Dealing with IRS debt or IRS tax debt problem can be stressful. In fact, getting in trouble with the IRS is indeed scary as they have more powers than anyone else to recover debt. They can take assets to cover the debt and that even includes your home. But panicking won’t make your problems vanish.
Stay calm and start taking action. Before anything else, ask yourself whether you wish to solve your tax debt problems by yourself, or with the help of a tax professional. Relying on your own efforts is rewarding but can be quite challenging. Hiring the services of a professional is the shortcut to success but it’s going to cost you some money.
Before You File Your Tax Returns
Study present and past tax returns. As the IRS can make mistake compute each item carefully. You might find out that you owe the IRS less than what’s written on paper.
Have you taken advantage of all tax benefits you’re legally entitled to? You’ll be surprised with the number of tax benefits you’re entitled to once you dig deeper for the truth.
Filing your income tax returns when some of the points in your return are still questionable will mean acknowledging that every amount stated in your income tax return is correct and accounted for. If there’s any chance that your tax debt might be reduced, amend your tax return to lower the amount you owe.
IRS Debt Payment Options
Contrary to popular belief, the IRS isn’t coldhearted in general. They actually allow taxpayers to choose which payment option they’d prefer to settle their tax debt in a no-fuss way. The following are your options for getting out of debt:
- Installment – By using the web application you can set up a monthly payment plan. You will need to pay a fee to set up or re-instate an installment agreement. Choose this option, however, if you are good at budgeting.
- Partial Payment Installment – When you meet certain conditions required for this plan, you’ll be able to take advantage of a longer term payment plan. You make regular monthly payments to the IRS and after you fulfill the terms of the installment agreement, they forgive the rest of your tax debts.
- Offer in Compromise – This is the only program that offers you to settle your tax debt for less than what you owe. You’ll be required to either pay a lump sum or make monthly payments.
- Not Currently Collectible – If you have no ability to pay off your tax debts send your evidence to the IRS and they will declare that you are “currently not collectible.” In this option they will voluntarily agree not collect your tax debt for a year or so.
So, check each option carefully. If you don’t think you can choose one option on your own, don’t hesitate to hire a professional in tax debt help. Make sure, however, the tax deductions you can get from the IRS debt relief plan can cover the cost of their services.