4 Ways to Settle Tax Debts for Less Than You Owe
If there was a way to reduce the amount of money owed, isn’t it worth investigating? Being in debt to the Internal Revenue Service (IRS) can become a stressful situation, especially if one doesn’t have the resources to pay down that debt.
Believe it or not, there are ways to reduce the amount of money owed to the IRS. This doesn’t mean that these ‘ways’ apply to every taxpayer. These are simply options to determine whether or not one qualifies for such privileges. In order to find out if one can reduce or even get exonerated from his or her tax responsibilities, the first thing a taxpayer should do is call the IRS to confirm the total balanced owed.
1. Call the IRS to Confirm
When it comes to the IRS, never assume. It is easy for some taxpayers to simply look at their annual tax filing to determine the amount owed. This is not always going to be accurate. Depending on whether one is delinquent in paying his or her taxes, if there are any back-taxes owed, etc., there could very well be some tax penalties and late fees added to the original balance.
On rare occasions, there could possibly be a reduction to the balance. That is why it is important to call the IRS to confirm exactly what is on the account before writing a check. Calling the IRS and obtaining a mutual understanding regarding the taxpayer’s account balance can help the IRS representative map out a definitive installment agreement.
2. Installment Agreement
Installment agreements are usually the first step to resolving any tax issues. Typically when a taxpayer is informed that he or she owes the IRS, it’s usually an amount that cannot always be paid in full. In situations like this, an IRS representative will arrange an installment agreement. Based on the taxpayer’s annual income, living expenses and amount owed, the IRS along with the debtor’s approval, will issue a monthly payment for he or she to make until the balance if paid in full.
If for any reason, the taxpayer is late or misses a payment, the IRS reserves the right to nullify the installment agreement, rendering the full payment due immediately.
3. File for a Offer in Compromise
It can be said that every taxpayer wants to qualify for this one. An Offer in Compromise reduces the amount of debt that a taxpayer owes. This is allowed under the situation that by paying this debt, it creates financial hardship or other unfortunate circumstances that might not allow a taxpayer to legally earn the resources to pay off the debt.
3. Innocent Spouse Relief
There are instances where a spouse is not legally responsible for his or her partner’s tax obligations. Under this option, the spouse can be relieved of tax, interest and penalties on a joint tax return. In addition to the Innocent Spouse Relief, there are two other types of spousal relief available:
- Equitable relief
- Separation of liability relief
Hire a Tax Relief Consultant
Another way to settle tax debts for less than actually owed is to hire a dependable and reliable tax relief consultant. Success Tax Relief is a tax consultant firm that specializes in communicating with the IRS on our client’s behalf. Having over 30 years of experience resolving tax matters, we are confident that we can do this for you! If you are interested in learning more about our services, visit our website here. Call us at 1-877-825-1179 or ask us any question online today.