Tax debt is one of the most stressful types of debt for many Americans, second only to medical debt. While owing the IRS money can be serious business, it doesn’t have to be difficult to resolve. In fact, there are several ways to enter debt negotiations with the IRS and obtain a favorable outcome.
If you haven’t already, contact the IRS about your debt. Ignoring your unpaid taxes can only lead to unfavorable consequences that could cost you more money down the line. Make sure you stay in open communication with an IRS agent in writing or over the phone. The benefit to communicating your intention to resolve your tax debts in writing is a paper trail of evidence that you made good faith efforts towards taking care of your responsibility.
It is important that you are prepared when entering debt negotiations with the IRS. Know how much you can afford to pay without overextending your other financial accounts. The IRS offers a few different payment options based on your financial situation. You may need to provide documentation to demonstrate your financial hardship, such a proof of insufficient income or additional debt burdens.
Be sure to remain flexible in your negotiations. Remember that the IRS is not legally obligated to offer you repayment assistance, rather it is a courtesy. Always be polite in your negotiations. Offering to make repayment easier, by setting up an automatic draft of payment can even boost your chances at successful tax debt negotiation.