Each year thousands of people began a meltdown as tax day approaches. How much are we going to owe and how are we going to pay them? These are people who want to pay their taxes but do not have the means to do so. The good news is the IRS has several strategies for people like these. These strategies have been tested and tried and found to work. The key is to be willing to seek help, show good faith and to do it in a timely fashion.
One of the most effective tax relief strategies is the Offer in Compromise. This strategy is for those who owe back taxes but do not have the resources to pay when they are due and not likely to have money to pay the taxes in the foreseeable future. It is also for those who would suffer hardship in another area of their lives if they paid the taxes. This strategy allows the person to pay off their indebtedness by paying less than they what they actually owe. The person’s ability to pay, their current income and their current expenses are investigated to see what is a reasonable amount for them to pay. If the IRS has not come to a conclusion about your situation within two years, whatever you are able to pay will be automatically accepted.
Penalty Abatement is another common strategy. This is when the person requests that any accrued penalties and interests be removed from the total amount owed. The IRS will consider removing these if you can show just cause as to why you cannot pay all of your taxes when they are due. These will continue to accrue until the full amount is paid. Things the IRS will take into consideration to remove these include death, loss of job or if you have been incarcerated.
The person may opt to pay the taxes they owe by an Installment Plan. If the amount you owe is less than $50,000 you may be able to pay the taxes in payments for a stated number of months. The taxes must be current and application for this plan may be made online or by telephone. The government cannot file a lien against any of your assets as long as you make the payments on time. However, this plan agreement may be revoked if the monthly payment is missed or if the person fails to file taxes.
The Innocent Spouse Relief and Currently Not Collectible strategies are also available for consideration. The Innocent Spouse Relief strategy is for married taxpayers filing jointly. If one spouse has misrepresented facts on the return the innocent spouse may be relieved from taxes owed. If people do not have the means or resources to pay they may also be relieved of their tax debt.
A tax resolution professional can help you determine which strategy is best for you. A timely response and your willingness to do right goes a long way with the IRS.