Tax debt can arise for numerous reasons, many of which are simply out of the control of the taxpayer. There are those that ignore their tax liabilities or try and “work the system” to get around paying higher taxes, but many people ended up owing the IRS through no fault of their own. Whether it is due to discrepancies in calculated tax liabilities or a financial hardship that is preventing you from paying your tax debts, finding a solution to pay the IRS should be of utmost priority.
What Options Do I Have?
You may have heard that getting tax debts discharged in bankruptcy is difficult. For the most part this is true, but even if you could get a tax debt discharged through bankruptcy doesn’t mean it is your best option. What many people don’t know is that the IRS offers several ways to help you repay your tax debts.
1. Installment Plan — the IRS offers the opportunity to repay your tax debts over several payments, usually within a 2 to 3 year period. If you owe the IRS less than $25,000 you can request an installment plan to help space out your payments in an amount that you can afford to pay.
2. Offer In Compromise – if you cannot afford to repay your full tax debt, the IRS may agree to settle your tax debts for less than what is owed. To obtain this agreement you must be able to prove financial hardship and present an offer that is equal to or greater than the amount you can afford to pay.
3. Appeal Process — if you are disputing the accuracy of your tax liability, you can file an appeal. This process allows you time to have your tax records reviewed and your tax liability re-calculated. If the amount originally calculated was incorrect, your liability will be adjusted.