IRS debt reduction strategies may help you to be financially stable again. Statistics show that most citizens in the US comply with the tax authorities on a voluntary basis. They can file their tax returns and pay the amount due in order to keep the country strong and stable.
However, some US citizens do fail to comply with the tax authorities. The most common reason to abide by the tax rules set forth by the IRS is the lack of information. In most cases the IRS will take steps to help the taxpayer comply with all the relevant rules in order to avoid penalties.
There are times though that you may owe the IRS an amount of money that you can no longer pay. Your tax returns might have been incorrect for several years which means that you have paid less tax than what was due. If that is the case, the amount can be substantial, especially when penalties and interests are added into these obligations. However, there are several IRS debt relief options that may be able to help you:
1) IRS Tax Relief Settlement: This scheme allows you to settle your debts for a percentage of the amount owed, depending upon your age, assets and personal budget. Simply put, it’s based on your capacity to pay.
2) Offer In Compromise: This scheme allows you a onetime chance to clear your debt to the IRS for a fraction of the actual amount due. The IRS will look at your case and may agree to settle your debt for a certain amount depending on certain guidelines. But, there are certain obstacles that must be overcome before your tax debt is reduced. The IRS then makes an offer to you. A reduced amount that they think you can pay based on your financial situation.
3) Payment Plan: There are cases when the IRS gives you time to pay your tax debt when the IRS is convinced that you cannot pay your obligation in one payment. Your account can be flagged “not currently collectible” if you are unable to pay your tax liability. Until you are in a position to accept a payment plan or an Offer in Compromise is made, the IRS will continue to bother you.
4) Penalty Abatement: If you cannot pay your outstanding tax debt due to certain circumstances that are out of your control, it is possible to challenge the interest and penalties that have been added to your account. However, it is advisable for you to appoint an experienced tax advisor due to the intricacy of this scheme. Applications for penalty abatement have to be very specific and comply with all the IRS rules and regulations.
IRS debt reduction strategies enable you to reduce your debt with the IRS using the most appropriate of these four (4) schemes. Get the needed assistance from experts if self-help is inadequate.