Tax debt can make it very hard for you to go about your normal life. It can even affect your business and can lead to very harsh consequences.
An IRS penalty can limit what you are able to financially do and can have serious consequences on your future. It’s important to take steps now to restore your reputation with the IRS so that you can have more financial opportunities down the line.
The tips provided here will help you settle your IRS debt.
Offer in Compromise
n offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship. We consider your unique set of facts and circumstances:
- Ability to pay;
- Expenses; and
- Asset equity.
The IRS generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time. Explore all other payment options before submitting an offer in compromise. The Offer in Compromise program is not for everyone. If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.
Get more details here: https://www.irs.gov/individuals/offer-in-compromise-1
Payment Plans and Installment Agreements
If you’re financially unable to pay your tax debt immediately, you can make monthly payments through an installment agreement. As long as you pay your tax debt in full, you can reduce or eliminate your payment of penalties or interest, and avoid the fee associated with setting up the agreement.
Before applying for any payment agreement, you must file all required tax returns.
Not currently collectible
A program where the IRS voluntarily agrees not to collect on the tax debt for a year or so. Currently Not Collectible means that a taxpayer has no ability to pay his or her tax debts. The IRS can declare a taxpayer “currently not collectible,” after the IRS receives evidence that a taxpayer has no ability to pay. This is a useful tool because you can file for a collection appeal to stop an IRS levy, lien, seizure or the denial or termination of an installment agreement. The collection appeal gives you the opportunity to explain how you think the situation could be solved without the IRS levy or seizure.
5. Tax Attorney
A professional tax attorney can help you get organized and help you navigate through the complicated waters of IRS debt settlement. I would highly recommend using a tax lawyer if you are no the type who enjoys number crunching and long hold times. A tax lawyer can help negotiate your debt on your behalf and in most cases will work for a flat fee. Other attorney’s might also work for a percentage of the debt you owe.
For a reliable local tax attorney near you, simply do a Google search or look up Yelp listings.