Dealing with back taxes can be a scary experience, especially if you’re facing the IRS alone. You might owe a small sum or a significant amount but know that this is a problem that you need to address very quickly before it can escalate to something worse. However, should you really hire a lawyer when you’re in this situation?
Getting help can be a wise move, especially if you’re unfamiliar with the laws in your area. Hiring a professional tax attorney can help you have someone who can negotiate and advocate on your behalf. They are also going to help you get out of trouble, settle what you owe with minimal to no consequences, and help you file correctly in the future. Finding a good preparer to help you with the credits that you might be qualified for is something that you should prioritize.
What are the Possible Consequences of Owing Back Taxes?
These liabilities are the unpaid taxes that you may have from the previous years, and they can result from claiming lots of deductions incorrectly, not reporting your full income, or failing to file in the first place. Regardless of how you got them, know that there are consequences that you need to face.
The IRS can penalize you, and the amounts can add up quickly if you leave it alone. With the accumulation, it can be harder to pay these debts, and the interest charges are also going to get accrued until the balance is resolved.
However, this is just more than the monetary policies because these unsettled bills can prevent you from keeping up with the rest of your bills. Skipping payments on your other loans because of hefty penalties can lower your credit score, and the higher utilization ratios can also be problematic.
Also, ignoring your back taxes could ultimately lead to more severe actions taken by the IRS, such as wage garnishment of up to 75% of your net income, and you’ll have difficulties in getting out of it. Read more info about wage garnishment on this page here. The bank levies can also be harder, where the freezing of accounts can happen for 21 days, and any automatic payments coming from them, like the ones for your rent, gas, phone bills, and other loans are going to stop.
Hiring a Tax Attorney – An Attorney’s Role in All of these
Hiring the right lawyers can be a smart move most of the time because they already know how to navigate these complex systems. They can help individuals not to get overwhelmed with the letters, and they can help you become knowledgeable in the process.
These experts can provide you with the guidance that you need, as well as review your financial situation, assess your options, see your current financial records, and negotiate a payment plan that you can definitely afford. They are going to submit an offer in compromise, and you can expect them to work hard to achieve the best possible outcomes.
When the case escalates, and you’re faced with legal proceedings, you’ll have someone on your side who will defend you. They can be well-versed with the laws, and they can increase your chances of winning. Any evidence presented will be argued in front of the administrative bodies and you can avoid garnishments with their help.
Handling various communications with the tax authorities is also part of their job. They can give you relief and help you avoid the stress of dealing directly with various agencies like the IRS because they are the ones who will do the talking. They understand the information that can be legally provided and protect your other assets in the process.
When Should You Hire Them?
Sure, if it’s only a small amount that you’ve forgotten to file in the last quarter, you can definitely handle these things on your own. However, there are certain situations where you may need their professional assistance, and one of them is if you’re facing a substantial fine because you owe a large back tax. It’s going to be very overwhelming, and hiring a tax attorney can guide you through this maze and help with the negotiations.
Another situation where hiring an attorney becomes crucial is if the IRS has initiated aggressive collection actions against you. This could include wage garnishment, bank levies, or even property seizures, and trying to deal with these issues alone can lead to further complications and financial hardship.
If you’re facing potential criminal charges related to tax evasion or fraud, it’s imperative to consult with an attorney immediately because the consequences of these charges can be severe and impact not only your finances but also your personal freedom. Others find it stressful to deal with tax laws and regulations, so they enlist the services of an attorney who specializes in these areas to help provide peace of mind knowing that someone knowledgeable is handling their case.
How to Choose the Right Attorney for Your Situation
It’s important to do your research and gather recommendations from trusted sources. Ask friends, family members, or colleagues if they have any experience working with attorneys and if they can recommend someone reliable.
Consider the attorney’s experience and expertise in dealing specifically with back taxes, and prefer the ones who have a proven track record of success in handling similar cases. This will give you confidence that they have the necessary knowledge and skills to navigate through complex tax laws you can find out more at this URL: https://www.britannica.com/money/topic/tax-law.
Another important factor to consider is communication. It’s essential to choose an attorney who is responsive and willing to listen to your concerns. Effective communication can make a significant difference in understanding your options and making informed decisions throughout the process.
Their costs and legal fees should also be taken into consideration. Don’t just automatically choose the cheaper ones, but consider the quality of legal representation that they can provide. Their assistance is an investment that you need to make in order to avoid hefty penalties, so they are definitely going to be worth it.
What do you think? What would you add?
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