Dealing with tax debt can be a daunting and stressful experience. However, the Internal Revenue Service (IRS) offers various debt resolution options to help individuals and businesses manage and eliminate their tax debts.
An installment agreement is a common debt resolution option that allows taxpayers to pay their tax debt in manageable monthly installments. This option provides financial relief by spreading out the payments over an extended period, making it more feasible for individuals and businesses to meet their tax obligations without straining their finances.
There are four essential types of IRS installment agreements: Guaranteed Installment Agreements, Streamlined Installment Agreements, Regular Installment Agreements, and Partial-Pay Agreements.
A Guaranteed Installment Agreement is typically available to taxpayers with a debt of $10,000 or less. There is a small fee to set up this plan, and it does not require extensive financial disclosures. A Streamlined Installment Agreement is designed for those with a debt between $10,001 and $50,000 to the IRS. This process involves a streamlined approval process and requires the production of straightforward financial documentation.
A Regular Installment Agreement is not guaranteed, nor is it streamlined. This process requires the production of substantial financial documentation and disclosure of assets, liabilities, income, and expenses because the IRS wants to understand your ability to pay. A Partial Payment Installment Agreement is designed for taxpayers who cannot pay their full debt within the statute of limitations. This process requires full financial disclosure and, if approved, will result in you paying off less than the full debt.
Another debt resolution available to taxpayers is an Offer in Compromise (OIC). An OIC is an option for taxpayers who are unable to pay their tax debt in full. It is designed to provide a fresh start to taxpayers who are facing financial hardship and are unable to pay their tax liabilities in full. The IRS may accept an Offer in Compromise if they believe that it is the most they can reasonably expect to collect from the taxpayer within a reasonable period of time.
If a taxpayer is experiencing financial hardships and cannot afford to pay their tax debt without causing undue economic hardship, the IRS may grant a Currently Not Collectable status. This temporarily suspends collection efforts, giving the taxpayer time to stabilize their financial situation. However, penalties and interest will continue to accrue while in Currently Not Collectable status.
Taxpayers may also request a penalty abatement as a form of debt relief if they believe that the assessed penalties are unjust or excessive. Penalties may be abated due to reasonable cause, such as serious illness, natural disasters, or circumstances beyond the taxpayer’s control.
In cases of extreme financial hardship, bankruptcy may provide relief from certain tax debts. However, not all tax debts are dischargeable through bankruptcy, and the process can be complex.
Regardless, navigating the world of IRS debt resolution can be complex, and seeking professional assistance is often advisable. A tax attorney is a legal professional specializing in tax law who can play a crucial role in assisting individuals and businesses in resolving IRS debt.
A tax attorney possesses in-depth knowledge of federal and state tax codes, regulations, and statutes. This expertise allows them to interpret complex tax laws, understand the nuances of tax debt, and apply relevant provisions to a taxpayer’s specific situation. Their familiarity with tax laws enables them to identify potential issues, devise effective strategies, and provide accurate guidance to navigate the debt resolution process.
Additionally, no two taxpayers’ financial situations are identical. A tax attorney will assess the unique circumstances of a taxpayer, including income, assets, liabilities, and expenses, to tailor a debt resolution strategy that aligns with their specific needs. Whether negotiating installment agreements, pursuing an Offer in Compromise, or exploring other options, the attorney will develop a plan that maximizes the chances of a successful resolution.
Dealing with the IRS can be intimidating and overwhelming. A tax attorney acts as an intermediary between the taxpayer and the IRS, handling all the communication on behalf of their client. This not only alleviates stress for the taxpayer but also ensures that all communications are precise, accurate, and consistent,
A seasoned tax attorney will also negotiate on your behalf with the IRS to get the best debt resolution solution possible. Whether negotiating an installment agreement, a reduction in penalties, or an Offer in Compromise, a tax attorney understands the intricacies of tax law, leverages their knowledge of tax law, and advocates on behalf of the taxpayer to secure a favorable resolution.
IRS debt resolution involves more than just settling the outstanding balance. A tax attorney will work to mitigate the potential long-term consequences of tax debt, such as preventing wage garnishments, bank levies, or property seizures. By taking proactive measures, they help safeguard the taxpayer’s financial future and minimize the impact of IRS debt on their overall well-being.
Resolving IRS debt is a complex and often daunting undertaking. The attorneys at Premier Legal Solutions bring a wealth of expertise, knowledge, and negotiation skills to the table in achieving favorable debt resolution outcomes. If you are considering IRS debt resolution, the team at Premier Legal Services, PLLC, are here to help you seek a favorable resolution. Contact them at (267) 245-0649 or firstname.lastname@example.org for a consultation.