Settling the tax debts of your own accord
There are many who may have had problems in paying down their tax debts; you are not the only one. So, there’s nothing to feel lost or dejected about this. If you owe quite a large amount in tax debt, there are some options which can help you solve the tax debt problem. The two main options are the installment payment option and the other is the settlement payment option. There are again various options under these two options, which you can avail of in order to pay off your tax debts. The tax debt settlement options work to help you down most of the tax debts.
Settling IRS tax debt
Some of the options under which you can settle your tax debts are:
1. Compromise offer – Offer in compromise provides the option to settle tax debt where you can pay less than the full amount owed. If you cannot pay off the taxes in full, you can try out this option. The circumstances which are considered to determine if you can make payments under this option are:
- Your ability to pay
- Your income
- The expenses and
- The asset equity
2. Penalty reprieve – If there are options for you to prove that there are valid reasons due to which you are having problems in paying down the IRS tax debt (due to non affordability), the IRS may allow you the penalty reprieve. At the least, on an approximation one-third of the tax debt penalty amount resulting out of non-payment of the taxes, may get abated by the IRS later. This significantly lowers the debt amount with regards to the taxes owed by you to the IRS.
3. IRS tax bankruptcy – If you think that you are going to qualify for the Chapter 7 bankruptcy, you can consider trying out this tax debt relief option. It is only the income taxes which can be discharged through bankruptcy, and that too the recent ones. In order to decide as to which of the tax debts can be included in a bankruptcy program, you can talk to your bankruptcy attorney. He/she may let you know about the requirements or the eligibility criteria for including tax debts in bankruptcy. However, you need to know that this definitely cannot be considered as a good option as always, because bankruptcy has a high negative effect on the credit and almost all your assets are going to be liquidated through this.
There is also the option for you to get the help of a tax professional. He/she may help you with settling the tax debts, and therefore help you in solving the tax debt issues. This process won’t be highly different than a debt settlement program, though the types of debts are different. So, these are the options you can have under the tax debt settlement option, and if you are having problems in managing your tax debts, you can try out these options based on the tax debts owed by you, and the level of your affordability.
George Adams is an independent Financial advisor and attached to some financial communities. He has vast knowledge in debt consolidation, debt settlement, etc. For information on debt settlement please visit here: http://www.debtconsolidationcare.com/de … ement.html.
Categories: Federal Tax, Income Tax, State Tax Tags: federal income tax, federal tax, income tax, tax code, tax law
The Consequences Of Tax Evasion In The UK
It is the job of the HM Revenue & Customs office, otherwise known as HMRC, to collect taxes from United Kingdom citizens, and it also will monitor tax payments to ensure compliance. If the HMRC has reason to believe that you may be evading payment of taxes, an investigation will be initiated, and you may face a number of consequences. As a resident of the United Kingdom, it is important to understand this process and the possible penalties.
The Investigation
The HMRC may conduct periodic checks of citizens to ensure compliance with taxation laws, and through these checks, the HMRC may determine that evidence is present indicating tax fraud or evasion. In other cases, a concerned citizen may provide the HMRC a tip that will instigate the investigative process. The investigative process involves the HMRC contacting you directly, and you may choose to comply and participate with the investigation or not. However, the investigation will proceed without your participation. Because of this, it may be in your best interest to work with the HMRC and to provide all documents and supporting evidence requested in a timely manner. Keep in mind that you are permitted to have professional representation during any meetings with the HMRC.
The Process
If your tax payment status is investigated by the HMRC, you may be asked to provide supporting documents or to prepare a disclosure statement to corroborate the amount of taxes that you paid. The HMRC may conduct its own investigation as well, and it may review your tax documents, receipts, bank statements and other financial data. The process may involve several meetings and hearings. Ultimately, the HMRC may determine that evasion did not occur, or you may be required to pay additional taxes. If additional taxes are owed, you may also need to pay interest charges and penalties.
The Consequences
The consequences of tax evasion in the United Kingdom can be damaging in a number of ways. Because those who are caught evading taxes must pay interest charges and penalties on the taxes originally due, there is considerable financial expense associated with this. In addition, many people will choose to pay for professional representation during this process, and there is cost associated with this. The names of those who are caught evading taxes will be published, and there may be an element of public humiliation that a tax evader will be forced to deal with. In addition, some cases of tax evasion may result in criminal charges, and this may cause the guilty party to face additional legal issues. As a final note, those who are caught evading taxes in the United Kingdom often will have their tax returns reviewed more carefully by the HMRC in the future, so there will be added pressure on the individual to ensure that their tax returns are filed truthfully and accurately.
Tax evasion is a serious matter in the United Kingdom, and it can have costly and long-term consequences on your life. The HMRC may be more lenient on those who come forward with their actions or who comply with investigations.
Sally is a content specialist for Francis Clark Tax Consultancy, a business based in South West England who provide tax consultancy services to over 400 firms, visit FCTC.co.uk to find out more.
Categories: Federal Tax, Income Tax, Tax Evasion, Tax Law Tags: tax evasion, taxation, taxes, united kingdom
Federal income tax changes to your January paychecks
Obama administration and US congress have agreed to the 2013 federal income tax rates, but it may affect your January paychecks. The Washington leaders are busy in a talk about 2013 income tax negotiations, but still no final agreement has been reached. UC process the payroll payments to many employees early in January and you will continue with federal income tax rates of 2012 till President Barrack Obama and Congress reach a final agreement and implement new guidelines for 2013 federal income tax brackets.
The new tax rates will be published once IRS offers the official guidelines and organizations will need to upgrade their payroll structure accordingly. Federal income tax rates for 2013 will be published along with IRS publications and new payroll system will not make any adjustments after fully implementation of new tax rates. But it is important to know that January paychecks will reflect the two tax changes;
- The updated 2013 California income tax rates resulting from income passage of Governor Brown and sales tax initiatives for 2013, under proposition 30.
- QASDI social security of employee will be updated from current value of 4.2 percent to new value of 6.2 percent tax rate.
It means 25 percent federal income tax along with 38.3 percent Medicare payroll taxes and 13.3 percent social security are going to federal income tax in 2012. For a middle-class tax filer, the average state income tax is 4.82 percent, which brings 43.12% to state and federal taxes.
Categories: Federal Tax, Income Tax, Tax Law Tags: corporate tax, federal income tax, federal tax, income tax, payroll tax, tax code, tax increase, tax reform