If you are struggling with a high tax debt and you have lost your job, you may be considering the possibility of applying for a tax settlement with the IRS. However, you must be in a financial hardship to qualify. Luckily, the IRS offers several different methods for settling your debt, and your best option may be to use an offer in compromise. This method involves negotiating with the IRS to reduce the amount you owe.
While most people think that forgiveness is enough to put their worries to rest, this isn’t always the case. A tax settlement can involve a complicated bureaucratic process that can take months, said tax fraud defense lawyer Missouri. When you pay a reduced amount to the IRS, the debt is considered settled in full. In some cases, the taxpayer is not released from any financial responsibility and will no longer be subject to penalties or late fees. If this is the case, the tax debt settlement process can get you out of debt quickly and with minimal hassle.
The IRS has a few options for taxpayers who cannot pay their debt. One of them is an offer in compromise. This method allows the IRS and the taxpayer to agree to a lower amount. It’s generally used by those with low monthly income and few assets. If you have no prospects of earning income in the future, you can choose to apply for an installment plan with the IRS. This method will be less expensive for you in the long run, but it will take longer than a bankruptcy.
A taxpayer can negotiate with the IRS directly if they have a tax debt under $10000. If the debt exceeds $25000, however, you should contact a tax professional and negotiate a payment plan. This is the best option for most taxpayers. It will save you a lot of time, money, and trouble. It will help you get back on your feet financially. And if you have a large amount of money to settle, you may be able to make your payments over time.
When you’re trying to resolve a debt with the IRS, you should never ignore it. Even if you’re able to pay your debt in a reasonable amount, you can find an IRS-approved solution that will not make you feel overwhelmed by your debt. An offer in compromise is usually a good option if you have a small debt and you’re not able to pay the full amount.
In addition to filing a joint return, you may also be able to choose an Offer in Compromise with the IRS. While you are liable for all back taxes owed, you can still choose to settle the debt with the IRS. You’ll have to meet the requirements and the deadlines of the offer in a timely manner. If you don’t want to default on your debt, then the IRS will not accept your application.