Five Steps To Attack Your Tax Debt

Here at Tax Resolution Help Center, we’re big advocates of the DIY approach. Our hope is that we can empower everyday people through need-to-know tax information. If the average person can understand the rules of the game, then that person can play the game and win. These posts are designed to provide you with quick tips you’ll need to navigate your taxes. Here, we’re going to explore five practical steps you need to take to move towards freedom.

  1. – You’ll need to secure a transcript. How? You’ll need to visit the IRS website and sign up for their free online transcript service: https://www.irs.gov/individuals/get-transcript. The site will walk you through the information you’ll need to request your transcript. However, if you’re unable to access it online, you were normally allowed to request it by mail.[1] Why do you need your transcript? It’ll provide you with all of your return information, including your Adjusted Gross Income (AGI).
    – Okay, so you’ve requested your transcripts. Now what? You need to get your hands on your prior three years of tax returns. Why? It’s simple—this is probably where the tax debt arose. So, you need to examine these to know what your situation is. As you attack your tax debt, you’ll likely find you’ll need to amend previous tax returns. Now, you can only amend returns going back three years. Get ahold of those past three years of returns, figure out where to make amends, and tackle that tax debt.
  2. Get a tax transcript for the past 10 years or for the years you think they are trying to collect.
  3. Identify the ASSESSMENT The IRS has up to 10 years after assessment date to collect the taxes they say you owe.
  4. LOOK FOR THE COLLECTION STATUTE EXPIRATION. You might be wondering what the collect statute expiration means. This is the amount of time the IRS has to collect a tax balance. Okay, you think, so how much time do I have? You typically have 10 years from the date the IRS charged, or assessed, the tax. Take not that this is typically how the time works. Sometimes the time can be extended. Otherwise, you may be able to write off parts of your debt

So, you’ve decided to tackle that tax debt. Good for you! But often the reason we avoid the work is because we’re not quite sure what we’re doing. We may have a sinking fear that by addressing it we could make it worse. However, finding helpful tips makes this world so much more accessible. Follow these steps to your path to freedom.

[1] Due to corona, they’re no longer allowing mail requests, though.