You might be wondering why the Internal Revenue Service is willing to compromise and help you settle tax debt. In reality, the IRS debt settlement process saves the IRS both time and resources by not needing to go after an individual who keeps on running away from the debt and ensuring that the bureau still receives a significant portion of the owed money or some sort of payment.
Ironically, the IRS is indisposed to inform people on the process of how to settle tax debt. This is mainly because they don’t want every debtor to become aware that a compromise is always possible, allowing them to only recompense a fraction of the total outstanding owed amount. In some instances, one may even be permitted to eradicate the total tax debt.
Settling Debts – Top Tips
When planning to settle your debts, the greatest option is to contact a tax specialist. While there are several options that you can go for, in reality, choosing the option that is most suitable for your circumstance, is never an easy job. The tax expert has broad knowledge and experience managing different types of settlements of tax accounts. Thus, he can administer the negotiations integrated in such instances efficiently.
When you settle your tax debt, you should not be under the impression that only wealthy people get into quandaries with the Internal Revenue Service. The IRS does not take your popularity and financial status into consideration, but in some instances, they may use famous or known individuals to set an example for all the rest of taxpayers. After all, IRS still means business.
Ways to Settle Debts
To settle IRA debt, you can ask for an audit reconsideration of a closed audit. In this case, you may reopen an audit which produced a huge tax debt that you have no means to pay because of some unavoidable circumstances at the time when the audit happened.
The option known as offer-in-compromise will help you fix the tax debts in significantly lesser amount than the real amount that you owe. This is where the balance is forgiven. Keep in mind though that this option is not as plain and easy as it appears, and dealing with offer-in-compromise with the assistance of a tax attorney is essential to ensure the success of this transaction.
Together with these options, there are some direct opportunities as well; when your tax debt is more than ten years, then you will most likely be freed from your debt. You just have to notify the IRS and perhaps, for apparent reasons, your debt will be eliminated since it will try to obliterate its failure to make you pay the debt.
You can also file bankruptcy to resolve tax debt. However, the debt should be more than three years to be considered and filed as bankruptcy. The rule known as injured spouse regulation or innocent can save you from your tax debt if you are not responsible for its creation.
With numerous options to settle tax debt, going for the best available option is the only way to get rid of sleepless nights thinking about your debt, while having a tax professional on your side is always the safest bet.