Discover What Tax Debt Solutions You Can Apply For
It is a good idea to make sure that you pay your taxes on time. If you do not then you will find yourself in debt to the IRS. Sometimes people end up in a situation where they are unable to pay back what they owe. If you find yourself in this situation then there are some tax debt solutions that could be of help to you. What help is available to you depends on the size of your debt and your current financial situation.
One way to get rid of your debt to the IRS is to make an Offer In Compromise. This means that you offer to pay a lower amount than what you owe. If accepted you pay this amount and guarantee to pay all your taxes for five years. You will need to sign a formal contract stating all of this which can be negotiated for you by a tax specialist.
However you should not rely on this as a way to get rid of your debt. In actual fact fewer than 1% of all Offer In Compromise contracts are accepted. The only way the IRS will accept one is if you can prove there is no way you will ever be able to pay the full amount. Therefore this is only ever used as a last resort.
Another thing a tax specialist can help you with is Tax Penalty Abatement. Sometimes charges or penalties will be applied to your debt if it has gone unpaid for a certain amount of time. As this is done by a computer and the charges are added automatically there is the possibility that they could be added by mistake or at an inaccurate amount. If you believe penalties have been placed on your account in error then you can fight to have therm dismissed.
If you have been owing money to the IRS for a long time then you may find that they apply a lien or wage garnishment in order to repay the debt. This could result in you finding it hard to cover your other bills. It this happens to you then you can apply for a Wage Garnishment Release. A tax specialist can help you to do this. The result will depend on your situation but it is possible that they could actually stop IRS collections.
An option which may be appealing to you is the IRS Payment Plan. A tax specialist could help to negotiate this for you. This is a good option if you are not able to make a lump sum payment. There are three types of payment plan. One is an IRS Tax Loan. You can apply for a loan which goes straight to pay off your debt. You then make monthly payments back to the bank.
Another option is the Short Term Payment Extension. This gives you more time to pay back what you owe. It can be from 10-120 days and all interest charges and late fees still apply. You can also pay in monthly installments with a term of up to 60 months.
You should never feel that there is no way out of your tax debt as there are many solutions that can be employed to help you. The main thing is to make sure that you are informed of what you are entitled to apply for. A tax specialist can be very helpful for explaining your options and then negotiating a solution for you.
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