Yes, taxes may feel like a burden that you cannot get rid of, but you have to pay them by hook or by crook or face strict collection actions by the IRS. To ease the burden of struggling taxpayers, the IRS offers debt forgiveness programs with certain conditions. These IRS debt relief programs do not completely remove your tax obligations from your account but help reduce your burden. In a financial strain, even the reduction of the tax debt can do a lot of wonders. Here are the 3 ways you can avail IRS tax debt relief and reduce your tax burden.
Offer in Compromise
When you offer to pay a part of the taxes you owe and the IRS agrees, it is called an Offer in Compromise. Keep in mind, an offer in compromise is not available for everyone. It is only for those in financial hardship. To check eligibility for individual taxpayers, the IRS provides a pre-qualifier tool. The basic eligibility criteria entail requirements like you:
have filed all your previous returns
have no prior history of bankruptcy
have a valid extension for the due year
The IRS will check your ability to pay, income, expenses, and asset value and then approve a request for Offer in Compromise.
Installment Agreements
A taxpayer, who is unable to pay the taxes in lump sum by the deadline, can pay the tax debt in installments. IRS form 9465 is used for requesting an installment agreement, but to be eligible for installments:
You should have filed all the previous returns
You have to prove that you are unable to pay the taxes within the deadline by showing the savings and brokerage accounts.
You have to prove that you are unable to take loans and other refinancing options.
You lack the equity to pay off your tax debts.
The IRS offers long and short term payment plans and various mediums to pay the due depending on the tax bill.
Currently Not Collectible Status
There are times when a taxpayer is not able to pay taxes due to financial instability and other reasons. In such situations, the taxpayers can apply for the ‘Currently not collectible status’. Under this request, the IRS extends the time limit of the tax repayment by placing the taxpayer’s account under ‘currently not collectible’ status. The IRS agrees to this debt relief request only when paying taxes is causing financial hardship to the taxpayer and doing so would make them unable to fulfill even basic needs. The taxpayers need to prove their likely financial strain by providing relevant documentary proof. To check whether you are eligible for this IRS debt relief option and to draw up a convincing case, consult a leading tax attorney.
Summary
Paying taxes is not only a civic responsibility but also a legal requirement. If you are experiencing difficulty in meeting your tax obligations, you must consider IRS debt relief options. Dallas residents looking to check their eligibility or seeking legal advice and help on Offer in compromise, penalty abatement, and any other debt relief options, can consult a leading tax attorney in Dallas. An experienced debt attorney will help in solving your tax debt problems by advising you on the best ways to get your tax debt burden off your head.
