How to get rid of your IRS tax debts

Posted by How To Get Out Of Debt on December 3, 2010 under Debt Negotiation | Be the First to Comment

How to get rid of your IRS tax debts

Author: Robin Williams

Tax debt can be stressful to deal with. If you owe back taxes to the Internal Revenue Service, then don’t fret as you’re not alone. Many Americans feel alone and under stress when faced with the crisis of tax problems. It is not that there are no ways of debt relief if you’ve incurred a huge amount of tax debts. Fortunately there are tax experts who are available to be your dedicated resource to save you the money while resolving your IRS tax debts. Read on to know about how you could resolve your IRS tax debts.

1. Opt for an Offer-in Compromise: If you file an offer-in-compromise, then you will have to agree to repay an amount that is much less than what you actually owed to the IRS. The IRS, too, at its discretion will accept less than full payment from the debtor. The offer-in-compromise applicants are required to start paying off their dues soon after they file an offer-in-compromise. You must also be aware that this is the only way in which you can settle your tax debts. This process is usually called debt negotiation and here you are also required to come to an agreement with the Internal Revenue Service. If they approve your application, then you can start paying off in lump sum monthly payments.

2. Currently not collectible: Currently not collectible means that the tax payer is not able to pay his tax debts any more. This is another debt relief option if you have a large amount of IRS tax debts. The IRS can only declare a taxpayer currently not collectible, only after he receives a letter of proof from the taxpayer stating valid reasons for his financial hardship. To complete this process, the taxpayer needs to fill up a form 433 F and submit it to the IRS revenue officer. Once it is approved, the IRS will immediately stop all collection activities.

3. Partial payment installment program: Debt negotiation for partial payment installment program is much easier than a negotiation for offer-in-compromise. It is also less time consuming than an OIC program. In a partial payment program, the tax debt is paid in full but you get the chance of paying it in regular monthly payments. After the installment agreement is completed, the rest of the debt amount is forgiven by the IRS.

4. Pay in installments: If you do not qualify for an OIC program, then a tax consultant may consider you for paying in installments. You have to apply to the IRS for changing your payment plan according to your financial condition. If you want to make a lump sum payment, you can also do that by applying with the IRS.

Taxpayers have several debt relief options. Thus, if you owe taxes to the IRS, consider taking the above mentioned steps to relieve yourself of debt burden.

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