Tax Compliance, The First Step to Recovery

By
Education & Training with Law Office of James D. Wade

Alternate title: Why Being Current is the Key to Resolving Your Back Taxes

This may sound strange but if you owe money to the IRS, it is more concerned - at least initially - with your current tax situation than your unpaid taxes. While that may sound backwards, the IRS' reasoning is solid: taxpayers who get current with their tax obligations are more likely to stay good taxpayers well into the future.

What does it mean to be current?

So what does being current (or tax compliant as I call it) mean? First, if you haven't file the current year's tax return than file it. Second, if you owe any taxes on the current return that you pay the amount due in full as soon as possible. Finally, and if you are self-employed this is very important, if you are required to make quarterly estimated tax payments that you do so.

What are estimated tax payments?

If you are not familiar with estimated tax payments, here is a quick rundown (and by no means complete). If you work for an employer than your employer is going to withhold from your wages an amount to cover your overall tax liability. Self-employed folks can't pay themselves a wage so instead they are required to make quarterly estimated tax payments on the 15th of April, June, October and January of each year.

Why this is so important!

To put teeth behind this policy, the IRS will refuse any payment arrangement you make if you don't get into current compliance. The only exception is if you qualify for hardship status but that's doesn't apply in 99% of the resolution cases out there. So if you are already late into the year and you don't have the money to pay your taxes and/or make estimated tax payments than you are far behind the 8-ball.

So in summary, the first step to resolving your tax debts is not addressing your back taxes but making sure you are all set with your current tax obligations. 

If you or someone you know in the Portland, Maine area has a tax problem, please feel free to contact me directly at 207-299-0515 or by filling out my contact form.

 

James D. Wade, Esq.

Law Office of James D. Wade

53 Exchange St., Ste 400

Portland, ME 04101

207-747-5318

jwade@jdwadelaw.com

www.jdwadelaw.com

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Lending / Financial
Location:
Maine Cumberland County
Tags:
irs
back taxes
tax compliance
irs collections
getting current

Post a Comment
Spam prevention
Spam prevention
Post a Comment
Spam prevention

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
7,684

James Wade

Tax attorney serving clients in Portland, ME
Ask me a question
*
*
*
*
Spam prevention