Sometimes a taxpayer who owes the IRS more money than they can afford is allowed the chance to pay off their debt in an installment plan. With a successful negotiation that payment plan should be something that they taxpayer can afford. However, sometimes taxpayers find themselves defaulting on the payments and falling out of compliance with the IRS. This is not a good thing and can have dire consequences.
When you are late with a monthly payment when paying back the IRS after getting an installment agreement then you have defaulted on your agreement. This means that the IRS can come back and demand full payment. They may even start levying your accounts, assets and wages and use everything they have in their collection arsenal to come after you. Suddenly, you may find yourself back in the nightmare of IRS problems that you were trying to avoid by creating the installment agreement in the first place. You also may find that the IRS is harder to negotiate with and even more aggressive than they were before. For this reason staying in compliance with the IRS can be just as important as getting in compliance.
It is important that you not only stay in compliance for your repayment plan but that you also continue to file your taxes on time and accurately every year. By having prior tax problems or IRS audits your chances of being audited by the IRS have increased. Maintaining a consistent track record going forward and keeping accurate records will help you avoid trouble later. If your past problems were exacerbated by a lack of record keeping on your part then make sure you learn from that mistake and organize your records from now on.
A good basic start to organizing your records is to follow the following tips:
- Maintain at least three years worth of tax returns and records.
- Copy your records and keep them in separate secure areas to avoid loss due to computer problems, fires, etc.
- Keep your bank records and checkbook stubs.
- Keep your receipts from all of your purchases and categorize them throughout the year
- Track the costs for all of your property and taxable investments
- Keep organized files and file all of your bills.
- Keep a journal of all of your deductible items and update that journal as they occur.
- If you feel overwhelmed or you feel you need help staying on track in the future then find reliable help.
We realize that at times staying in compliance can be difficult, especially for busy people who have a lot of other obligations to focus on. For this reason, in order to help our clients now and in the future we decided to offer a Compliance Program. By taking advantage of this program our clients can have us monitor their IRS files. We can keep you up to date on your repayment plan and we will make sure that from now on you get your taxes filed.
Basically, this program protects you from your potentially bad habits or from forgetting some important dates while you are busy with the rest of your life. It helps ensure that your taxes are being prepared correctly and that you are staying on track. Contact us to find out more. https://chicagotaxteam.com/contact-us/