Can I Get The Interest Forgiven On My Taxes?

Unfortunately we cannot deal with the IRS to have interest forgiven for delinquent taxes. The only time the IRS forgives any interest is if they made a mistake in calculating some tax, and if they charged you with more tax than you should have been charged. Then they will forgive the interest associated with that overcharging but they will not forgive interest for any tax that you actually owe. They will forgive penalties sometimes, but never interest.

When Does The 10 Year Statute of Limitations For Collecting Taxes Begin?

The statute of limitations is a law that says the IRS can collect taxes only for so long and if they haven’t collected them by that time then they have to write off whatever remaining debt there is and the taxpayer is now free and clear of any taxes. The law says that the IRS has 10 years to collect the tax. These 10 years begin either when the tax return is due or when it is filed, whichever is later. For instance, for a 2007 return; if it is filed by April 2008, the statute would run out on April of 2018 but it does not begin running until the return is filed and assessed. However, if that same 2007 return was not filed until 2010 then the statute would not run until 2020 and that’s when the IRS would have to stop collecting.

There are a few things that can stop the statute from running for a certain amount of time. Bankruptcy is one of those things. So, if you enter into a bankruptcy, the statue stops running for the length of time that you are in that bankruptcy or if you file for an offer in compromise, the statute stops running for as long as that offer in compromise is being considered. There are a few other ways the statute can stop but those are the main two.

How Common Is It For People And Companies To Owe The IRS?

Unfortunately this is an occurrence that happens a lot more than people think. Even people that think they are following every process properly and think that they are walking a straight line could end up in some sort of tax trouble or end up with some kind of audit. There are certain red flags in the IRS computers that trigger audits. For individuals there are many instances why you could end up owing the IRS, such as bad information from somebody or a misunderstanding of how something should have been done. For companies, there might be a certain point where they are unprepared for an increase in growth or a certain type of expense treatment which that lack of being prepared can cause them to owe. So it’s not necessarily something that only people who are looking to avoid paying taxes end up in trouble, these types of problems really could happen to anybody for a multitude of reasons. That is why it’s so important to address it as quickly as possible and to have somebody that can help you get the IRS liability issue resolved. That way you can focus more on moving forward and going ahead with your business.

Is Someone More Likely To Be Audited If They Have Tax Debt?

When it comes to the IRS starting an audit, they consider a multitude of factors. However, the fact that you do owe taxes in the first place may lead them into viewing things more closely. However, it is not the primary reason why an audit would start. There are typically certain things on the actual return that can pop up as a red flag for the IRS, which they would want to then look at more closely. On a personal return this could be things like medical expenses or unreimbursed employee deductions or charitable deductions. You need to make sure that you have meticulous record keeping of because the IRS sees this as items that people tend to either completely make up or over exaggerate their expenses in order to reduce the liability. It’s things like that which typically give rise to an audit more than just whether or not you owe or are due a refund.

What Happens If I Simply Don’t Or Can’t Resolve My Tax Debt?

When it comes to resolving your tax liability, it may become apparent that the amount that you would be expected to pay back simply isn’t feasible at this given point in time. If that is something which arises, another avenue that we can look to explore is filing with the IRS to have a status that says that at this point in time, the client cannot afford to pay anything back to the IRS. This is known as a Currently Not Collectible status. It is an application process that you have to send to the IRS and show either the financial hardship or inability to pay at this given time.

Once this currently not collectible status has been granted, then it typically allows the taxpayer about 2 years to see about getting things together to be able to pay. After that roughly 2 year timeframe the IRS will reopen collections and then request the taxpayer to begin to pay or if their situation is still similar, that they reapply and update all of the previously provided information in order to extend their currently not collectible status.

For more information on Getting Interest Forgiven On Taxes, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 271-7940 today.

Office Location

11 McGee Street
Greenville, SC 29601

Phone: (864) 271-7940
Fax: (864) 370-3413
Toll Free: 1-800-216-1116