Tax Settlement Advice

To settle tax debt owed to the IRS, you have many solutions and options. The IRS has different settlement options to taxpayers who struggle with their back-taxes. For individual tax debt can be overwhelming burden. But under playing tax liability is not the answer as it can lead to hefty penalties. The IRS specifies some ways to settle back taxes for every type of financial situation that person face. These methods depend upon the unique financial situation. Here are some of the ways to settle tax debt.

Full settlement is the simplest way of setting your account with IRS. Once you pay, they go away. You can take refinancing of your home, borrowing from family or friends if you don’t have the means to pay. This can be done through by selling some of your valuable possessions. If you are unable to pay back taxes, IRS offers several options to pay all your liabilities. They are willing to accept less than the full amount of taxes to settle your tax account. If you need extra time for full payment of tax the IRS give you 45 days extension. This period can be extended to another 45 days. But you will receive notice from IRS with more penalties and interest if that 45 days extension is over. So be sure about the payment before using this option.

You can set a partial payment plan or installation agreement with IRS. If you do not meet the minimum monthly payment of installment agreement you may qualify for partial payment plan. This allows you to made smaller monthly payments. After every two years you may go under review to see if your payments can be increase to full amount. You can offer a compromise payment to IRS to pay an amount less than the original amount owed and call it even. But IRS needs to be convinced that they would not be able to collect more than what you are offering to them. Final option is to get declared currently uncollectible and let the statute of limitations expire. As this is declared, IRS will halt collection activities against you and they will review your situation every couple of year. If statute of limitation hits the 10 years from the date of assessment, you are no longer liable for tax.

The good deal is to pay the full amount you owe as quickly as possible to minimize the interest and penalties. The installment agreement or partial payment agreement has the same idea of making payment. Those who cannot resolve their tax debt, installment agreement can be a reasonable payment option.
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