If you want to settle IRS debt, you’ll be delighted to know that there are a number of debt options and solutions for you. The Internal Revenue Service has ensured that there is a method to settle IRS tax debt for every kind of financial circumstance that you are experiencing. Your distinct financial situation will establish what type of settlement will best serve your purpose.
This article will present you some ways to fix your tax debt depending on your financial standing. Note that ‘good financial standing’ delineates that you have sufficient amount of money to pay back the taxes you owe and still have adequate amount of money to pay for your household expenditures after your tax bill is fully settled. On the other hand, ‘bad financial standing’ connotes that you can’t make any payments on your owed tax because you might be left with less than sufficient amount of money to sustain your minimum standard of living.
Tax Debt Solutions
- Recompense your tax debt in full. No doubt, this is the easiest method to straighten out your tax situation with the Internal Revenue Service. After paying, all your debts will be gone. If you don’t have the money to pay, you might want to borrow from relatives or friends, refinance your home, or sell some of the assets that you don’t need anymore.
- Request for a payment extension to settle IRS debt. If you necessitate additional time to get the money all together to pay the entire amount, you can always ask for a 45 day extension by requesting for it. It is the longest period of time that you can request for, though you can ask for another 45 day extension when the previous is up and you have been given another notice from the IRS imposing more interest and penalties.
- Establish an installment agreement with the Internal Revenue Service. With this payment structure, you will be permitted to reimburse your tax debt over time in more convenient monthly payments. To be approved for an installment agreement to settle tax debt, you will have to completely fill out the form 9465 of the IRS or visit the IRS website and fill out the payment agreement application (OPA) online.
- Setup an installment agreement with partial payments. If you are not eligible to perform minimum monthly payments, you may be eligible for the partial payment plan, which permits smaller and more expedient monthly payments. You may review your payments every two years, wherein you have the option to increase your payments to the full amount stated in the installment agreement.
- Apply for an offer in compromise. This is a debt settlement option where you make an offer to the Internal Revenue Service to shell out an amount lower than the original owed money and get it even. You can also declare your status as uncollectible so the IRS will study your difficulty until your financial situation shows that you can make the payments toward your taxes, thus you can settle IRS debt accordingly.