Settling Your Tax Debt: A Guide to Negotiating With the IRS
When it comes to communicating with the Internal Revenue Service (IRS) to work out a way to pay your tax debt, it’s important to understand that in some cases, it’s not always an overnight process. The complication often lies in how much tax-debt you owe. If the amount isn’t much, chances are you can easily work out an affordable monthly payment plan. The key is communicating with the IRS to make this happen.
Talking to the IRS is Easy!
Many people are scared to call and work out a compromise with the IRS for fear that they’ll get penalized somehow. Talking to IRS representatives is nothing to be afraid of. They are there to assist you with the tools to pay off your tax debt.
What To Do if You Owe the IRS
Now, if the IRS has informed you that your tax debt at an amount that you feel will be impossible to pay off, then you need to take the necessary steps in making it possible. The IRS is not going to walk away just because you say that you cannot afford to pay. Tax debt is a responsibility that you’ll have to deal with head on.
While there’s nothing that can wipe away your tax debt, there are ways to reduce the amount you owe—in some rare cases, the amount can be reduced down to little or nothing at all. The one way to find out is through negotiation.
How to Negotiate with the IRS
Yes, it is possible to negotiate with the IRS about taxes you owe. Here is a short checklist on what you can do to make this happen.
Before you write a check for anything, be sure that you verify your own tax records to make sure that what the IRS is claiming you owe is correct. The best way to do this is to refer back to your annual filings. If you don’t have a record of your own filings, then contact the IRS to get a copy of those records first before discussing any other pressing issues.
- Apply for an Offer in Compromise
Once you’ve verified the amount of money you owe to the IRS, then the next step is to see what you can do about reducing that amount. Applying for an Offer in Compromise may be the solution to your problems. If your application is accepted, your total tax debt amount will be reduced based on the contingency that you will pay the total amount in full based on certain terms and conditions.
- Set Up an Installment Agreement
This may be one of the most popular solutions to settling your tax debt. It’s also quite simple. Just discuss with an IRS representative what kind of monthly payment you can afford to pay and that’s pretty much it!
Just One More Thing…
The catch to all of these solutions is to make the payments on time and there won’t be a problem. If you miss a payment, the agreement is automatically forfeited and you’ll be expected to pay the original amount in full.