Is a friend or family member struggling with unresolved tax debt? Many of those who love someone in this position want to help in some way. But what can you do yourself to help them get past this big financial challenge? Here are five steps you can take.
1. Learn About Options.
Most Americans aren't aware of the potential routes they have to handle tax debt. So the best way to help someone is to learn for yourself what their options may be and how to access them. A qualified tax service can help you learn about things like payment plans, offers-in-compromise, audit appeals, and bankruptcy discharge.
2. Talk About Debt.
Money talk is often taboo in American culture, so many people suffer in silence. This is doubly harmful because they don't receive any physical assistance, and their anxiety levels may remain sky-high. Be open about your own money struggles if possible, encouraging your loved one to be more open about their feelings and challenges. Talking it out can be helpful, even if you can't do anything.
3. Take Them to a Pro.
A tax professional is one of the best places to start. If your friend or family member hasn't yet sought out professional assistance, make an appointment for them and take them. Ask if they want you to be part of the conversation or not. But even if you just serve as chauffeur, you know that they're getting the help they need from someone who knows what they're doing.
4. Get a Second Opinion.
Just because someone is told they owe taxes doesn't necessarily mean that it's correct. Collect the relevant tax returns and seek out a second opinion from a qualified preparer. This is especially important if the taxpayer prepared their own tax returns for any returns involved. Even if they used a service, verify that no errors were made and no deductions or credits were missed.
5. Consider a Loan.
Only if you have the means should you consider helping financially. But if you do, a lump sum loan may be able to help them get right with the IRS. This is particularly useful if any assets are at risk of seizure through a levy or if they can lower their debt through an offer-in-compromise. But make sure you follow the rules to draft a legal contract for the loan.
Want to know more about helping a friend or loved one fix their past tax debt? Stop by a trained tax preparation company that offers resolution services in your state today. Together, you can help them find a way out and come through healthier, both financially and mentally. For more information, contact a local tax resolution service near you.
