Settling the tax debts of your own accord
There are many who may have had problems in paying down their tax debts; you are not the only one. So, there’s nothing to feel lost or dejected about this. If you owe quite a large amount in tax debt, there are some options which can help you solve the tax debt problem. The two main options are the installment payment option and the other is the settlement payment option. There are again various options under these two options, which you can avail of in order to pay off your tax debts. The tax debt settlement options work to help you down most of the tax debts.
Settling IRS tax debt
Some of the options under which you can settle your tax debts are:
1. Compromise offer – Offer in compromise provides the option to settle tax debt where you can pay less than the full amount owed. If you cannot pay off the taxes in full, you can try out this option. The circumstances which are considered to determine if you can make payments under this option are:
- Your ability to pay
- Your income
- The expenses and
- The asset equity
2. Penalty reprieve – If there are options for you to prove that there are valid reasons due to which you are having problems in paying down the IRS tax debt (due to non affordability), the IRS may allow you the penalty reprieve. At the least, on an approximation one-third of the tax debt penalty amount resulting out of non-payment of the taxes, may get abated by the IRS later. This significantly lowers the debt amount with regards to the taxes owed by you to the IRS.
3. IRS tax bankruptcy – If you think that you are going to qualify for the Chapter 7 bankruptcy, you can consider trying out this tax debt relief option. It is only the income taxes which can be discharged through bankruptcy, and that too the recent ones. In order to decide as to which of the tax debts can be included in a bankruptcy program, you can talk to your bankruptcy attorney. He/she may let you know about the requirements or the eligibility criteria for including tax debts in bankruptcy. However, you need to know that this definitely cannot be considered as a good option as always, because bankruptcy has a high negative effect on the credit and almost all your assets are going to be liquidated through this.
There is also the option for you to get the help of a tax professional. He/she may help you with settling the tax debts, and therefore help you in solving the tax debt issues. This process won’t be highly different than a debt settlement program, though the types of debts are different. So, these are the options you can have under the tax debt settlement option, and if you are having problems in managing your tax debts, you can try out these options based on the tax debts owed by you, and the level of your affordability.
George Adams is an independent Financial advisor and attached to some financial communities. He has vast knowledge in debt consolidation, debt settlement, etc. For information on debt settlement please visit here: http://www.debtconsolidationcare.com/de … ement.html.
