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Frequently Asked Questions about Tax Debt Help

Can a federal tax lien prevent you from getting a job?

Employers want to know whether potential employees have a history of drug use or employee larceny. Background checks are standard practice. Over the past several years, credit reporting services (TransUnion, Equifax, etc.) have decided to stop reporting Tax Liens. In the event that you paid your tax debt off seven years back or more, do not worry about it. National law says tax liens vanish from your credit report after seven years.
 

What should I do if I can’t pay my tax debt?

The IRS has an Installment Agreement available if you can not pay the taxes you owe. Before you agree to an IRS payment plan, consult with an experienced tax professional. The agency has many rules governing everything and that includes an Installment Agreement. Which option might work for you generally is dependent upon how much you owe and your current fiscal situation. The Internal Revenue Service additionally charges daily interest on unpaid tax bills, so the more time you wait, the more interest you'll owe.
 

How do you qualify for an Offer in Compromise?

The Internal Revenue Service offers a tax settlement program called an Offer in Compromise. The agency will approve an Offer in Compromise when the amount offered represents the most the IRS can expect to collect within the Statute of Limitations. The Offer in Compromise plan is not for everyone as not everyone is qualified and eligible. But, you would be surprised how many taxpayers are qualified and eligible to settle. 
 

Do tax liens ever expire and go away?

Yes, the collection of most every IRS tax liens finishes, and that would include yours. This is known as the Statute of Limitations on IRS collections. A tax lien will also go away after the Offer in Compromise has been paid. Statute of Limitations: The IRS is given a period of time by the Internal Revenue Code to collect the tax debt; after that window closes, you're free from your tax debt and also the IRS. The IRS is limited to 10 years from the date of assessment to collect back taxes, after that, the law bars them from continuing collection activities against you.
 

How can I get a tax lien removed from my account?

IRS tax liens become legally unenforceable when the collection window closes. The Internal Revenue Service will have a valid tax lien on your property, including your home after the collection statute of limitations expires. After the IRS cannot collect from you, they will make an internal adjustment to their books and credit your account for the amount of outstanding taxes, interest, and fees. IRS account transcripts may be obtained checking that you no longer owe them - they'll have a line entry along the lines of 'Time Frame To Collect Expired' and a resulting zero balance.
 

Will an IRS garnishment (tax garnishment, tax levy, wage garnishment) affect my credit score?

An IRS garnishment, whether on your wages or your bank account, will not be on your credit report. However, the mere fact that you do not have the money in your bank account or your paycheck is 70% smaller will make it harder to pay your rent, your car payments your credit cars, utilities, etc. So, in that way, your credit score could be affected.
 

Can the IRS levy my bank account or my paycheck without notice?

Yes, possibly no other action taken by the Internal Revenue Service is as devastating, more disruptive, and panic-inducing than an IRS levy on your checking account or savings account. With one order to levy sent to your bank, every cent you've got can be seized by the IRS, and employ it toward your tax bill. A tax levy on your bank account will seize whatever amount of money you have in the bank at the time of the levy. To capture any more, the IRS will need to send another tax levy to your bank. You have 21 days to get the money back.

A tax levy order to your employer will seize 70% to 100% of your paycheck. Most people know a tax levy as wage garnishment.  An IRS wage garnishment is continuous which means it will continue until your tax debt is paid in full or the tax garnishment is stopped and released. 

Can tax debt be forgiven?

Yes, you can settle with the IRS. You do not need to be "destitute" to be qualified and eligible for an Offer in Compromise. There are many factors that go into receiving a successful Offer in Compromise. 

 

If for a variety of reasons an Offer in Compromise isn't a tax relief option for you, our team of tax professionals and IRS problem solvers may be able to place you into Currently not Collectible status. If you deemed to be Currently not Collectible, you will no longer make any payments to the IRS. The Statute of Limitations will continue to run out. For every month that you are Currently not Collectible means, a month of IRS collection ability goes aways. Currently not Collectible status usually runs for 12 to 18 months before it needs to be renewed.
 

Does an Offer in Compromise agreement affect your credit score?

NO! An Offer in Compromise doesn't make a difference in your own credit score. The reason behind this is because credit services don't have any notion that a tax settlement has been submitted and credit reporting services no longer list a tax lien.

REMEMBER THIS: THE IRS WANTS TO ACCOMPLISH 2 THINGS. ONE (1 IS TO COLLECT MONEY AND THE SECOND IS TO CLOSE A CASE. EVEN IF THE IRS COLLECTS $100 AS SETTLEMENT OF A TAX DEBT THAT WILL SHOW AS A COLLECTION ON THEIR STATISTICS. OBVIOUSLY, THEY WANT A CASE CLOSED BECAUSE THEY ALWAYS HAVE NEW CASES TO WORK. 

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IRS Tax Relief Programs

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IRS Tax Relief Programs