Seeking help with tax debt should be your priority if you find yourself unable to discharge your tax obligations to IRS. Tax debt is a serious problem that can affect you emotionally, financially and socially. The emotional aspect refers to the constant anxiety and waiting for the inevitable IRS notices. Of course, if the IRS resorts to some of its extreme collection techniques like placing a lien on your property or levy wage garnishment, the social and financial implications become severe.
Help with Tax Debt Can Offer you Relief
Surprisingly, settling your IRS debt is not that difficult, with several options being available. Remember, the IRS would rather work with you and collect from you whatever it can rather than get nothing. And your advantage is that you are off the hook and no longer owe the IRS anything.
If the amount you owe is large, it is recommended to get professional help with tax debt rather than attempting to do it yourself. Professional tax consultants like enrolled agents, CPAs, or tax attorneys have vast experience in dealing with the IRS and obviously have expert knowledge in the area. They will consider the particular circumstances of your case, your current financial situation, special considerations if any, and make the best recommendation on the course of action to obtain tax debt relief.
So what are the possible options available to you for tax debt relief?
Options for Help With Tax Debt
Depending on your circumstances, a professional enrolled agent, CPA or tax attorney can help with your tax debt in any of the following ways.
1. Offer in Compromise
Your representative negotiates with the IRS to possibly reduce considerably the total tax amount you owe. Such an offer is accepted by the IRS only if they can be adequately convinced that it would not be possible for them to earn more from you even on using the most severe collection techniques, or if there is a doubt regarding your responsibility for the taxes owed or if the IRS is convinced that collection of the entire amount owed will cause inequitable financial hardship to the taxpayer that is, you. To avail this option of help with tax debt, the application for offer in compromise has be made in the suitable format and all necessary supporting documentation has to be provided to the IRS for review.
2. Penalty Abatement
Abatement of penalty policy is one of the most commonly used tools to help with tax debt, which seeks to completely eliminate or reduce considerably the penalty associated with unpaid taxes. In general, 30-40% of the tax amount is made up of the penalty imposed on non-payment of taxes and the compounded interest on the penalties. If your penalty abatement is accepted, you are able to reduce your overall tax debt significantly.
In order to accept your penalty abatement request, the IRS requires you to provide proof of exceptional circumstances that prevented you from filing and paying your tax returns on time. Such circumstances include death of a loved one like spouse or child, time spent away from normal course of life like in prison, rehab or abroad, or if your tax records were destroyed due to accidents like fire, flood or any other reason beyond your control.
3. Installment Agreement
Installment agreement is a form of help with tax debt, where you pay the IRS what is owed in manageable monthly installments. The advantage of course is that you are spared from making a lump sum payment at one time, which you probably could not afford. However, keep in mind that during the period of paying installments, the penalties and interest most likely will continue to accrue. So depending on your current financial situation, possible financial future and the size of your tax debt, a professional enrolled agent, CPA or tax attorney can point out how best to use this option for maximum benefit.
Our firm specializes in offering clients the best professional help for their tax debt. The company is headed by Mike Habib, an IRS licensed Enrolled Agent. He is licensed to represent clients in various tax related matters in all the 50 states. Mike specifically works towards resolving issues of unpaid taxes focusing on relieving your burden of tax debt. He has vast experience in dealing with IRS agents and works towards the best possible solution for you, so that you can get your tax debt out of the way and start living again.