IRS Tax Debt
IRS Tax Debt: Not to Be Ignored
There are plenty of ways to get in over your head with debt, such as credit card debt, but one of the scariest is tax debt. Anyone who has ever received that certain letter from the Internal Revenue Service, called a Notice of Tax Due and Demand for Payment, knows the feeling of panic that comes over you when you start reading about the interest and penalties that you now owe on top of the original tax debt - which you couldn’t afford to pay in the first place!
The IRS Can Reclaim Your Tax Debt Through Various Means
The IRS has the power to reclaim the money you owe in a variety of unpleasant ways if you choose to ignore your tax debt, so you'll need to find a way to add the IRS debt to your bill and credit card debt consolidation program. If you don't, the IRS can:
• Freeze your bank accounts, preventing you from withdrawing any money
• Seize property, including cars and homes
• Garnish your wages by forcing your employer to pay the IRS instead of you
Get the idea? The IRS is serious about reclaiming your tax debt. So here’s a big hint - cooperate with the IRS as much as possible to pay them what you owe.
Adding Tax Debt to Your Debt Consolidation or Management Plan
There are many ways to structure your payments to the IRS as part of your overall debt consolidation or debt management strategy. Consider a bank loan, as the interest rate may be lower than the combined interest and penalties the IRS will charge you on a tax debt payment plan. If your financial situation makes it impossible to get a private loan, you will probably need to set up a payment plan with the government. The good news is that they will make every effort to set up a tax debt remittance plan that fits your budget and doesn’t force you to go further into debt. Ask a tax debt expert, such as Lexington Law Firm, to help you sort through the maze of regulations.
Resolving IRS Tax Debt Must Be Your TOP Debt Management Priority
Even if you’re too strapped to attempt a tax debt payment plan, you have to put the IRS at the very top of your debt management plan. You might be able to obtain a temporary delay if you can prove significant financial hardship because of major illness, losing your job, or some other catastrophe that has drained your assets. Again, this is a temporary delay and at some point you will have to resume making payments on your tax debt.
Tax Debt Management's Last Resort: Offers in Compromise
If you can't find a way to squeeze your IRS bill into your debt management program, a final option is the Offer in Compromise, in which the IRS agrees to lower the amount you owe if you agree to pay that lowered amount in full immediately. To obtain this, you must prove to the IRS that your debt situation is so severe that they basically have no chance of collecting the full amount from you. You will have to document all your assets and debts, including whatever equity you have in your house, and prove that you’re "upside down" - in other words, that you owe more than you’re worth and that your income doesn’t allow anything extra for back tax payments. This is difficult to obtain and you will need a tax lawyer or accountant to assist you in preparing your case.
Act Fast When Dealing with the IRS
The main thing to remember is that it is never a good idea to put off dealing with the IRS once they’ve notified you that you owe back taxes - you can and must deal with the IRS successfully during debt management, debt consolidation or credit counseling. Your best bet is to contact the Daftar FunPoker immediately, let them know you can’t pay in full at this time, but that you do intend to take care of your IRS tax debt. A good way to show good faith is to send in as large a tax debt payment as you can afford ASAP.
Work With the IRS to Resolve Your Tax Debt
Once you’ve made that IRS tax debt payment, explain your situation, whether it's bankruptcy, debt consolidation or credit counseling and ask about your options as far as payment plans go. Keep in mind it’s in your best interest to pay as much as you can as early as you can, so you don’t rack up enormous interest and penalty charges. The IRS will probably ask for some documentation of your financial situation in order to ascertain how much you can afford to pay on a monthly basis, but this is nowhere near as complicated as what you would have to produce to pursue an Offer In Compromise.
Getting Professional Help with Your Tax Debt Problems
Many people are uncomfortable at the thought of trying to negotiate with the IRS. The paperwork can be complicated and, if you don’t follow their procedures correctly, the IRS tax debt relief process can drag on for months, increasing your penalties and interest.
Depending on how large and complicated your case is, you should consider using a tax debt accounting or law firm. Reputable tax debt firms who specialize in tax debt will represent you to the IRS, help you with your paperwork and negotiate the best settlement of your tax bill for your situation. Their familiarity with the IRS system will free you from worrying about making mistakes in dealing with them yourself and help you avoid chasing down options that aren’t realistic for you. Working with a company who can move the tax debt settlement process along quickly and resolve things efficiently is definitely in your best interest. While they’ll charge a fee for their services, it will probably be minor compared to what you will save in interest, penalties and anxiety over owing the IRS.
