IRS Help for Average Americans

Owing money to Uncle Sam is as American as apple pie. According to recent estimates, as many as twenty million Americans owe some form of back taxes. The federal agency whose job it is to collect taxes is the Internal Revenue Service (IRS). In addition to collecting around two trillion dollars in income taxes each year, the IRS also pursues people that owe them back taxes. The total tax debt now stands at over two hundred billion dollars.

In the wake of the economic recession, delinquent tax debt has been on the rise. Average Americans simply cannot afford to pay their tax debts on a timely basis and the IRS is not amused. Instead of granting people extensions during a difficult time, they are getting tougher on tax debtors.

When the IRS suspects that you did not report all of your income, they may select you for an audit. About one percent of tax filers in America are subjected to an audit. Most of them receive paper or correspondence audits in the mail. Just 22 percent of audited taxpayers were asked to come in for an in-person examination, according to IRS records. This is very bad news for the American taxpayer.

Because they are much cheaper, correspondence audits are on the rise and more people are receiving them. These audits-by-mail have jumped by 93 percent since 2003. Not surprisingly, tax audits have reached their highest rate of the past decade. Enforcement revenues are on the rise and the IRS plans on sending out even more audits next year. How do we know this? Because their enforcement budget has grown to a record high of $5.5 billion!

What is the average taxpayer to do?

Most serious IRS tax problems occur because people ignore letters from the agency. This is always a mistake. The Internal Revenue Service is not your average collection agency. You can’t simply avoid their call or ignore their correspondence and hope IRS tax problems will go away. They won’t! The IRS will doggedly pursue you until they recover every last cent you owe them, and then some! They have the power and legal authority to freeze you bank accounts, garnish your paychecks, and even to confiscate your personal possessions. The IRS can also assess a myriad of fines and penalties if their missives go unanswered.

Call a Tax Advisor Today!

As long as you respond in a timely matter, a correspondence audit may not lead to a full-blown audit. More often than not, the IRS will request additional documentation that may be able to answer any questions they might have about your tax returns. A professional tax advisor can help organize your documents ahead of time, which will make answering questions a whole lot easier.

If the IRS determines that you do owe them money, a tax advisor may be able to negotiate a payment plan for taxes. Because most taxpayers cannot afford to pay their tax debt in one lump sum, many are permitted to make monthly payments. A tax advisor may also be able to limit penalties and fines once a payment plan for taxes has been approved. And in the most serious financial situations, tax advisors can help you offer the IRS an amount of money that is less than your entire tax debt.