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If you are one of the many Americans struggling with back taxes there is potential relief available. You don't have to feel overwhelmed and stressed out due to IRS debt. The government does want to work with you and they have numerous options available to help.
One of the biggest changes the government has made is the ability to discharge back taxes when you file bankruptcy. There are very specific criteria that you must meet to qualify, but if you do you could save literally thousands upon thousands of dollars in back taxes. This applies to both chapters 7 and chapter 13 bankruptcies. Some of the criteria required include:
1. Tax Debt Due Date must be at least three years old
2. The return that caused the debt must have been filed at least two years ago
3. Return must not be fraudulent
4. Taxpayer must not be guilty of tax evasion
The dates specified are all based upon the date the bankruptcy is filed.
There are other criteria as well. You should consult with your bankruptcy attorney for complete details. Make sure your attorney is versed in the new tax debt laws.
If bankruptcy is not in your plans, you do have other options! One is the Installment Agreement. This is basically an agreement between you and the IRS allowing you to make payments monthly based upon your income. You will need to prove your income and financial status to the IRS in order to obtain this agreement.
Yet another option is the Offer in Compromise (OIC). This is a bit more involved and complex so you should enlist the assistance of a tax professional to assist you. Basically this allows you to ask for a compromise from the IRS, a lower balance based upon your financial hardship.
You have options and you should investigate them thoroughly! Interest and penalties are added to the balance of your debt until it is paid in full. This means that your initial tax debt could double or even triple if you don't take action quickly! You do not want to procrastinate when it comes to the IRS!
Contact a tax professional today and find out which option would work best for your current situation. I have only listed a few of the options available; there are others that may be more suited to your specific situation. The key is to act now and take the steps needed to get control over your debt before it controls you!
