Checks should be made payable to the U.S. Treasury and sent directly to the IRS, not the private collection agency.
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Cavanagh said taxpayers can also request an automatic six-month tax extension by filing IRS Form 4868 and paying any tax due by the original deadline. The taxpayer accounts assigned to the private collectors should already know they have longtime unpaid taxes. Both spouses must sign a joint return, even if only one spouse had income to report. Economists suggest that providing for more of a long-term benefit is better than the often temporary feeling of satisfaction found when splurging on something you have wanted but perhaps not needed.
The IRS has announced it’s four private debt collection firms, that will soon be calling you if you’re behind on your taxes.
“In instances such as when people are affected by natural or man-made disasters or have had a health crisis or family emergency, the IRS may provide special penalty relief to those who request a time extension to file their federal income tax returns”, she said. To do so, you’ll estimate what your eventual tax bill will be and then pay it to the IRS by the April 18 deadline. They will also give taxpayers the opportunity to question or appeal the amount owed. The deadline for filing a Form 4868 is also April 18, but the extension gives you until October 16 to get your return in order and filed.
Just when you are patting yourself on the back for filing your tax returns on time, it suddenly dawns on you that you made a mistake. You may cash that check while waiting for any additional refund. They told unsuspecting victims that they had failed to pay taxes or were at risk of deportation, and that a fast payment was needed to get out of trouble. Unpaid taxes can have serious consequences on your personal finances, including your credit scores if they go unpaid long enough.
The IRS collects information from your employer, financial institutions, and other entities that create tax information forms like W-2s, 1099s, and similar filings. If you have taxable income of $70,000 and a $4,000 tax credit, however, the credit reduces your tax dollar-for-dollar. Past-due federal tax bills must be paid to the IRS, not one of the agency’s collecting contractors.
You do have some rights; you shouldn’t be harassed over these debts just because it’s a government debt. When people owe tax, the IRS always sends several collection notices through the mail before making phone calls.
Speaking at the Savannah Chamber’s SMART lunch Tuesday, local tax attorney Jeffrey Williamson said the IRS is sitting on more than $1 billion in unclaimed refunds for an estimated one million taxpayers who didn’t file a return in 2013. Even if you transfer the money to them, you could be on the hook for paying taxes on the entire amount.
The newly expanded program, which began in February, adds efficiency to the department’s collection efforts, Greenberg said.
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The data book carries a letter from IRS commissioner John Koskinen in which he points out that “IRS resources have shrunk, demand for help from the IRS has surged in key areas”. These programs do not however assist with business tax returns or complex individual returns. If your taxes are relatively simple, you may still have the ability to timely file your taxes, either by mailing in your tax return or via electronic filing.
