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3 approaches to resolving tax debts

Tax season does not always result in federal tax refunds for people in Maryland. A variety of reasons could cause someone to owe taxes at the end of the year and face challenges in coming up with the money for the Internal Revenue Service. According to the IRS, tax penalties hit roughly 10 million people every year. A tax bill cannot be ignored, but people sometimes have options for gaining more time to pay or negotiate a settlement.

Private tax debt collectors

Many people living in Maryland experience difficulty paying their federal taxes. While these individuals and couples may make good-faith efforts to work with the IRS, sometimes these efforts fail. The IRS is permitted to contract with private debt collection companies to pursue delinquent taxpayers.

E-filing can carry risks of late tax payment

Taxpayers in Maryland are increasingly using e-filing technology to submit their tax returns to the Internal Revenue Service each year. Tax returns must be filed each year in a timely fashion in order to avoid potential penalties. In the past, this simply meant mailing off a paper return before the due date, and the famous "mailbox rule" applied to tax returns filed close to the deadline. Lines at U.S. post offices were a frequent sign as April 15 approached.

IRS stepping up enforcement of "nanny tax"

Maryland residents may not think much of paying a household worker in cash. However, it may be a mistake to not withhold payroll taxes for those who made more than $2,000 in either 2016 or 2017. While children and parents are exempt from this requirement, others such as maids and gardeners may be subject to the nanny tax. Those who are classified as independent contractors will pay their own taxes at the end of the year.

How to avoid serious IRS penalties

A Maryland resident who owes money to the IRS could lose the ability to leave the country. The IRS can ask the State Department to not issue a passport or to decline to renew an existing passport. Typically, the IRS will only do this if an individual owes $50,000 or more in back taxes or more than $50,000 after penalties and interest are accounted for.

You do have tax resolution options: The Offer in Compromise

Since its inception, our blog has dedicated considerable time to discussing the many tools or "enforcement options" the Internal Revenue Service has at its disposal. As disconcerting as this type of information can be to learn, the purpose hasn't been to cause unnecessary alarm, but rather to impress upon people why it's so important for them to take federal tax matters seriously.

Why you don't have to feel powerless against tax authorities

If you were to find a random letter from the Internal Revenue Service or Comptroller of Maryland in your mailbox, chances are good that you would experience a tremendous sinking sensation. Indeed, you'd probably be reluctant to open this unanticipated correspondence, fearful of whatever presumably bad news was contained on the pages within.

Tax obligations and vacation property

It may come as an unwelcome surprise to learn that we're already approaching the midpoint of summer. While this is never really a welcome reality -- especially for those of us who live in areas with long winters -- the good news is that there is still plenty of time left for vacations and other warm weather activities.

Why are Baltimore County residents being told to disregard property tax bills?

While there is perhaps no better feeling than owning your home or the structure in which you conduct your business, this possession of real property comes with a host of real responsibilities. Indeed, not only is it your responsibility to make repairs and secure insurance, it's also your responsibility to pay both the mortgage and, of course, property taxes.

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