IRS Tax Debt Help – Handling The IRS If You Are Obligated To Pay Prior Year Income Taxes

When you owe back taxes, there’s a few routes that you could consider. Initially, it is possible to arrange a payment plan with the Internal Revenue Service. This is particularly effective when you are unable to make a one time payment. This will, with time, help you get on the right track.

Before establishing an installment agreement with the federal government, make sure that you have submitted a return for each year in which you were required to do so. There have been many cases where the Internal Revenue Service had alleged that taxpayers were supposed to pay a considerably greater sum compared to what they truly owed. This situation happens to numerous taxpayers since only their earnings are recorded from the businesses that gave them money. As a result, the IRS had no way of knowing precisely how much your write offs were supposed to be. You might be in a position to reduce your tax bill by simply processing your back income taxes with all of your deductions.

At the very least, your payment should be sufficient in which your balance will be paid off within 5 years. This installment payment will incorporate fees for interest and penalties. Should you be in a position in which the account balance is a lot greater than your own capacity to pay, then an Offer in Compromise could be a better option. With the Offer in Compromise, you may be able to work out a lower balance than what you actually need to pay. Like every other creditor, the IRS is sometimes happy to settle for less over getting nothing.

Talking with the federal government is essential, even though things seem overwhelming. The absolute most detrimental reaction you can have is to neglect the IRS. Remember, the IRS has the ability to put liens on assets that you have. This is meant to secure the payment associated with past due income taxes that you owe. With that in mind, you ought to put a higher priority on paying off student loans and paying the Internal Revenue Service than other creditors including credit card providers. If the worst case scenario in which you had to file bankruptcy were to take place, you’ll still owe the IRS. Bankruptcy will generally get rid of the debts owed to other creditors, but not to the IRS.

When you get professional guidance, be certain that the specialist you consult is realistic. When something seems to good to be true, it usually is. For example, when you owe the Internal Revenue Service fifty thousand and make over $100,000, you will not qualify for an Offer in Compromise which will get rid of much of your income tax debt. In this example, you clearly have the ability to pay.

Eileen E. Jacobs is an Enrolled Agent in Las Vegas | accountant Las Vegas

About The Author

TK Bradley

tk bradley is a tax relief expert with many years of dealing with the irs and helping taxpayers to understand their rights and to settle their tax debt problems.