There are Solutions to Help You with IRS Debt.
No matter what type of income you have, whether it is income from work, income from investments or interest or even gifts or lottery winnings all count as income and the IRS has a legal right to their part of it. If you have found yourself in IRS Tax Debt, it may seem frightening and feel like there is no way out, but there is hope. The main thing you need to do is understand that from the moment the debt occurs until the time you make your last payment, interest and penalties accrue. Credit-yogi would like you to know that it is imperative that you not wait to settle your tax debt with the IRS, but begin taking real steps toward resolving the debt immediately to avoid damage to your credit rating and prevent a loss of assets. Although there are similarities, every case is different; feel free to take advantage of the free consultation offered by credit yogi.com tax experts and tax lawyers.
Five Basic Steps To Settle IRS Debt
- NEGOTIATE a 36 month payment plan
- Negotiate for a partial payment agreement
- Make an Offer in Compromise
- Prove that you cannot pay the debt at this time to temporarily stop collection efforts
- File Bankruptcy under Chapter 7 or 13
Negotiate a 36 month payment plan
This is the most standard payment plan offered by the IRS for repayment of back taxes. You have to meet certain qualifications to be approved, and interest and penalties continue to accrue during the payment time. It is also the quickest way to pay off your debt in a structured manner, and stop IRS collection attempts.
Negotiate for a partial payment agreement
This will constitute a longer repayment period, but it will also increase the amount of penalties and interest you have to pay, since those continue to grow until the full tax debt is paid in full. In the negotiation, your ability to pay will determine the amount of time you are given as well as the monthly payment amount.
Make an Offer in Compromise
In order to get the IRS to agree to an Offer In Compromise, you must provide proof that you do not, nor will you ever, have a financial ability to fully repay your tax debt. Once you have proven that fact, you are then allowed to make short term payments to repay a reduced amount of the total debt you owe.
Prove That You Cannot Pay the Debt at This Time to Temporarily Stop Collection Efforts
Credit-yogi.com tax experts can help you provide proof that you can’t pay even a part of your debt at this time in an effort to get the IRS to declare that they debt is uncollectible at this time. This does not erase the debt, but the IRS suspends collection efforts temporarily.
File Bankruptcy Under Chapter 7 or 13
As a last resort, you can declare bankruptcy under Chapter 7 or 13. The IRS will still be first in line to collect the tax debt you owe, but it could protect some of your assets and allow you time to work out a way to resolve your tax debt. IRS tax debt as it relates to bankruptcy is exceedingly complex, and if this is an avenue you want to explore, you will want to get a bankruptcy attorney who has extensive experience in bankruptcy as it relates to IRS debt.
While it is true that IRS tax collection is particularly aggressive, there are options available to you. Unpaid tax debt is one of the most difficult debts to discharge, so it is confusing and complex. Hiring an experienced tax attorney is going to be your best bet to get the situation resolved as favorably as possible, but knowing where to look for information and where to turn for that help will be your single best advantage to successful tax debt resolution. The IRS can pursue payment for unpaid tax debt going back up to three years, but there is a statute of limitations of ten years to enforce collections. The payment plan options offered help stretch out the payments and allow you to have some breathing room as far as collection efforts are concerned.
The main thing you MUST remember is that time is not on your side. You must act, and act quickly to resolve IRS debt. Failure to do so will only compound the problem by adding hefty penalties and interest. So, why wait? Get the ball rolling by taking advantage of the tools and information credit-yogi.com has to help you get started on the processes you need to understand and take advantage of to get your tax debt under control.