The Internal Revenue Service (IRS) tax debt is a serious issue, but it can be resolved. The key to dealing with this situation is understanding your options and taking action. If you’re looking for information on how to get your life back on track after falling behind on taxes or if you want to learn more about the process of dealing with tax liability, we’ve compiled this guide full of helpful resources and answers.
Dealing with Back Taxes
The IRS can help reduce or eliminate your tax claims, but they need to know that you want to get out of debt. They will work along with you and recommend a payment plan that allows you to pay off your debt within three years. The sooner you notify them about your situation, the better the chance of finding a solution that works for both of you.
The IRS will have its plan for paying back taxes and understanding how much money each month goes toward taxes can be confusing and intimidating. However, the IRS makes it easy by providing several scenarios based on income level so that people like you don’t have any excuse not to contact them if something happens, such as losing their job or getting behind on bills.
Solving Your Tax Debt Problem
Tax debt relief is a way to get your life back on track again—without worrying about how you’ll manage on top of all those other bills! Once we help settle your accounts, there won’t be anything weighing down on your shoulders or taking up precious space in your wallet anymore–and best of all? You’ll be free from the pressure of constantly thinking about what bills need paying next month or if there will be something coming out soon if they don’t have enough money saved up right now.
With the offered tax debt relief services from our experienced professionals who know what they’re doing, every step along this process could turn into something very different than it used to be.
Reducing Your Tax Liability
One of the best methods to lower your tax bills is by negotiating a payment plan with the IRS. This will allow you to pay off your debt over time instead of all at once, which can be financially challenging. In addition to reducing your monthly payments, this plan may include interest-only payments during the first two years and a partial reduction of penalties and fees through various programs.
Another option is applying for an Offer in Compromise (OIC), where you offer a lump sum amount that’s less than what you owe for them to accept it as payment on their end. If taken, this means that they’ll drop any other attempts at collecting from you—and no further interest or penalties will accrue from the date of acceptance onward. You’ll still have to pay the remaining balance before getting approved; don’t expect it all at once!
If none seem like feasible options, consider applying for an installment agreement or request one if necessary: both would allow monthly payments until everything’s paid off—but only if there are no other alternatives available.
Paying your back taxes in full to save money.
Ideally, you can pay your tax debt in full to save money and avoid getting accrued penalties and interests. However, most of us just cannot afford to settle in lump sum.
- A payment plan
If you’re able, making regular payments until the IRS is satisfied with your situation is an excellent option for taxpayers who don’t have the funds to pay off their taxes in one lump sum. This helps them avoid accruing additional penalties and interest, which makes their tax debt more expensive and time-consuming to resolve. However, if making smaller payments doesn’t work for you, or if you’ve tried, but it hasn’t been effective, it may be time to look into other options (such as setting up an installment agreement).
- Negotiate with the IRS on your behalf before filing bankruptcy because this may reduce what they’re owed overall—but only do so after getting professional advice from an attorney who understands both state law and federal law relating specifically IRS collection actions taken against them.
See if you qualify for OIC (Offer in Compromise) to reduce the amount of your debt.
You can apply for an OIC if you think that your tax debt is too high to pay. You might be eligible for an Offer in Compromise (OIC) if:
- Your situation has changed since you filed your taxes, like a job loss or serious medical condition.
- The IRS says there’s been a mistake on their part.
- You don’t have the money to pay off your debt due to financial circumstances beyond your control, such as the taxpayer’s death or family or job loss.
Request penalty abatement to reduce interest and penalty charges.
The said agency will begin demanding interest on your balance when you have an unpaid tax debt. And if that isn’t bad enough, they also add penalties to your account. These charges may result in a monthly payment that is more than what you can afford to pay. Fortunately, there is something called penalty abatement available to taxpayers who need some relief from these charges and penalties.
Penalty abatement is not the same as an offer in compromise or a payment plan; it’s a request for reduced or eliminated penalties and interest based on certain factors such as:
- Whether you have been cooperative with the IRS during collections efforts
- Whether your financial situation has changed for reasons beyond your control since you first became delinquent on paying back taxes
Apply for an installment agreement to repay taxes over time.
If you can’t pay your tax debt in full, consider applying for an installment agreement with the IRS. This allows you to repay the taxes owed in monthly payments over months. If you are approved, no penalties or interest will be assessed while you make repayments.
Whatever your reasons for falling behind on your taxes, be sure that you move quickly to get things resolved with the IRS or state tax authorities.
Whether your tax bill is due to a sudden financial setback or an ongoing struggle, it’s essential to act quickly. The longer you wait, the harder it will be to get out of the mess.
The IRS may not come knocking on your door immediately; they’ll first send out a letter asking for payment and giving you time to catch up with what’s owed before moving forward with collection tactics such as seizing assets or garnishing wages. However, if you don’t take action after receiving this notice and make no effort to pay off what’s owed, there is a good chance that they will eventually come after you somehow.
If you’re facing a revenue claim, don’t panic. There are numerous tax debt relief alternatives available to help you get back on track. Now is the time for a fresh start! With the proper strategy in place against the IRS, we can get all your finances back in order so that you can keep moving forward this year and beyond.
Contact us now for a free tax consultation.
