Debt settlement with the IRS can be done proficiently by knowing all the settlement options available. When you qualify for an IRS installment agreement, you are given the opportunity to save considerable amount of money since you are able to negotiate the lowest viable monthly payments.
The Internal Revenue Service continuously implements its unprecedented solutions for recession-burdened and financially challenged Americans to learn the opportunities on how to settle tax debt.
Resolving Tax Debts
Struggling taxpayers may be allowed for tax breaks since the IRS executes collection and enforcement efforts to assist Americans in their financial difficulties. Due to the astonishing challenges of the present economy, the IRS is guaranteeing that it will be more forgiving to its citizens who have defaulted and fallen behind their tax payments caused by unusual financial problems.
One way to fix your back taxes is to negotiate and ask for an installment agreement with your state that will allow you to pay back the liabilities over a particular period of time.
If you still can’t meet the expense of monthly payments and you are not eligible for another form of tax relief, like an offer in compromise, you can look at other options available. You can opt to have your account be tagged with uncollectible status, thus you’ll not be obliged to forward payments and the IRS will not continue the collection process until they have proven that you are once again financially stable and can pay for your owed taxes.
The IRS installment agreement is a type of debt settlement program where the government lets you to disburse the liabilities over time. When a payment plan is created to settle tax debt, the IRS will not carry out enforced collection, to include the levy of wages or bank account, provided that you will stay current with your payment and filing obligations. However, you should note that this setup will allow the penalties and interest to continue to accumulate until your outstanding balance is met. Furthermore, a tax lien may be filed as a segment of the terms of the payment agreement, based on the amount of your total liability.
Negotiating the Installment Agreement
The IRS highly recommends for taxpayers like you to pay the tax amount you owe as quickly and as much as possible. For businesses or individuals who fail to resolve their tax debt promptly, the installment agreement is no wonder a very reasonable payment alternative. These agreements authorize the full payment of the debt in smaller and more convenient amounts.
In most instances, to settle IRA debt, the IRS accepts some form of payment agreement for past due taxes. To be able to take advantage of the payment plan with the IRS, the following criteria should be met:
- You should have filed all annual returns.
- You should disclose all your investments and assets owned, including your bank accounts and cash in hand.
- You should not have enough cash accessible through savings, checking, money market, or even brokerage account to recompense the IRS.
- You should not have the capability to borrow funds owed to the IRS from other providers or sources.
- Your retirement account should have sufficient equity.
For further assistance in debt settlement, you can get some help and advice from tax settlement services in your area.