The economic conditions that have been
prevalent in the past few years have seen many United States citizens
suffer a backlog when it comes to how much tax they owe. It’s not
unusual to hear that one owes the IRS years of back taxes. Generally,
people are seen to drift towards the Offer in Compromise program.
Though it works for a few but it doesn’t really work for all.
However, there’s some good news for those straddled with back
taxes. If you’re one of them, then you should know that the IRS is
providing quite a few options to lessen your back taxes.
How to pay off tax debt
There are quite a few options that you
can consider when it comes to
your debt settlement
. Read on to know
more:
-
The installment agreement
Through the
installment agreement you can consider other options while making
minimal payments through installments. If you opt for the installment
agreement, then you give out the impression to the IRS that you’re
interested in making payments and the IRS won’t really take further
collection action.
This installment
agreement is mostly meant to focus on reducing your payments to the
government. You get some time to manage everything better. Remember
this kind of an agreement needs to be mutually agreed upon before
going forward with it.
-
File your past tax returns
You can actually
go ahead and reduce tax debt by filing or amending your past tax
returns. If you’re looking for a direct reduction of liability,
then filing of an original or amended tax return is the right option
for you. Other instances where filing a tax return late can prove
beneficial for you is when you’d receive a refund from your taxes
withheld in the span of a year or from a particular credit.
-
Offer in compromise
In spite of the
fact that you must be well aware of the offer in compromise option,
yet you should know the particular circumstances under which offer in
compromise can prove to be the right option for you. If you happen to
have very high liability and your capability to make payments through
income and liquidation is really low, then offer in compromise is the
right choice for you. However, in this case it’s crucial that you
don’t have any delinquent returns and you should’ve made all the
estimated deposits and
tax payments and you definitely shouldn’t be
in an open bankruptcy situation.
-
Hire a tax professional
If you’re having
problems in talking to the IRS officials, then it’s advisable that
you go ahead and hire a tax professional. There’s also the option
of hiring a tax attorney who’ll help you in solving your tax debt
problems and related issues or perhaps talk it out with the IRS to
arrive at a better tax debt solution for you.
Now that you know the different options
available when it comes to clearing your tax debt, there’s no
reason why you should be worried anymore. Get working on your tax
debt issues as soon as possible.