The coronavirus came and took the world by storm, forcing everyone to seek “shelter at home” and to change their daily habits in an effort to “flatten the curve”. This meant shutting down businesses, and within a week, millions of Americans found themselves out of a job.
Businesses who had record sales at the beginning of March, found themselves near insolvency by end of March. Despite a $2 trillion stimulus bill, the economy will undoubtedly take a bit hit and need time to recover.
People who were already in debt and behind on their taxes are finding it really difficult to keep up with the day to day expenses, let alone cover past bills.
As an expert tax resolution firm, we help people who find themselves behind on their taxes- often through no fault of their own. In this article, we are going to walk you through what you need to know about taxes and the COVID-19 pandemic, including tax relief options you can take advantage of.
Please Note; If you were negatively affected financially by the COVID-19 Pandemic and you find yourself behind on your taxes, contact us for a free, no-obligation, confidential consultation through our contact page at www.lbstax.com.
Here is What You Need To Know
New Filing Deadline: July 15th 2020
The IRS announced late March 2020 that they’d be extending the filing deadline for the 2019 tax year. The new deadline is now July 15th and the IRS won’t be tacking on penalties or interest, regardless of how much taxes you owe.
This means you have a bit more time to gather your documents, search for new deductions, pay, and file your taxes. It might not be a true tax relief, but it’s a good opportunity to seek expert advice and a better tax resolution option. As of this writing, this is the only major new tax relief option for the average taxpayer.
Settle Your Tax Debt for Less than You Owe
The IRS has a program that allows you to settle your tax debt for less than you owe IF you meet certain criteria. They take a look at the following:
- Ability to pay;
- Expenses; and
- Asset equity.
With the coronavirus affecting taxpayers’ income and asset values dropping, it creates a better case for what’s called an Offer in Compromise. It’s important to structure it properly in order to have a good chance of settling for less than you owe. A qualified tax resolution firm like ours can help.
Get a Break from Paying Your Back Taxes
If the IRS agrees you can’t both pay your back taxes and cover your reasonable living expenses, they may be able to place your account in a “Currently Not Collectible” status.
You can request currently not collectible status by submitting the proper form and proof to the IRS of your income and expenses, as well as whether you can sell any assets you may have or get a loan. As you’ll need to be able to document your inability to pay, be sure to gather copies of all your bills, your most recent paycheck stubs, and statements detailing other sources of income such as alimony, pensions or investments.
Keep in mind that this particular status type applies only to your back taxes. You will still have to file tax returns, and you will not be exempted from paying current and future taxes. You will also continue to accumulate penalties and interest on your unpaid taxes. After a year or two, the IRS may review your status, and if you’re able to begin paying your back taxes, then you must do so. If you still can’t, then your status will be renewed.
What to Do Next?
There are other tax relief options that the IRS has under normal circumstances, and with the coronavirus’ news changing literally every hour during the pandemic, it’s important to have the best tax resolution firm in your corner so you can get through these challenging times.
Remember, you’re not alone, and you have options. More than 13 million Americans had already found themselves behind on their taxes before the pandemic started, and many millions more will find themselves behind.
Our firm specializes in tax resolution, and our experts help during this COVID-19 pandemic. We also serve clients virtually, so don’t hesitate to reach out. If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.