If you owe money to the IRS on taxes, you should find out some way to pay off the due amount. Otherwise, things can get complicated. There are various ways in which you can try resolving your IRS tax debt. You can try to do it on your own or else, you can also try to get help from the debt settlement companies to resolve the tax debt problem.
Resolving IRS tax debt:
Resolving your tax debt on your own is not much of a problem because there are various ways in which you can pay off your IRS debts. This is because the IRS encourages the tax payers to pay at least what is possible for them. The different types of IRS pay off agreements are:
1. The installment agreement – In installment agreement you can make a payment each month (installment) on the back taxes. This helps you to pay off the taxes that you owe to the IRS. Installment agreement types–
* Partial payment
2. Offer in Compromise – In OIC or offer in compromise you are not required to pay the full tax amount that you owe to the IRS. The IRS allows you what the debt settlement companies do for you in case of simple debts. There are some terms and conditions which you will have to abide by while making OIC payments, otherwise the IRS can revoke the OIC.
3. Currently not collectible plan – In Currently not collectible plan you won’t have to pay your back taxes at least for the time being. This is one of the best debt relief options for you, if you are now without enough cash to handle all of your expenses. You will have to pay off the debt at a later date.
The thing is that you will have to try and pay off your taxes. If you are facing problems you will have to talk about that to the IRS and they will offer you any of the above agreements as per your financial condition. However, if they are able to find out that you intentionally trying not to pay the tax, you may get seriously penalized.
Each person wants to settle tax debt in any way possible and there a lot of ways on how to settle IRS debt. Each way to pay these debts depends upon the account and the status of the individual. It is very important to settle tax debts because if not, you may be submitted to high interest rates and increasing penalties. To know appropriate procedures on how to settle IRS debt, it is advisable to deal directly with the Internal Revenue Service (IRS).
Actually, the first and the most basic step is to communicate with the Internal Revenue Service about your accurate budget for paying your tax debts. You need to be honest with your budget so that the IRS can adjust lesser amount than the huge account you owe if you have small budget. You can even settle IRS debt through a partial payment instalment agreement. This means that if you are not able to meet the requirements to pay a certain amount for an agreed period, you may be able to appeal for a smaller monthly payments.
If you are having a hard time understanding how to settle tax debt, you may already need a certified public accountant or a lawyer to help you deal with this tax problem. These tax analysts and experts will also be able to set you up with the correct settlement method and possibly lower the amount you owe.
When the time comes that you have already gone through with your problems in tax debts, make sure that you will be able to pay right in time to avoid these kind of situation for the second time around. If you are having financial problems, make sure that you communicate with the Internal Revenue Service about your situation. But still, it would be nice if you get rid of your IRS debt.
In some circumstances that you are financially unable, the Internal Revenue Service will review your status every couple of years. If you are proven eligible that you cannot settle tax debts, they will stop collecting against you. If you continue to be uncollectible for 10 years from the date you are assessed, you will be no longer responsible for the amount of tax debt you owed from the Internal Revenue Service.
- IRS delays filing of key deductions (chron.com)
When it comes to debt management, scams are also difficult to avoid. Actually, there have been reports about people losing their money because they have been victimized by some debt settlement scams. Thus, they ended up losing more money than what they originally owe.
Assistance through debt management services
Eliminating debt is possible with the help of debt relief companies. You can easily search for them through online or you can ask for your friends’ referral. The reason why it is important to do background check on the company that you are eyeing is that because scamming is very rampant nowadays. Many people have ended up getting victimized by debt management companies into thinking that they are going to be helped. Instead, they ended up in more debts because the debt management company ran off and took their money with them.
What are the things to look for in a debt management company, here are some:
Years in business
Companies that have been in the industry for long are more reliable compared to new players. While it can be very unfair to the small companies, it pays to go for the companies that have the expertise rather than a new comer. This will ensure that you and your money are in good hands. It can be very risky to gamble your luck in trying out a new company when you know a good debt management in the industry that have been doing business and serving many people through the years.
Testimonials by satisfied customers
This is another important thing that you have to look out for a company, and that is the results that customers have gotten from their services. If you know someone who went through the same thing as yours, you can try asking that person if he or she can refer his or her debt management agency. Knowing that someone became successful in debt management because of the help of a company will tell you a lot about the services that the company has to offer.
Payment schemes and offers
There are some companies that do not disclose how much you really have to pay them. They make you think that you are saving money because they only ask a little but they charge you for every transaction. Do not fall for these types of debt settlement scams, upon the very first meeting clarify with the agency on the true amount that you need to pay. This will prevent you from spending more in the long run.
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