When you owe multiple creditors, you may find it difficult to keep up on payments and get your accounts paid off in full. Despite your best efforts to pay, your creditors may choose to garnish your wages.
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Receiving a notice from the IRS that you've been selected for an audit is unsettling, but it doesn't have to be. An audit is not an accusation of wrongdoing. In most cases, it's simply the IRS requesting documentation to verify information on your return. How you respond, what you bring, and whether you have professional representation can make a significant difference in the outcome.
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What should you do after Tax Day if you owe taxes?
Realizing you owe taxes (especially right after Tax Day) can feel overwhelming. For many people, the instinct is to avoid the problem, wait until there’s more money available, or hope it won’t escalate quickly.
Unfortunately, the IRS doesn’t work that way.
[Editor's Note: This article was originally published in June 2012 but has been updated for accuracy and comprehensiveness.]
What does Currently Not Collectible mean with the IRS?
Currently Not Collectible (CNC) status means the IRS has determined you cannot afford to pay your tax debt due to financial hardship. As a result, the IRS temporarily stops collection efforts such as wage garnishments and bank levies, though your balance will continue to accrue interest and penalties.
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What should you do on Tax Day if you owe back taxes and can’t afford to pay?
If you owe back taxes and can’t pay, file on time, pay what you can, stay current on this year's taxes and explore IRS options like installment agreements or an Offer in Compromise to avoid penalties and collection actions.
Is It Better to File Taxes Early or Wait Until Tax Day?
Every year, taxpayers face the same question: should you file your taxes as soon as possible, or is it smarter to wait until closer to the deadline? The short answer is that filing early is best for most people, but waiting can make sense if your income is complex, documents aren’t complete, or you need extra time to plan strategically. Ultimately, the key isn’t speed. It’s accuracy, timing, and managing risk.
[Editor's Note: This article was originally published in February 2014 but has been updated for accuracy and comprehensiveness.]
How can I use my W-4 form to increase my paycheck or avoid tax debt?
If your tax refund was lower than expected (or you ended up owing the IRS) you may not be withholding the right amount of federal tax from your paycheck. On the other hand, if your refund was unusually large, you could be having too much tax withheld, reducing your take-home pay throughout the year.
Owing taxes to the IRS can be stressful...especially when the balance is substantial and interest and penalties are adding up. Fortunately, the IRS offers options that make it easier for qualified taxpayers to manage or resolve tax debt without digging deeper into financial hardship.
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What is audit representation and do I need it?
Audit representation is professional assistance provided by a tax expert to guide you through an IRS audit. Hiring an experienced representative can save time, reduce stress, and help you navigate complex tax laws to protect your finances.
[Editor's Note: This article was originally published in September 2013 and has been updated for accuracy and comprehensiveness.]
What is the difference between a tax lien withdrawal and a tax lien release?
A tax lien withdrawal removes the IRS Notice of Federal Tax Lien from public record as if it never existed. A tax lien release shows the debt was paid, but the lien remains in public record as “released.” Withdrawals offer a cleaner outcome and are available after payment in full or sometimes through a direct debit installment agreement.
