No matter your financial status or situation, the IRS has an option for you regarding the settlement of your owed back taxes. If you are one of the thousands of people every year who don’t have the necessary means to pay your taxes owed, the absolute worst thing you can do is ignore the problem. Ignoring you obligation to the IRS will undoubtedly result in penalties both financial and legal, and the interest on an IRS debt will grow at an excessive rate. Knowing this, the Internal Revenue Service has devised plans to help debtors settle their debts without legal action.
Seek Professional Help
In any case problem tax issues, attaining the services of an experienced tax professional is always the first suggestion given. A tax attorney's main function in such a situation is to consider all of the elements of your specific situation and come up with a detailed plan for the solution that best suits your financial needs. Though there is an initial cost associated with hiring a tax professional, in the long run he or she can save you a substantial amount of money by handling your issues for you and making sure every step is completed both accurately and in a timely manner.
Installment Agreements
Creating an installment agreement with the IRS is typically the first and most common avenue pursued for back taxes.
- Once your agreement has been accepted by the IRS, they will refer to you as being up to date and current so long as your minimum payment requirements are mad on a monthly basis.
- If you are not able to make the installment payments agreed to in the initial installment agreement, you may be able to make a Partial Payment Agreement.
- This agreement grants you the ability to make reduced monthly payments, which may end up being less than your total original taxes owed.
Proof of Financial Hardship
If you aren’t able to pay your tax obligation to the IRS due to job loss or disability that impedes you from generating income, you may be able to prove financial hardship and have your tax obligation negated. This option requires that you possess no assets, cash, or have any other means of payment in order to settle your tax debt.
Statute of Limitations
In most cases the Internal Revenue Service is allowed a period of 10 years after the date of their assessment finding you liable for tax debt to collect funds from you and satisfy the obligation. If they have failed to collect the debt from you in the 10 year period, they are allowed to take no measures in order to obtain funds from you.
Getting Help
An experienced attorney can provide you with the guidance and advice you need to settle back taxes. They can assist you in interfacing with the IRS and coming to a solution that works for you and your finances.
