If you owe back taxes and it comes to solving back taxes owed you have many options. It is best that you learn all available options and see what fits your unique tax situation the best before taking action. Some important things to consider before making your decision of what debt settlement method to use are your tax amount owed, the greatest amount you can afford to pay, the amount of liquid assets you have, and if you would be able to pay amount in full if you just had more time. Below are the 5 most common methods to solving tax debts.Offer in CompromiseThis way allows you to compromise the tax amount owed for much less than the original amount owed. If you have ever heard the saying, “Settle for Pennies on the Dollar”, this is the method that is used. It shouldn’t come to a surprise that this is most difficult way to settle with the IRS. The IRS has strict requirements to qualify for an offer in compromise. The purpose of an offer in compromise is to find a compromised amount that works for the tax payer and the IRS. This means the IRS will only settle for less if you can prove it will cost them more to try to get the money from you. This is a good choice if your total assets is less than the amount of tax debt you owe.Installment AgreementThis is the easiest way to settle tax debts. With an installment agreement you will be required to pay monthly payments towards the tax amount owed in a period of less than 3 years. With this agreement you will end up paying more than the original amount owed. This method should be used if you cannot pay off in full but you can afford to pay off over time.Buy More time to pay in fullIf you need to buy more time to pay the total amount due it can easily by done by using your understanding of the IRS system to your advantage. When taxes are unpaid it begins the IRS automated notice system. The IRS send a series of automated letters before it begins collections. Typically the IRS sends an original assessment letter stating the amount of tax owed plus any interest and penalties then it will send a series of four CP Letters (Computer notices noted by a CP number in upper right). Typically once you start receiving these letters you have 4 to 6 months before the IRS takes collection action if nothing is done on your part. To delay the IRS and buy yourself more time all you have to do is send a letter back to the IRS in response to the assessment notice or CP notices and state that you can’t pay the amount in full at the current time and ask for a 45 day extension. Once the 45 days is up and you haven’t done anything , it will just start up collection system where it left off and you will receive another letter and you can repeat the same process. You must pay off the taxes owed before the IRS takes action against you.Getting Currently Not Collectible StatusThis way won’t resolve your tax debts, but it temporarily stop collections. When you receive this status, the IRS will pause collections until you can pay. Wile being uncollectible it is possible to have the statute of limitations expire and you will no longer be responsible for those tax debts owed.Back Taxes SpecialistTax specialists are many times the the easiest way to get help with back taxes. Tax specialists have the best outcomes for getting offer in compromises settled and for the least amount of money. Tax specialists can be the best bet for getting the best installment agreement setup with the IRS as well. Most tax professionals will offer a free consultation to give you your options, likely outcomes, and cost. It is best to talk to multiple tax professionals to find the one that you feel gives the best suggestions, you get along with best, and gives you a reasonable price.Every year thousands of people settle their unpaid back taxes with the IRS. Tax laws only continue to get more complex and this causes more people have problems with back taxes. Just knowing these options can help you save thousands when dealing with IRS issues, settle soon, prevent interest and penalties from building.
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BackTaxesHelp.com is a website with all the information needed to settle back taxes with the IRS. If you owe over $10,000 dollars to the IRS, call 1-800-928-5035.