Dealing With Back Taxes The Right Way
If you owe the IRS back taxes, you may be wondering about your options for finally getting rid of them once and for all! The IRS actually offers more options for dealing with back taxes than you might expect. We have put together a list of some of the most viable options for settling your debt once and for all.
An installment agreement allows a taxpayer to pay repay a debt to the IRS over time instead of in one lump sum. You can think of this like you would a credit card payment, you pay a monthly payment toward your balance until you have paid off the debt.
The great news about installment agreements is that the IRS is very likely to grant one. They also show the IRS that you are trying to pay so they back off on the intensity of their communication, and it will, allow for more flexibility and time to pay.
The downside of an installment agreement is that, like credit cards, you are still responsible for interest and penalties that accrue on top of the amount of taxes that you owe.
Offer in Compromise
An offer in compromise settles your tax debt for less than you owe. This settlement method is fairly difficult to get the IRS to agree to, as you must prove that you are unable to pay the full amount.
The IRS has ultimate discretion about whether to grant these, but you must be able to prove that you are not in bankruptcy and you must be current on all previous tax returns.
The fee to submit an offer in compromise application is $186 and the application process is rather intense, so some individuals elect to hire professional tax help with this process to give them the best chance of having their application approved.
Amend Previous Tax Returns
Another way to deal with back taxes is to look at your previous returns and determine whether you may have overstated the amount you owe.
If you find that you did not utilize credits available to you or did not deduct items that would have been in your favor, then it may be wise to amend your previous tax return so that your debt to the IRS is less.
This process does take some specific knowledge of tax law, so it may be wise to enlist the help of a tax expert.
There are other options for dealing with back taxes including bankruptcy, penalty abatement and currently not collectable. Many of these options are complex and may require some support or assistance to determine whether these options are viable in your specific case.
Success Tax Relief Can Help You Develop A Strategy For Settling Back Taxes
Tax debt can be scary and frustrating, but they’re no cause for despair. The best course of action is to be very proactive and decide what option best meets your needs and pursue it, before the IRS starts pursuing you.
Success Tax Relief has extensive experience helping clients all over the country find ways to manage their back taxes. Give our team a call at 877-825-1179 and let us start working for you.