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Your Top Methods to Settle Back Taxes OwedIf you owe back taxes and it comes to solving back
taxes owed you have many options. It is best that you learn all
available options and see what fits your unique tax situation the
best before taking action. Some important things to consider before
making your decision of what debt settlement method to use are your
tax amount owed, the greatest amount you can afford to pay, the
amount of liquid assets you have, and if you would be able to pay
amount in full if you just had more time. Below are the 5 most
common methods to solving tax debts. This way allows you to compromise the tax amount owed for much less than the original amount owed. If you have ever heard the saying, "Settle for Pennies on the Dollar", this is the method that is used. It shouldn't come to a surprise that this is most difficult way to settle with the IRS. The IRS has strict requirements to qualify for an offer for compromise. The purpose of an offer in compromise is to find a compromised amount that works for the tax payer and the IRS. This means the IRS will only settle for less if you can prove it will cost them more to try to get the money from you. This is a good choice if your total assets is less than the amount of tax debt you owe. Installment Agreement This is the easiest way to settle tax debts. With an
installment agreement you will be required to pay monthly payments
towards the tax amount owed in a period of less than 3 years. With
this agreement you will end up paying more than the original amount
owed. This method should be used if you cannot pay off in full but
you can afford to pay off over time. If you need to buy more time to pay the total amount
due it can easily by done by using your understanding of the IRS
system to your advantage. When taxes are unpaid it begins the IRS
automated notice system. The IRS send a series of automated letters
before it begins collections. Typically the IRS sends an original
assessment letter stating the amount of tax owed plus any interest
and penalties then it will send a series of four CP Letters
(Computer notices noted by a CP number in upper right). Typically
once you start receiving these letters you have 4 to 6 months before
the IRS takes collection action if nothing is done on your part. To
delay the IRS and buy yourself more time all you have to do is send
a letter back to the IRS in response to the assessment notice or CP
notices and state that you can't pay the amount in full at the
current time and ask for a 45 day extension. Once the 45 days is up
and you haven't done anything , it will just start up collection
system where it left off and you will receive another letter and you
can repeat the same process. You must pay off the taxes owed before
the IRS takes action against you. This way won't resolve your tax debts, but it
temporarily stop collections. When you receive this status, the IRS
will pause collections until you can pay. Wile being uncollectible
it is possible to have the statute of limitations expire and you
will no longer be responsible for those tax debts owed. Tax specialists are many times the the easiest way
to get help with back taxes. Tax specialists have the best outcomes
for getting offer in compromises settled and for the least amount of
money. Tax specialists can be the best bet for getting the best
installment agreement setup with the IRS as well. Most tax
professionals will offer a free consultation to give you your
options, likely outcomes, and cost. It is best to talk to multiple
tax professionals to find the one that you feel gives the best
suggestions, you get along with best, and gives you a reasonable
price. BackTaxesHelp.com is a website with all the information needed to settle back taxes with the IRS. |
