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TAX LIENS
Settle, Remove and Improve Your Credit Plus Taxes & Bankruptcy

Seems to be one of the most talked about topics. How to settle taxes, remove them from your credit reports and generally rid yourself of the whole unpleasant experience. We'll cover it all and hopefully you'll be moving on in no time to less tax debt and better credit plus peace of mind!

How To Settle Back Taxes
There are countless stories of families, individuals and businesses being wiped out by the IRS. Tax issues are not uncommon. About ten million Americans are tax delinquent and another seven to ten million have not filed their tax returns in years. As astounding as these figures might sound they should hardly be surprising. With more new complex tax laws being established every year more and more Americans will end up at some point in debt with the IRS. Now don't get discouraged.

There is one good item of news. It is now easier than ever before to resolve tax issues with the IRS with an Offer in Compromise. Tens of thousands of Americans have discovered they can legally and easily solve their IRS problems. Many of these tax claims will be forgiven for as little as five or ten cents on the dollar, or even less. The IRS penalizes millions of taxpayers each year for not paying back taxes. They have so many penalties that it's hard to understand which penalty they are hitting you with.

The most common penalties are: Failure to File and Failure to Pay. Both of these penalties can substantially increase the amount you owe the IRS in a very short period of time. To make matters worse the IRS charges you interest on penalties. Many taxpayers often find out about IRS problems many years after they have occurred. This causes the amount owed to the IRS to be substantially greater due to penalties and interest. Some IRS penalties can be as high as 75%-100% of the original taxes owed.

Often taxpayers can afford to pay the taxes owed, however the extra penalties make it impossible to pay off the entire balance. The original goal of IRS imposing penalties was to punish taxpayers to keep them in line. Unfortunately they have turned into additional sources of income for the IRS. The IRS does abate penalties. Therefore before you pay the IRS any penalty amounts, you may want to consider requesting the IRS to abate your penalties. Learn how you can settle you back taxes at almost pennies to the dollar by downloading The complete guide to solving your tax issues - The Complete Guide to Resolving Your Tax Issues or let a professional debt negotiator do it for you and it's incredibly affordable. Learn more.

[ Finally, according to the IRS, offer and compromises are very doable- they're done everyday and here is a little of what the IRS considers: Generally, we approve an Offer in Compromise when the amount offered represents the most we can expect to collect within a reasonable period of time. Although each case is evaluated based on its own unique set of facts and circumstances, we give the following factors strong consideration in the evaluation:

The taxpayer's ability to pay
The amount of equity in the taxpayer's assets
The taxpayer's present and future income
The taxpayer's present and future expenses
The potential for changed circumstances ]

[Get the complete guide to settling taxes or get a free consultation with a negotiator]

The IRS Code states: "We will accept an Offer in Compromise when it is unlikely that we can collect the full amount owed and the amount you offer reasonably reflects the collection potential." Internal Revenue Code, section 7122.

Improving Your Credit
The ugly truth: Tax liens remain on your credit reports for 7 years from date satisfied not filed. If they remain unpaid they can stay longer, however they are only collectable for 6 to 10 years with some provisions see this link for more. Once a tax lien hits your credit reports you are in serious trouble. Not only do you have the IRS after you but now the lien has been recorded against your credit reports for the whole world to see everytime you apply for credit. While the IRS is not known for negotiating credit ratings there is a way to ensure maximum results.

First, you will want to determine that you do in deed owe the taxes that are listed on your credit reports. You'd be surprised how many credit reports have inaccurate ratings. If you have the documentation from the IRS about how much you owe then send off a request to the credit bureaus to validate the lien that's listed. The credit bureaus will begin an investigation wherein they'll send a request out to verify the tax lien. If it's unverifiable it will be removed- end of story. If it's reinserted by the IRS, you must be notified within 5 days of the reinsertion along with a valid reason why. If it is verified as accurate by the IRS to the credit bureaus then you need to decide how you'll go about paying it. Will you simply pay it in full, will you ask for an abatement, will you use a tax negotiator? These are all questions that only you know the answer to.

Once it's settled, paid dismissed etc., you then need to wait about 3 to 6 months and send another request to the credit bureaus to verify it. Chances are now that the IRS has been paid they won't even bother responding to the bureaus request and instead of being listed as "paid tax lien" it may be removed. On the other hand if you do not owe the tax lien and you have proof then you need to send the proof to the credit bureaus and the IRS and ask that it be dismissed. You should not have to deal with a negative tax lien if you never owed it to begin with. There are three ways a lien is listed;

-Paid tax lien (you simply paid it)
-Settled tax lien (you settled it and the IRS reported it as such)
-Dismissed tax lien (the IRS found reason it was invalid)

You need to determine which fits your situation but remember you do not have to settle for a "dismissed rating" if the darn thing was a mistake to begin with. Demand it be completely removed. If you owe state or federal taxes, you need to resolve them otherwise you risk a levy or lien against you your home or property.

Can taxes be included in a bankruptcy filing?
According to Doney.net, In order for tax to be discharged ALL of the following must be met:

-Returns on which the tax is based must be due more than 3 years before the filing of the bankruptcy;

Note: Income tax returns are usually due on the April 15 following the end of the tax year, but can be due later if the 15th falls on a weekend, or if the due date was extended.

-Returns must have been filed more than 2 year before the bankruptcy is filed; (Unfiled returns are not dischargeable in Chapter 7, but may be in Chapter 13.)

-If the tax is from an assessment, must be assessed more than 240 days before bankruptcy is filed.

-941 withholding tax on employees cannot be discharged.

-A Chapter 13 plan must pay any tax which is not discharged.

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Related to this page:

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Tax Code

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All about judgments

Find an Attorney in your area and free legal forms

Learn to settle your taxes yourself

Let a pro settle your taxes

Repair your own credit remove unverifiable tax liens

Have a pro repair your credit

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