Taxation & Estate Planning

Solve your IRS Debts for Good

By Darrin Mish

If you owe the IRS unpaid taxes, it is likely that you fall into one of these categories:

? Those who did not file their taxes or filed them incorrectly or
? Those who are audited because of fraud or some other cause or
? Those who cannot afford to pay their taxes.

No matter which category you fall into, here are two ways you can solve your debts. At all times when dealing with the IRS, be sure you respond promptly and courteously to them. Do not treat the IRS like the enemy. If you show that you are taking responsibility for paying up your taxes, the IRS is willing to be reasonable.

The first way to settle your tax debts is called an Offer in Compromise. This is a provision in tax law for you to repay less than what you actually owe. This lesser amount is called the Offer in Compromise. But not everyone qualifies for this. Generally, you can apply for an Offer in Compromise if you are not able to repay your tax debt in full because of genuine financial hardship. Another reason could be that the tax amount in question may not be fully yours to pay. The IRS will consent to an Offer in Compromise if it can be shown that payment of the Offer in Compromise amount is more viable than having your case classified as uncollectable or to avoid a long-drawn payment plan. The IRS is willing to collect whatever you are able to repay at the earliest possible time, thus avoiding extra expenses for the government. If you feel you qualify for an Offer in Compromise, you should discuss it with a qualified tax attorney before making an application to the IRS as there are other legal considerations to it.

The second way to solve your taxes is to make progressive payments under a payment plan. If you opt for this method to pay up your taxes, the IRS is generally quite flexible in the terms and conditions of your payment plan. They are not out to make life difficult for you. As I mentioned above, if you show that you are taking responsibility for your taxes, the IRS will be flexible in allowing you to repay your dues over a period of time. However you might want to pay off your debts within a year as far as possible unless genuine financial problems prevent you from doing so. What you must do is keep communication channels with the IRS open by responding to any mailings from them immediately.

Solve your IRS Debts for Good is a post from: IRS Tax Problem Solver Blog - IRS Help

Full post as published by IRS Problem Solver Blog on January 25, 2010 (boomark / email).