California is one of the strictest states in the United States when it comes to taxes. Anywhere in the US, the tax authorities can audit the financial documents up to 6 years old, but here in California, the FTB (Franchise Tax Board of California) can audit as far as 20 years, depending on various scenarios.
You may not live in California for a really extended period and still owe CA FTB a huge amount of tax, which you are not even aware of until you received a bill from FTB. The taxes which you owe to tax authorities for previous years are known as back taxes in tax language.
In most cases, when the amount of tax liability is too high, and an individual cannot pay back taxes, they opt for bankruptcy as it is an easy way out. But if you intend to continue your business or job within Los Angeles, California, then going broke isn’t a good option.
How Can You Pay Back Taxes In Los Angeles, CA Without Going Broke – The Answers
We have all sorts of answers for you.
Here is how you can pay off back taxes in tax strict state without opting for bankruptcy:
Offer in Compromise: The very first step toward paying off back taxes is to offer in compromise. A taxpayer can request an offer in compromise form to California Tax Authority, that the FTB may accept a tax payment less than the amount due. Many factors play a role in offering a compromise, which may include taxpayers, health, age, earning potential (current and future), and the ability to pay. But most importantly, the CA FTB assesses what is in the best interest of the state.
Collection Delays: After settling for a lesser amount to be paid in back taxes, you may request a temporary extension to pay the tax amount in full. This option suits those individuals who have money stacked here and there and don’t have much liquid wealth.
Informal Installment Agreement: If you cannot gather the amount required to pay off back taxes within thirty days period, you may request an Informal Installment Agreement by calling CA FTB. Despite the fact that this option is called the Informal Installment Agreement, it doesn’t have to do anything with the installment plan. It is more like an extended delay in payment.
Installment Agreement: If the outstanding back taxes are high enough that the taxpayer cannot pay them even if he sold his property, the CA FTB may agree to award the taxpayer an Installment Agreement. In principle, if the tax amount exceeds $25000 and he can pay the same within 60 months or 5 years, the Board will make an agreement with taxpayers, where he will pay his back taxes within agreed upon time while CA FTB lien his property. After the payment is settled, the lien will be lifted.
Partial Payment Installment Agreement: When a taxpayer is unable to pay his monthly installment of tax, the taxpayer may qualify for a Partial Payment Installment Agreement depending on their current financial situation. This option is only available after assessing the taxpayer’s financial situation.
Paying your back taxes in Los Angeles, CA is not an impossible task that you must seek bankruptcy to avoid it. But the key to be able to pay off tax liabilities easily is your communication with CA FTB. Contact UTS now!