2 Things About Tax Settlement You’ll Kick Yourself for Not Knowing

September 23, 2019

Every year, there are people throughout the U.S. who owe the IRS money but find that they can’t pay. This can be an incredibly stressful and frustrating position to be in. With so many people finding themselves in this position, the IRS has been forced to come up with a tax settlement solution so they can get at least most of their money.

If you can’t pay your taxes, this puts you in a particularly vulnerable situation. It allows the IRS to put liens on your property or seize other accounts to take care of your debt. They can also garnish your wages until your taxes are paid. However, if you look into tax settlement, you may be able to relieve your debt with the IRS.

Things About Tax Settlement You Should Know

When you owe money to the IRS, they want to collect as soon as possible. They are also willing to work with you to make that happen. Thus, it may be possible to set up a payment plan to get the IRS the money they are owed or even pay less than what you owe.

Repayment Plan

There is a misconception that the IRS wants their money now and it all has to be paid upfront. This can make dealing with them stressful and scary. However, this notion isn’t exactly the truth. While it’s true they do want their money, if you contact the IRS as soon as possible about your inability to pay, they may be willing to negotiate or set up a payment plan.

There are a few different repayment options you might qualify for. The first is making monthly payments through an installment agreement. If you promise to pay your taxes in full, the IRS may be willing to reduce or eliminate your interest or payment penalties. They will determine how much you have to pay every month, and then you’ll need to make these payments on time and in full.

You may also be able to qualify for online payments. There are certain requirements for this repayment program, including that you have to owe $50,000 or less in combined individual income tax and penalties.

Some of the other requirements that come along with negotiating debt and getting a payment agreement for tax settlement is that you have to file all future taxes on time and pay all owed taxes in full. You have the make the minimum payment each month, although you can also pay more if you have the ability. In addition, any future tax refunds that you may get will be applied to your balance until it is paid in full.

Offer in Compromise

An offer in compromise allows you to pay off your taxes for less than what you owe. Getting this isn’t as easy as the repayment plan, but it may be possible to get it if you have a legitimate reason for not being able to pay your taxes. This means that if you are experiencing a financial hardship, the IRS will take this under advisement and examine your income, expenses, assets, and ability to pay to determine if you qualify for this program.

An offer in compromise can be granted if the IRS concludes that your total debt can’t be collected in a realistic time frame. Thus, they will determine what you can pay and may be satisfied to get what they can out of you.

Working With a Professional

Working with the IRS can be a challenge, and trying to get a payment plan or offer in compromise on your own may not be possible. Call Geaux Tax Resolution today to get help on taking care of your tax debt and finding a settlement that works for you.