When it comes to debt, there’s nothing worse than tax debt. The high interest rate and incredible number of fees the IRS attaches to unpaid back taxes causes what started out as a moderate debt to quickly snowball into an unmanageable financial solution. The worst part is, the longer you ignore the situation, the more the amount you owe increases.
Don’t think you’re in a hopeless situation. You’re not. With the assistance of a good tax settlement attorney and some of the programs the IRS has created, you can make things right with the IRS. When you meet with your tax settlement attorney, you’ll learn there are several different IRS settlement programs that could provide you with the tax debt relief you seek.
Despite what the debt collectors often try to make you believe, you might not have to pay the entire amount you owe the IRS in a single lump sum. The IRS would far prefer to get regular payments than to never collect the money you owe. You, your tax attorney, and the IRS can work together to determine a reasonable monthly payment program that allows you to pay your back taxes and also have enough left over for your monthly bills. Owing less than $50,000 in back taxes increases the odds of the IRS agreeing to an installment plan.
Offer in Compromise
One of the matters you should discuss with your tax settlement attorney is whether you should apply for an Offer in Compromise. Although it’s difficult to get approved for this type of tax settlement, approximately 1% of the applications being approved, if yours is accepted, it will feel like the weight of the world has been lifted from your shoulders. The way the Offer in Compromise program is set up, the IRS allows approved tax payers to settle their outstanding tax bill at a fraction of what they owe.
The amount that you ultimately end up paying could be as much as 20% less than what you currently owe. Best of all, you won’t have to declare bankruptcy.
It’s not easy, but if you can convince the IRS that there’s a legit reason for your failure to pay your back taxes on time, you may be able to qualify for a penalty abatement. In the past, reasons the IRS has accepted include:
- Natural disasters
- Family Death
- Medical crisis
While the penalty abatement won’t make the initial amount you owe disappear, you will be excused from having to pay the interest and penalty fees, provided you pay the amount you would have owed within a certain time period.
If you need a tax settlement in order to resolve the matter of our outstanding back taxes once and for all, the best thing you can do is to contact an experienced tax settlement attorney and discuss the matter with them. The attorney will look at the unique nature of your case and suggest the best course of action.
If you’re one of the estimated 3.8 million Americans the IRS is currently investigating for back taxes, you need to contact the best tax settlement attorney today!