Did you know that about 32% of all taxpayers have no idea whether or not they’ll get a refund?
Tax season is coming, and soon there will be a lot of folks with IRS tax debt. Most won’t have to worry, since they asked their employer to withhold taxes each month. But for those who didn’t, as well as business owners and freelancers, the clock is ticking.
If you’re already in tax debt, you may be unsure how you can obtain IRS tax debt relief. Fortunately, the IRS understands that things can be rough when money is tight.
Keep reading for the best ways you can settle your IRS tax debt.
Use a Tax Debt Compromise Program to Pay off Tax Debt
If you can afford to pay something, but not the full amount, then consider the IRS OIC (offer in compromise). Essentially, you make an offer to the IRS of what you can afford to pay. Then the IRS accepts or rejects that offer.
If they repeal your request, then you can appeal this decision. However, it’s unlikely that they’ll accept your appeal, so consider other options at this point.
To get this option, you will have to make two payments within 24 months. You will also need to have filed your taxes before applying.
Use an IRS Tax Debt Relief Program like Installments
If you can afford to make the payment, just not now, then you can agree to spread out payments. This way, you pay your outstanding tax debt at a slower pace over the course of months. You will still have to pay the full amount this way, albeit without any penalties.
You will have to file your taxes already to apply for this option. Miss the deadline and you may suffer penalties.
The only way to get the installment option is to have a tax debt of less than $100,000. There is a fee to set up the payment plan, too. This can be a maximum of $225.
File for Bankruptcy
If your tax debt is insurmountable and you have no way of paying it off now or later, consider filing for bankruptcy. In some rare cases, you can obtain IRS tax debt forgiveness.
This may seem like a scary option, but filing for bankruptcy is not as bad as it seems. It will destroy your credit, but then you will have the option to start anew.
Keep in mind, this is dependent on a lot of factors. You should probably see a lawyer before going this route. This is the nuclear option and assumes you have no assets to sell off aside from your home and car.
Find an IRS Tax Debt Relief Program Today
Tax debt can be a scary thing when the IRS sends the debt collectors after you. But luckily, there are some options to pay outstanding debt with reduced penalties–or reduced amounts. Know that there are restrictions for these options and it’s rare to get full tax forgiveness.
Follow our blog for more informative articles.
