Acquiring a tax bill letter from the Revenue Service (IRS) can be stressful. When these letters begin to pile up, things become more complicated. The greater the number of letters, the greater the arrearage. As a result of being under such duress, you are prone to making rash decisions, which will land you in hot water.
After receiving an IRS letter, the first thing is to remain calm and thoroughly read it. Contact a tax relief assistance professional for assistance with further proceedings. The most common blunder believes that they will quit sending letters if you do not respond. In reality, these same penalties will be increased if you do so.
To keep you from panicking and making bad decisions after receiving an IRS audit letter, we’ve gathered a list of common mistakes to avoid. Follow these steps and see how calmly you respond to your following tax liability letter.
Avoid These 7 Tax Liability Relief Mistakes
Responding incorrectly to the Internal Revenue Service’s tax arrearage letter is one of the worst mistakes you can make. Furthermore, if you do not reply, you are exacerbating the problem for yourself. So, let’s look at the mistakes to avoid when receiving an IRS tax liability letter.
1. Waiting for the issue to be resolved
If you owe the IRS money, you cannot get let go of it unless you pay it. If you believe that attempting to avoid the letters will solve the problem, you are mistaken. Even if they do not dispatch a follow-up letter, this does not rule out further inquiry.
The IRS must contact thousands of Americans, so following up with you may take some time. They will, however, eventually get you. It is also worth noting that the penalties will become more severe as time passes. As a result, it is prudent to respond to the IRS letter on time and pay the tax amount owed.
2. Failure to Consider All Installment Options
If you have a significant tax debt, installments appear to be a viable option. The installment agreement is a contract signed by the IRS and the delinquent taxpayer to pay taxes in installments. This way, you can pay the debt in installments without going bankrupt. However, you may make the error of selecting an expensive installment option here.
The best action is to contact a tax professional and seek their advice. They will advise you on all of your options and assist you in selecting the best one for your situation. As a result, if the IRS offers you an installment plan, do not accept it until you have exhausted all other options.
3. Trust the Scammers
When you are in arrears with the IRS and considering seeking professional assistance, many companies will try to con you. These people will contact you through social media, text messages, or even emails and make false promises.
They may claim that they will waive all of your taxes or that they can settle your IRS arrearage in a matter of minutes. Don’t fall for any of these ruses. Such businesses will only defraud you and will not provide realistic solutions. The IRS has its process and timeline for tax relief, and there is no way around it. As a result, avoid such businesses and ensure that you follow the proper protocol for tax payment.
4. Doing It All Yourself
You are not taxed skilled, and there is a good chance that you will be unable to comprehend the jargon in an Internal Revenue Service tax liability letter. As a result, contacting a tax professional is the best option.
They will not only clarify everything to you in layman’s terms, but they will also inform you of your options. Hiring a tax professional is preferable to making poor decisions and paying a significant tax liability. The procedure is lengthy and involves a substantial amount of paperwork. Even minor errors can land you in hot water. As a result, hiring a tax professional and completing all necessary paperwork is the best decision you can make.
6. Withholding Information
Hide documentation, and other IRS statements are the worst thing you can do. This will undermine your credibility and make them distrustful of you in the long run. It’s not like the IRS can’t get their hands on all of your Information. They can do so with a single click, and the contrary evidence will raise their suspicions, prompting them to conduct a thorough investigation into you. This could expose numerous loopholes, putting you in a much worse situation.
7. Failure to Respond on Time
When the IRS sends you a letter, you must respond as soon as possible. The response should be balanced and by the instructions, but it should not take too long. This is the case. If you do not react on time, liabilities will increase. Therefore, if the letter needs an answer, it is good to respond in due time.
The letters from the IRS are not always scary. Even if you have a tax liability, it is simple to resolve. Seek professional assistance and respond appropriately. Going with the flow and working calmly will quickly get you out of such arrearage problems.