Eliminating IRS Tax Debt is no simple process. The longer you ignore your debt, the bigger the monster that this tax debt will become. There’s more than one way to slay this beast. The first option is the most obvious one. You can pay your IRS tax debt in full. But if that is not a possibility the other options are harder to achieve. You can pay your debt in monthly payments or settle your tax debt for less.
Installment Agreement, Paying Monthly
Just like paying your monthly creditor’s debt, you can also pay the IRS with affordable monthly payments. This is called an “Installment Agreement.” The IRS will look carefully at your entire financial situation. Then they will determine the amount you can pay monthly based on your calculated income and assets.
Offer in Compromise, Settle your Tax Debt
A better option is settling your IRS tax debt for a lesser amount. This is called an “Offer in Compromise.” This plan is not available to everybody. You have to display true financial need in order to settle your IRS Tax Debt. In addition to that, you have to submit plenty of documentation to the IRS in order to prove your case. But if you know you cannot pay the full amount on your Tax Debt in the near future, this is a great option to consider.
“Uncollectible Status,” A Temporary Solution
Although having your account placed in “Currently Not Collectible” status is usually a temporary reprieve from the IRS’s collection process, it can still save you valuable time. If you have an extreme financial situation and cannot work, the IRS knows they cannot collect from you. If you can prove your situation is dire, you can have your account placed in “Currently not Collectible” status. The IRS will not resume collecting from you until you can pay again. But you have to keep in mind, they will be checking on the status of your situation periodically. Once it’s proven that you can pay your IRS Tax Debt in full, you will be expected to do so.
Point to Ponder
When it comes to negotiating directly with the IRS, you need to be wary. IRS Revenue Officers are trained to teach you about only one option, and that’s paying your entire Tax Debt in full. Know your options for Eliminating your Tax Debt and find the solution that works best for you. Don’t let the IRS dictate your future.