The IRS can be a formidable creditor. Unpaid IRS Debt can lead to liens, levies and garnishments on your assets or your pay.
A taxpayer faced with IRS debt or tax problems has options that can resolve the problem or make it more manageable. If you are experiencing economic hardship due to an unpaid tax debt, you will need to know your alternatives for settling your tax debts, and you may need help in negotiating the best possible monthly payment.
A few examples of options that can help a troubled tax payer are:
Checking the legitimacy of the amount assessed.
Sometimes a tax liability may be the result of errors on tax returns, forms submitted to the IRS or errors made by the IRS. The first step in fixing a tax debt issue is to understand why the tax is being assessed and if the problem can be resolved by fixing errors.
Payment Plans, Installment Agreements and Partial Payment Installment Agreements
You can make monthly payments through an installment agreement if you’re not financially able to pay your tax debt immediately.
While all taxpayers are expected to immediately full pay delinquent tax liabilities. When this is not possible taxpayers may be allowed to pay their liabilities over a prescribed period of time. The IRS implemented an additional payment option, on January 17, 2005, known as the Partial Payment Installment Agreement (PPIA) for taxpayers who have outstanding federal tax liabilities.
This new payment option became possible with the passage of the American Jobs Creation Act of 2004, this legislation includes language amending Internal Revenue Code 6159 to allow the IRS to enter into installment agreements that result in full or partial payment of the tax liability.
Offer in Compromise
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship. The IRS will consider your unique set of facts and circumstances when making a determination on an offer in compromise.
The IRS generally approves an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time. The Offer in Compromise program is not for everyone but it could be an option for those who don’t have the assets or ability to pay their IRS debt.
IRS Debt cases are often complex and hard to negotiate. Successful resolution is more likely when the facts and circumstances are understood by a professional that has experience in handling tax debts. Contact us at (702) 570-1100 or toll free at (877) 889-3469.