bank levies, execute wage garnishments and use other techniques to pretty much crush a person's ability to function. IRS policy doesn't call for easy settlements with people who have assets and can pay. However, if you've had bad times and clearly can't keep up due to those setbacks, then talk directly to the agency and follow through accordingly.

Probably the key idea here is that the individual must keep an open line of communications with the IRS and the particular agent, if any. Disappearing into the woodwork when a setback occurs is interpreted badly by the IRS. The agency wants to hear from the taxpayer when anything changes or a delayed payment will occur.

If one's problems are complex enough to need professional assistance, it's recommended not to use anyone who is not well-versed in IRS procedures and who is not an experienced negotiator with the IRS. Do not fall for quick-fix aggressive advertisers -- some are not in good standing with the IRS or with the Nevada Better Business Bureau. It's best to consult with an experienced professional who deals with the agency on a regular working basis.

Source: investopedia.com, How To Negotiate Back Taxes With The IRS, Brian O'Connell, Feb. 6, 2014

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