How to Get Out of IRS Debt
If you find yourself owing money to the Internal Revenue Service (IRS) for unpaid taxes, it can be a stressful and overwhelming situation. However, there are several ways to get out of IRS debt and resolve your tax problems. In this blog post, we'll discuss some strategies for getting out of IRS debt, including paying off the debt in full, setting up a payment plan, and settling the debt for less than what you owe through the Offer in Compromise (OIC) program.
Pay off the debt in full: The easiest way to get out of IRS debt is to pay it off in full. If you have the money to do so, you can simply write a check or make a payment online to the IRS. If you're unable to pay off the entire debt at once, you may be able to set up a short-term payment plan, known as a “partial payment installment agreement,” to pay off the debt in full over a period of time.
Set up a payment plan: If you are unable to pay off the debt in full, you may be able to set up a payment plan with the IRS. This can be done through an installment agreement, where you pay off your debt in monthly payments over a period of time. There are several types of installment agreements, including regular installment agreements, streamlined installment agreements, and partial payment installment agreements. Depending on your income, you may be able to get a reduced payment plan.
Offer in Compromise: The Offer in Compromise (OIC) program is a way to settle your tax debt for less than the full amount you owe. The IRS will consider your ability to pay, income, expenses and assets to determine if you qualify for this program. This is a good option for those who are unable to pay their tax debt in full or through a payment plan. However, it's important to note that the acceptance rate for OIC is low and the process is quite complicated.
Seek Professional Help: It can be helpful to seek out professional help from a tax attorney or CPA to navigate the complex process of resolving IRS debt. They can help you understand your options and assist you in dealing with the IRS.
Filing for Bankruptcy: A final option for getting out of IRS debt is to file for bankruptcy. This will provide a way to discharge tax debts that are more than three years old. But please consider that this is a last resort and will have severe long term consequences.
Regardless of which strategy you choose, it's important to stay in communication with the IRS and to comply with all filing and payment requirements. If you fail to do so, the IRS can take additional collection actions such as garnishing your wages or levying your bank account.
In conclusion, getting out of IRS debt can be a stressful and overwhelming situation, but there are several strategies to help resolve the problem. Paying off the debt in full, setting up a payment plan, and settling the debt for less than what you owe through the Offer in Compromise program are all viable options. It's also important to remember that seeking professional help from a tax attorney or CPA can be very helpful in navigating the process. And filing for bankruptcy is a final resort. The most important thing is to stay in communication with the IRS and to comply with all filing and payment requirements.