How to Delay IRS Collections to
Settle Back Taxes
By
Manuel Davis Jr.
When the IRS realizes that an
individual has outstanding back
taxes it begins its automated collection
system. Understanding the basics
of how this system works can allow
individuals to delay the IRS to
buy more time to get the money together
to pay the back taxes owed, while
slowing interest and penalties.
Once the automated collection
system starts on an individual,
they will begin receiving a series
of notices from the IRS. These notices
consist of an initial assessment
for back taxes owed plus any penalties
and interest. This assessment notice
is then followed up by a series
of CP-500 letters (CP 501-504).
When these letters start they come
off in a very nonthreatening manner,
each additional letter you receive
will become a bit more threatening.
After your receive CP 504 you will
receive a notice of federal tax
lien (NFTL) and this is where IRS
collections will begin. From first
assessment letter to the notice
of federal tax lien, this process
typically takes place in a period
of 4 to 6 months. It is best to
settle back taxes before you receive
a NFTL because this will hurt your
credit and make many financial problems
for you.
In order to gain more time from
the IRS without receiving additional
penalties is normally as simple
as asking. When you receive your
assessment letter or any of the
following CP letters you can simply
reply to the letter stating that
you cannot pay at the current time
and you would like an additional
45 days. You don't need to give
excuses, just simply ask and the
majority of the time they will grant
it to you. When you get this 45
days, someone in the IRS will input
a freeze code into the computer
that will halt the collection system
for 45 days. If you do not pay within
this period it will begin up the
collections where it left off before
and you will receive another letter
and you can do the same thing again.
This time it is best to send in
a little bit of money to show that
you are trying to pay. By asking
for extensions this will buy you
several more months to pay off outstanding
back taxes, sometimes because of
the inefficiency of the IRS it can
buy more than a year's time.
If you still find that you need
more time in order to settle your
back taxes, it is a good idea to
set up a payment plan with the IRS.
The most typical plan is an installment
agreement. The IRS has many settlement
methods they allow, if you want
to settle your taxes for less than
you owe it is best to consult a
tax professional to see if you would
qualify.
Back Taxes Help is a website
with all the information needed
to settle back taxes with the IRS.
As well as providing information
on how to solve your back taxes
problems we will connect you with
up to 3 tax professionals for a
free consult. Get your options and
likely outcomes for free. Find the
tax specialist that fits you best.
settle back taxes
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