Discover Ways To Repay Your Tax Debt
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.
Unfortunately less than 1% of these are actually accepted. The IRS will only ever accept this as a method of clearing your debt if they have reason to believe that you will never be able to pay your debt in full. For this reason an Offer In Compromise is usually seen as a last resort when all other options have been exhausted.
If you have penalties applied against your debt then you may be eligible for a Tax Penalty Abatement. Penalties may be added onto your debt if it has been outstanding for a certain amount of time. These charges are added automatically via a computer system. Due to this there are times when these penalties can be added in error. You can fight against these charges if you believe they are of the wrong amount or should not have been added at all. A tax specialist can help you with this.
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.
No matter how bad your debt is there is always a solution out there for you. It is important to keep yourself informed of your options and what you are eligible to claim. A tax specialist is the best person to ask for advice on this. They can also help you to reach a solution.
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