Back Taxes | 6 Ways to Settle Your IRS Tax Debt

May 13, 2019

In 2017, the average delinquent taxpayer owed $51,992 in back taxes to the IRS. Luckily, the IRS writes off nearly $10 billion in delinquent tax debt every year. To benefit from this, keep reading to learn six ways to settle your IRS tax debt today.

How to Settle Your Back Taxes

Installment Agreement

If you owe the IRS $50,000 or less in back taxes, interest, and penalties, you can apply for an installment agreement online or over the phone. If you owe the IRS over $50,000, you must mail Form 9465 to your local IRS office to determine what type of installment agreement you qualify for. An installment agreement allows you to pay off your delinquent taxes over the course of six to 10 years.

Partial Payment Installment Agreement

A PPIA, or partial payment installment agreement, is one of the best methods for settling your IRS tax debt. Using this method, the IRS looks accounts for your essential living expenses based on your location and determines how much you can afford to pay monthly. The IRS will review your case every other year to determine if you can afford to pay more.

Hiring a professional is critical because she can analyze your entire financial situation and determine which resolution method is best for you. Furthermore, they handle all of the paperwork and negotiate on your behalf.

Offer in Compromise

An offer in compromise means serious negotiations with the IRS. The end result is paying a lump sum for less than you owe in back taxes, penalties, and interest. With an expert fighting for you, your tax savings could easily be in the thousands of dollars.

Not Currently Collectible

If the status of your tax debt is “not currently collectible”, the IRS agrees to not attempt debt collection for a year. This is the ideal solution for taxpayers who cannot afford an installment agreement or a sufficient Offer in Compromise payment. Changing the status of your debt stops IRS levies, liens, seizures, or the termination or denial of an installment agreement.

Release Wage Garnishments

One of the most terrifying consequences of owing delinquent taxes to the IRS is wage garnishment. The IRS sends a letter to your employer and can take the amount of your income greater than 30 times the national minimum wage or 25% of your disposable income, whichever is less. You get into trouble, however, if you have other delinquent debt, such as student loan debt, being garnished, as well.

With professional help, you can prove to the IRS that you cannot afford to survive with the levy they have taken. This offers you the opportunity to modify the garnishment arrangement or have it released completely.

Stop the IRS From Levying Your Bank Account

If the IRS sends a letter to your bank rather than your employer, your liquid assets (your checking accounts and savings accounts) can be frozen for 21 days. During this time, you cannot access your money to pay your mortgage, put fuel in your car, or buy groceries. Legally, the bank is required to remove the entire amount available in your account that day up to the amount of the levy.

Let’s say you owe the IRS $10,000. You have $6,000 in your checking account because you have to pay your mortgage, flood insurance, property taxes, and car insurance. The bank must transfer all $6,000 to the IRS to go towards your back taxes. To stop this, have an expert help you request a collection appeals program.

Get Professional Help Today

The most important step you can take towards resolving your back taxes is seeking professional help to settle your IRS tax debt. Trust your delinquent tax debt today to professionals with over 35 years of experience settling delinquent taxes. Contact us at Geaux Tax Resolution today.