If you owe the Internal Revenue Service back taxes then you may be interested in an IRS debt settlement. Owing back taxes to the IRS is not the best situation to be. Failure to pay taxes in a timely manner can result in a number of different negative circumstances for the offender. Taxes that are not paid in a timely manner accumulate interest and penalty fees. In addition, people who fail to pay taxes can have a tax lien placed against them which is recorded on the credit report, and in extreme cases can be incarcerated for failure to pay taxes. Your tax difficulties do not have to lead to tax liens or even incarceration. There are options for IRS tax debt settlement.
One of the most popular IRS debt relief options is the payment agreement. There are two types of payment agreements available via the IRS to settle a past due tax obligation. There is the monthly payment arrangement that allows an individual to pay off the full balance of the tax bill in installments over a specified amount of time. This is one of the more popular options as many people don’t have the full balance of their tax bills available upfront. This gives people the opportunity to pay off their tax obligations and prevent negative actions on behalf of the IRS in an attempt to collect the tax debt. The other option is the partial payment plan which allows an individual to pay of a portion of his or her tax debt in monthly installments. This is sometimes done when a person pays a lump sum on his or her tax bill and there is a remaining balance. It is more important to note that interest continues to accrue on the tax bill even while the bill is being paid. Because of this it is important that an individual stick to the payment arrangement made with the UIRS to reduce the amount of money owed over time.
Another option for tax debt relief is an Offer in Compromise (OIC). An offer in compromise is the option to tax debt by paying a lump sum option that is lower than the original tax amount. This option is taken by people who owe a lot of money in taxes and want to take advantage of the ability to settle IRS debt in one payment at a reduced amount. There are stipulations involved with the offer in compromise. Not everyone will qualify to take advantage of this option. The only individuals that qualify for offer in compromise are those that cannot pay their tax debt in full and those seeking this option must be willing to pay a portion of their debt usually between 10%-20% with the application. An application process for an offer in compromise is required and can take some time to process. If this is an option that interests an individual, then it is recommended that you contact the IRS to make sure that you obtain the necessary forms and include the required information with the application so that there are no delays when processing the application.
Tax debt relief is possible if an individual is willing to work with the IRS. The people who have the most trouble with the IRS are those who choose not to take the initiative and contact the IRS to find out the options available to pay off any past delinquent taxes. There are a number of ways that an IRS debt settlement can be initiated to help you pay off your taxes and regain a positive standing with the Internal Revenue Service.
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