Tax Debt

FinanceTax

  • Author David Horvath
  • Published May 12, 2009
  • Word count 499

Many Americans have unpaid dues to the IRS. But the IRS has decided to go soft on the citizens understanding their hard times. Presently, the IRS offers quite a few options for clearing your tax arrears. The most prominent offer that it makes to the citizens in tax debt is an offer of one time settlement .under this offer you can settle the IRS at one go by making a single shot payment where the IRS has agreed to settle for a lesser amount than what was originally due. Instead of making a single payment you can also make payments in part under this scheme but you must finish off paying the entire due in the short term. Another option the IRS has come out with for the citizens in need of help is a monthly payment option. Once your tax arrears have been fixed you have the option of paying off that amount in monthly installments. Yet another option before you is to make a part payment of your tax arrears now and pay the balance amount due in monthly installments or half yearly installments stretched over a long term. In extreme cases where the IRS has understood the gravity of the situation it agrees to leave the amount as not to be collected for at least another year.

There is always the last option of filing for a bankruptcy in compliance with the rules stipulated by the IRS.

Generally people in tax debt focus on the first option of compromise. Here the IRS would agree to settle for a reduced tax from the citizens. But it is not so easy in getting it done as only 15%of the people succeed in getting an offer of compromise. This is because of the complex forms that have to be submitted and the necessity to rope in the services of a tax consultant to achieve this purpose. But if you manage to get the services of a tax consultant they steer you clear of the many complex formalities involved and achieve the purpose. Admittedly, this offer of compromise is a long drawn process that takes any where between one to two years to arrive at a decision as to how much would be the amount of compromise. This may be decided as the reasonable collection which is about 10%less than the initial amount that was due from an individual or a company.

Apart from this arrangement IRS allows for those stricken with tax debt, certain installment agreements which may range from a short term installment plan to a long term installment plan. Sometimes a currently not collectible status is awarded to a citizen if his income currently is found to be less than the normal allowable expenses, and if he has more allowable expenses than his income.

These tricky formalities are not easy for every body to follow and it is always better to hire a certified tax professional to handle your case at the IRS and achieve your purpose.

John Davis is a respected Debt Consolidation writer that writes for various business websites. He also runs an informational child bipolar disorder website that provides millions of helpful links and articles. To get more information goto Wizloans

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