Understanding Tax Debt Relief and What You Can Do

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If you currently owe money to the IRS, you have a number of things to think about.  The first thing is that you have to consider the IRS as a lender, which means they want their money as soon as possible.  However, this also means that they are happy to listen to any “Offer in Compromise”. You also have to make sure that you have proper representation if you are looking for tax debt relief.  You have to make sure they have plenty of experience and that they have a good reputation in dealing with these matters. Finally, pay what you can, even if it is a dollar a month.  If you ignore it, the IRS will be more inclined to be tougher with you as well.  For instance, they may just stop you from getting any future tax refunds, instead putting that towards what you still owe.   Offer in Compromise taxAn Offer in Compromise happens when you come to an agreement with the IRS so that you pay less than what you actually owe.  More often than not, this is done through a lump sum payment and/or instalments.  This is a really good way to settle a debt you owe, so it is certainly worth looking into. Not everybody will be accepted for such an offer, however.  The IRS will first have to determine that you are unable to pay the debt in any other way.  Additionally, if you have good reason to show you do not believe you owe the debt in the first place, they may accept the offer until an agreement is made on what the bill should actually be.  Finally, if you can demonstrate that paying this bill would cause true hardship on your family, they may accept a lower payment. Setting up IRS Payment Plans As soon as you receive a letter from the IRS, you must make sure you contact them straight away.  They are very much willing to work with you, and will generally also accept any form of instalment agreement, even if they don’t allow an office in compromise (as this means paying back less).  Payment plans can be set up to allow you to pay your debt over a period of up to five years, although this does depend on how much you own and what kind of tax debt you have.  Any IRS notice will include details on how to contact them, and you need to use this to create an agreement as soon as possible So What Does This Mean? The bottom line is that if you owe the IRS money, you will have to pay it back somehow.  However, the reality is also that the IRS isn’t some sort of evil character that will hunt you down, leaving you broke and without a home.  They simply want the money that is due to you, and if you are able to give them that through means other than a lump sum payment to settle the entire bill, they are very likely to accept this.  However, the longer you wait, the less likely they will be to accept this.

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