Tax debt occurs when an individual or business owes money to the government because they have either underpaid their taxes or failed to pay the full amount owed by the due date. This can happen due to various reasons, such as underreporting income, failing to file a tax return, miscalculating taxes, or not having enough funds to pay.
If tax debt is not addressed, interest and penalties can accumulate, making the amount owed grow over time. The IRS or state tax agencies may also take enforcement actions, such as wage garnishments, liens, or levies, to recover the debt. However, taxpayers have options like setting up payment plans, applying for an offer in compromise (settling for less than the full amount owed), or requesting temporary relief through hardship programs. It’s essential to address tax debt promptly to avoid escalating financial consequences.

At Jonjic, CPA & Co., APC. we can provide invaluable help if you’re facing tax debt. Here’s how a CPA can assist you:
Tax Debt Analysis: A CPA will review your tax situation, ensuring the debt amount is accurate and identifying any possible errors in your tax returns.

Negotiating with the IRS: CPAs can act as your representative, negotiating with the IRS or state tax authorities on your behalf. They can help set up payment plans, request penalty abatements, or apply for an Offer in Compromise to settle the debt for less.

Tax Compliance: They ensure that you stay compliant with future tax filings to avoid additional debt, interest, or penalties.

Tax Planning: A CPA helps create a strategy to minimize future tax liabilities, ensuring you avoid falling into further tax debt.

Guidance and Support: They offer ongoing advice, helping you understand your financial situation and find the best solution for paying off your tax debt without jeopardizing your finances.

By working with a CPA, you get expert support to navigate the complexities of tax debt and ensure a smoother financial recovery.