If you are facing back taxes and looking for a way to have the payments reduced, there are strategies for negotiating with the IRS to do so. Debt negotiation in the form of a repayment plan is a very common way in which debtors with big amounts owed in back taxes can set up a way to pay those debts over time. In fact, it is not even difficult to negotiate a repayment plan, as the IRS is usually happy to have someone willing to pay back their debts from back taxes.
Debt Negotiation for Back Taxes
Negotiating an installment repayment plan is fairly straightforward: you must be completely up to date on all your tax returns, and you will need to have all your financial information at the ready, including all assets. You must be able to show that you do not have an alternate source of funding with which you could pay the back taxes (such as, for example, a credit card with a high enough balance to pay the debt). If you can show this, your debt negotiation will be successful, and you will be able to set up an installment plan. There is a nominal fee to set up the plan, in which you will choose which day of the month your payment is due, and then be responsible for the payment in a timely manner.
Make sure you are fully aware of how this debt negotiation is being handled on the IRS’s side. Many accounts of people still being charged interest and penalties while making installment payments are out there. In some cases the installments are not even covering the interest accruing, meaning the amount owed on your back taxes is increasing even while they are in repayment. Make sure you know what you are getting into before signing up.