Tax debt can have consequences that affect a person's livelihood. In fact, the Internal Revenue Service could even begin taking money directly from the paychecks of a taxpayer who owes a balance and has not paid. This can be distressing for any Massachusetts resident as wage garnishment can significantly reduce a person's income.
It may seem as though the IRS holds all the cards, but that simply is not true. Taxpayers here in Massachusetts and across the country may not be aware that there is a Taxpayer Bill of Rights. Number six on that list is the "right to finality," which means that they have the right to know the maximum amounts of time they have to take certain actions and the maximum amounts of time the IRS has to take certain actions.
Many Massachusetts residents are behind on their tax payments. It happens, and its nothing of which to be ashamed. If you find yourself in this position and you fail to take steps to rectify the situation promptly, you may find the Internal Revenue Service taking the matter into its own hands. One way it may collect taxes owed is by garnishing your wages. What makes the IRS unique is, unlike other creditors, it does not have to obtain a court order to issue a wage levy.
Even during the current circumstances plaguing the country, there are still people out there who would take advantage of others for financial gain. Each year, the IRS identifies certain tax scams to watch for, and some of them come into play after Massachusetts residents file their tax returns. Below are just a couple of the scams people may want to be aware of.
So many unprecedented events occurred in the first part of 2020. One of them was that the IRS postponed tax day to July 15 to give people affected by current events extra time to deal with their tax situations. However, few people here in Massachusetts -- or elsewhere for that matter -- anticipated the scope and far-reaching ramifications, especially to people's financial situations.
Few Massachusetts residents would argue with the assertion that it has been a tough year so far. With everything that has been going on, many people have struggled financially. This could certainly affect what they do come July 15 when income tax returns and estimated taxes are due, and the IRS is expecting those payments.
As businesses here in Massachusetts and around the country reopen, many feel the crunch as they attempt to catch up on matters that have been unattended to in recent months. And they are not the only ones. The IRS has been stockpiling paperwork and paper returns, and as more employees return to work, they have an arduous task ahead of them. Even as taxpayers must meet the July 15 deadline for filing their federal income tax returns, the agency is not saying how long it will take to get caught up.
Massachusetts residents may feel as though they have no power when it comes to dealing with government agencies other than those provided in the United States Constitution. Fortunately, that is not always true. Certain agencies such as the IRS must provide taxpayers with certain rights when dealing with them.
Many people here in Boston are among the millions of people across the country who are not working right now. Those fortunate enough to receive unemployment benefits are also receiving an extra boost from the federal government to make those payments go further. However, anyone in this position should know that the IRS and the state of Massachusetts tax those benefits, and they need to be prepared for that.
Periodically, Massachusetts taxpayers find themselves opening mail that does not bring the good news. Perhaps the IRS made a decision with which an individual does not agree, but the person does not realize that he or she can challenge it. Doing so is number four on the taxpayer bill of rights.