Owing debt to the IRS or the State is a scary situation to be in. Unlike having an unsettled credit card debt or other forms of unsecured loan, the IRS or the State can impose legal sanctions against you such as wage garnishments, levy assets, and file a tax lien to seize properties until the tax debt that you owe is satisfied.
This is why it is best to have your tax debt issues addressed as soon as possible, regardless of your current financial situation. Fortunately, you may be considered for an IRS debt forgiveness program that can help you with your predicament.
Does this mean that I don’t have to pay my tax debt anymore?
Just like any lender, the IRS will do whatever it takes to collect on what you owe. And just like any debtor, it is your responsibility to pay off your debt, especially if you have the means and the capacity to do so.
The IRS Forgiveness Program offers a resolution for taxpayers who could not pay their tax debt in one go. However, this doesn’t mean that you are no longer liable to pay the IRS and your debt has been zeroed out. Your financial capacity to pay will be assessed to see which program best suits your situation in order to for you to pay off your debt without causing any hardship on your part. In the event that a taxpayer is undergoing extreme financial hardship, the IRS may put a halt on the collection proceedings until they see an improvement in the taxpayer’s situation.
What are my options?
Here are some of the IRS Forgiveness Programs that can help resolve your tax debt woes:
- Offer in Compromise (OIC)
An Offer in Compromise is an agreement between you and the IRS that lets you settle your tax debt for a reduced amount.
2. Installment Agreement (IA)
An Installment Agreement lets the taxpayer pays off their tax debt in low monthly installments.
3. Penalty Abatement
Typically for first-time taxpayers, this program is usually tied up with an installment agreement to reduce the interest.
This program is for taxpayers undergoing extreme financial hardship. Financial hardship of a taxpayer means they could no longer afford basic living expenses and put a payment towards their existing IRS tax debt. Only a Revenue officer from the IRS can determine whether the taxpayer is indeed experiencing financial hardship or not.
Can I do this alone?
When dealing with tax debt, it is always best to seek the help of an acclaimed tax debt relief organization. Tax issues are complicated, to say the least, and can be very disconcerting to deal with.
Ask for help. Having a professional handle your tax debt is necessary as they are more knowledgeable with regards to tax laws. This is one situation where mistakes are simply unacceptable because it can be very costly and you might end up having more problems than what you already have. Also, take time to research and read reviews regarding the debt relief organization you’ll be working with. Consider the feedback from the company’s former clients and see if the good outweighs the bad.
It is one thing to know that you will not be alone in facing such a daunting problems as a tax debt, but knowing that you will be working with a team that is worth every ounce of your trust will make all the difference.