The crushing economic downturn we currently find ourselves in has caused hardship for millions of Americans. For those people looking for IRS debt relief because of a large tax bill that they cannot afford to pay, the rough waters are even more choppy.
The good news is that the IRS has announced that because of the current economic situation, they are being much more flexible in dealing with delinquent tax debts. There are several options for persons who are looking for IRS debt relief. The one that is the most appropriate depends on a persons individual financial situation. Here are 3 common techniques that many people have had success with:
Offer in Compromise - Everyone has heard of settling with the IRS for "pennies on the dollar". These commercials are all over the television now. Even though these commercials make it seem easy, not everyone qualifies as the IRS has fairly strict guidelines they follow. Generally the IRS decides whether or not they could collect the full amount from you over a five year period. If they feel that they cannot, then you might qualify. The many rules are tricky so it is best to have a professional prepare and submit the offer for you.
IRS Installment Agreement- An IRS payment plan is the easiest to get approved. There are several types of these monthly payment arrangements that are available and to choose from. You will be charged interest and penalties on the balance owing and the full amount will have to be paid off, but the IRS will take no further collection action while you are on the agreement.
Partial Payment Installment Agreement- With this option you will pay less than the full amount owing and under the right circumstances may result in a better outcome than an Offer in Compromise. You will need to have a tax professional compute if this would be the best course of action for you.
For persons seeking IRS debt relief, dealing with the IRS can be tricky. Even in the current economy they will still try to squeeze as much out of you as they can, which is why in the long run, it really pays to have a tax professional handle IRS negotiations for you. If you owe back taxes that you cannot pay, you should really seek professional help and deal with the situation. If there was ever a time to try, it is now.
