Tax Relief
Do you owe to the IRS? The IRS will encourage you to pay as much as you can. You may be surprised to know that the IRS isn't that bad after all and if you can't pay your tax debt you can get help. There are five ways to get tax relief.
Offer in Compromise – offer in compromise is the optimal solution when it comes to tax debt. The IRS will let you pay a smaller amount than what you owe; In exchange you'll have to guarantee to make all tax payments for the next five years. Simple, yet, you will probably need a tax specialist to manage the negotiation with the IRS.
IRS Installment agreement – If you have to deal with large tax debt, this solution is the best for you. By getting a help of a tax specialist you can negotiate a long term payment plan to the IRS. It's a monthly payment plan for those of you who have to deal with large tax debt. Those payment plans are interest free. It can be great alternative for those who can't qualify for offer in compromise.
Partial Payment Installment Agreement - It's a new program, which is almost the same as IRS Installment agreement. A monthly payment plan will be set up for the taxpayer but here you will not pay the full amount of you tax debt, you will pay reduced amount which is determined according to your financial situation. You will go under review every two years to see if your payment can be increased.
Currently Not Collectible - Currently not collectible is one of the five options to get tax relief. If a taxpayer is facing financial crisis or tax debt burdens he can request currently not collectible status.
In order to request this status, the taxpayer will have to send evidence that obtained on form 433-f (collection information statement).
Once your status is currently not collectible the IRS will cease collections and wage garnishments. The IRS will have to collect your debt within 10 years, if you status will stay currently not collectible for 10 years, then your tax debt will expire.
Click here to download Form 433-f (Collection Information Statement).
Bankruptcy – this option should be used as the last resort. Bankruptcy will just make it harder for you to get any finance (loan, mortgage etc) in the future.
If you are filing a bankruptcy you may be eligible for discharge your tax debt under chapter 7 or chapter 13.
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