Taxpayers in the United States have lots of tax obligations not only to the federal government but equally at local and state levels. Overly, it is challenging keeping up with all these obligations, and from time to time, individuals and businesses fail to satisfy these needs.
Since all agencies mandated with tax collection right from the IRS to local agencies have enforcement authorities, such failures open doors for legal actions. These actions often begin with professional audits, which are the basis for creating examination reports that show the problem at hand. It is from these reports that the right course of action is determined per state and federal tax laws.
Taxes in California
Besides the IRS, California taxpayers have obligations to the State of California Franchise Tax Board for their income tax and Employment Development Division for employment & payroll taxes. For the income tax, the responsibilities are dependent on several factors such as: age, number of dependents, and filing status. On the other hand, there are vital areas on employment and payroll taxes that have to be taken into account by all businesses and organizations in the state. These are:
- Employment training tax
- State disability insurance
- Unemployment insurance
- California personal income tax
All these obligations do not, however, keep an individual or business free from federal tax requirements, which must equally be met. It, therefore, calls for lots of attention and professional handling of all tax obligations to avoid problems with the state or federal government.
The truth is that sooner than later relevant tax agencies will discover the slightest issues with your paperwork and come knocking. Once the failures to meet your tax obligations have been proved, you will then have personal liabilities as of the responsible party.
In most instances, the agencies will require you to settle your tax debts that are generally compounded with interests and penalties. At the worst, you could be charged with a felony for willful failure to meet your tax obligations, and this often comes with the realities of serving prison time.
Handling California Tax Debts
Once you have been slapped with tax debt in California, it is not an end game for you, as most taxpayers naturally assume. A fact that has to be accepted is that while the taxman does not take violations in meeting obligations lightly, there is flexibility in meeting your mandates.
Tax debt is, as such, not a ticket to desperations and getting into deeper financial problems. Instead, it is a legally binding call-to-action that is oriented in ensuring you meet your past tax obligations.
Nevertheless, it is flexible enough to take into account your current financial situations. Primarily, neither the state or federal government ever has the aim to tax you into a financial crisis as this invalidates the essence of taxations.
The obligation to pay tax debts in California is often marked with having a large tax bill that is never easy to pay off. This is largely why you have to look into suitable tax relief solutions that will reduce or eliminate your debts. Since these strategies are legally backed; this is not a journey to take alone if you want timely and satisfactory results.
Tax attorneys come in handy if you risk paying massive amounts that are insurmountable, as they will guide you into finding a suitable solution. Generally, there are lots of options that can be utilized by these professionals, these include:
- Appealing the tax debt or penalties. A tax attorney can find the right legal basis to appeal the tax debt and have it re-evaluated or withdrawn. This is a demanding process that must be expertly handled as it involves identifying determinations that you disagree with and backing them with facts. It takes a seasoned tax attorney to take advantage of this strategy to ensure you do not have a debt that has been exaggerated.
- Offer in compromise. This is a strategy that allows you to make a lump-sum payment or have a payment plan to settle the tax debt for less than owed. The right approach to this technique will easily see you save a lot as it takes the bulk of the burden off your back. Over the years, lots of California residents have benefited from the technique, and it is practical in lots of instances.
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