9 Ways to Settle Your IRS Tax Debt
Are you caught in tax debt? We can help. Below are our top 9 ways to settle your IRS tax debt.
1. Installment Agreement:
A monthly payment plan for paying off the IRS. If you think you are a victim of a fraudulent investment scheme (“Ponzi” Scheme), where you have lost all or most of your investment, you may be eligible to take advantage the United States Tax Code (law) to recoup 30% to 40% of your losses. This highly technical and complex process can help you reduce taxes paid in previous years resulting in refund with interest.
2. Partial payment installment agreement:
A fairly new debt management program where you have a long term payment plan to pay off the IRS at a reduced dollar amount.Much like a monthly credit card payment, IRS payment plans allow you to pay off your unpaid back taxes in installments instead of all at once. A well-qualified tax debt attorney or Certified Tax Resolution Specialist will negotiate the lowest possible monthly payment for your needs.
3. Offer in Compromise:
A program where you can settle your tax debts for less than what you owe. Requires making a lump sum or short term payment plan to pay off the IRS at a reduced dollar amount.If you owe the IRS more than you can afford to pay, this could be the plan for you. Essentially, an Offer in Compromise gives you the opportunity to pay a small amount as a full and final payment. If you qualify for the Offer in Compromise program, you can save thousands of dollars in taxes, penalties and interest.
4. Not currently collectible:
A program where the IRS voluntarily agrees not to collect on the tax debt for a year or so. Currently Not Collectible means that a taxpayer has no ability to pay his or her tax debts. The IRS can declare a taxpayer “currently not collectible,” after the IRS receives evidence that a taxpayer has no ability to pay. This is a useful tool because you can file for a collection appeal to stop an IRS levy, lien, seizure or the denial or termination of an installment agreement. The collection appeal gives you the opportunity to explain how you think the situation could be solved without the IRS levy or seizure.
5. Lower Your Debt With Credit Card Debt Settlement:
There are two methods of credit card debt consolidation: through a credit card debt settlement company or on your own. Credit card debt settlement companies should be avoided. They collect your payments for months before making a settlement offer – if they make an offer at all. Meanwhile, you continue receiving collection calls and negative payment marks on your credit report. You’ll get better and faster results settling debts on your own.Final credit card debt settlement agreements should be in writing. Either draft an agreement of your own or have your credit card company send you an agreement. Make sure you and someone from your credit card company have both signed the agreement before you send payment.
7. Release Wage Garnishments.
When you owe Uncle Sam money, the IRS can levy your wages, salary, or federal payments until the levy is released, your tax debt has been fully paid off, or the time expires for legally collecting the tax. There’s room here to bargain for a release or modification to the garnishment if you don’t have enough money to survive with the levy.
8. Stop the IRS from Levying Your Bank Account.
The IRS can issue a bank levy to take your cash in savings and checking accounts to collect back taxes. When the IRS levies a bank account, the bank is required to remove whatever amount is available in your account that day (up to the amount of the IRS levy ) and send it to the IRS in 21 days unless notified otherwise by the IRS. Part of the process of resolving your IRS debt is obtain a release of the levy from the IRS.
8. Innocent Spouse Relief.
If you happen to inherit your spouse’s IRS tax problems, you have an escape route. If you can prove that your circumstances fit within the IRS guidelines for innocent spouse tax relief, you may not be subject to the taxes caused by your spouse or ex-spouse.
9. Pay Attention to the Expiration of the Statue of Limitations.
The IRS has 10 years from the date of assessment (usually close to the filing date) to collect all taxes, penalties and interest from you. An expert tax attorney, tax CPA or tax resolution specialist can help resolve your back taxes and IRS problems by just by advising and strategizing with you to wait out the 10 year expiration date.
This is a useful tool because you can file for a collection appeal to stop an IRS levy, lien, seizure or the denial or termination of an installment agreement. The collection appeal gives you the opportunity to explain how you think the situation could be solved without the IRS levy or seizure.