If you are dealing with several debts, then you should look for a solution that will help you overcome that problem. The IRS may be demanding an upfront payment or something that is higher than what you can afford to pay. You can negotiate with the tax body to forgive your existing debt. Debt forgiveness is something that is applied to borrowers where the IRS decides to waive part or the whole debt that you owe to the tax body. When this happens, you will be able to pay a fraction of what is owed by setting up a plan that will allow you to pay considerably low monthly installments if you qualify for the credit options in the market. If you cannot afford to pay back your taxes, you should look for a lender or companies that will help you negotiate with the tax body to guide you through the process. If you are dealing with the IRS, you are not alone. Many people are facing challenges in clearing their debts.
Owing money to the IRS is intimidating to many people. The IRS has the ability to garnish your wages, place the lien on your property or seize your assets to obtain the money that you owe them. However, you should look for a way to communicate any challenges you may have in repaying the loan to avoid such actions being taken against you. The IRS is always willing to work with taxpayers who are looking for solutions to their financial woes. In essence, IRS is mandated by the federal government to deal with any tax issues in the country. In addition to having many methods of collecting outstanding taxes, the IRS can be impatient. The more you wait to repay your debt, the more you will be required to repay the debt. Here are some of the techniques that you can use to settle your IRS debt.
Before you look for debt forgiveness, it is imperative that you talk to the tax body on ways to reduce your credit. A common method is by asking for an installment agreement. If you think you are a victim of a Ponzi scheme or fraudulent investment scheme where you have lost all your money, you may be eligible to utilize the tax code low where you can recoup up to 30-40% of your losses. Although this is quite complex, you can use the law to reduce the total amount of debt that you owe the IRS.
Using partial payment installment agreement
This is a new debt management plan where the borrower has a long-term plan to pay off the IRS at a reduced dollar amount. This is quite similar to credit card payment. The IRS will allow you to pay off your unpaid taxes in installments instead of clearing all the debt at once. In situations where you feel that this is complex, you can seek attorney service to help you negotiate for the lowest possible monthly installment.
Offer in compromise
This is a program where you can settle debts with the IRS for a lower value than what you exactly owe. It requires you to make a lump sum amount to pay the IRS or short-term payment at a reduced amount. If you are in debt with more than what you can pay, then this could be the ultimate plan for you. Offer in compromise is a technique where you pay a small amount as a full final payment. You should check if you are eligible for an offer in compromise.
Not currently collectible
This is a type of forgiveness that is partial and the IRS agrees to avoid collecting tax for one year or longer depending on the situation. Not currently collectible means that the IRS has declared the taxpayer should not be charged for the said duration. This is usually done after the IRS has received evidence that the taxpayer does not have the ability to repay the taxes. This is an effective tool because as a taxpayer, you can appeal for the IRS to stop lien, levy, lien or terminate installment agreement. The collection appeal is effective in giving you a chance to explain how the situation could be solved.
Reduced your debt with credit card debt settlement
There are two techniques of consolidating your credit card loans. This is through credit card settlement or you can choose to repay it on your own. If you continue receiving collection calls or negative remarks on your payment or credit report, it is better if you take out a settlement plan. You can get the better result by showing it to your lender that you will repay the loan and let them declare that you have repaid the loan in full. Once this is signed, the IRS will reduce your tax obligations.
Income tax may not be eligible for chapter 13 and chapter 7 bankruptcy code. However, filing bankruptcy is another way of reducing taxes. You should consider bankruptcy if you meet all the requirements. Chapter 7 will give you full discharge on allowable debts while chapter 13 provides a repayment plan for the taxpayer to repay some debts while others are discharged.
Stop internal revenue service from levying your bank account
The IRS can issue a bank levy on your local bank and take your cash from your account to recover their taxes. When the tax body levies your account, the bank is required to clear the amount available in your bank and remit it to the IRS. A solution to this problem is by obtaining a release from the levy from the IRS. When you do this, they will exempt you from bank levies.
Innocent spouse relief
If you are in debt crisis because of your spouse, then you can request for spousal relief. This happens when you inherit tax problems from your spouse. If you can prove beyond reasonable count that you qualify for the innocent spouse tax relief, then your debt can be forgiven by the IRS.
Focus on the expiration of the statute of limitations
The internal revenue service has 10 years from the date of assessment, which is usually closer to the filing date to collect all penalties, taxes from the taxpayer. An attorney or lender can help you overcome the problem by strategizing with you on the right method and techniques to avoid further complications.
Understanding the IRS and its working mechanism is crucial in helping you make a sound financial decision. You can stop the IRS from seizure, lien or levies on your account by looking for IRS debt forgiveness. This gives you a chance to explain yourself to the taxman on when you can repay all your debt. Moreover, you should come up with a solid financial plan to deal with your long-term financial problems.