Some Americans owe back taxes at some point in their lives. When you're unable to pay your taxes to the IRS, tax bills can arise. Interest and penalties are also added to the tax liability. If you're enduring from this type of IRS problem, what must you do?
There are 5 methods to settle your tax bill. Your present financial situation will help determine which method will work best for you.
A long-term reduced amount payment plan, or partial-pay installment agreement Installment agreement: Monthly payment plan *Either of these two installment agreements may need you to accomplish Form 9465 (Installment Agreement Request) and Form 433-A (Collection Information Statement). You will need to determine the sum you can afford to spare for your monthly payment. Three months' worth of documents of income and expenses are needed to complete Form 433-A. A letter is also written asking for an installment agreement. Send it with the forms and 3 months' worth of documentation to the IRS. You should receive a reply within 90 days. Filing for bankruptcy: Tax debts are discharged under Chapter 7 or Chapter eleven, twelve, or 13 bankruptcy. Chapter seven bankruptcy allows you to liquidate your debts and Chapter 11, 12, or 13 bankruptcy lets you negotiate a payment plan. File Form 656 (Offer in Compromise) to reduce your tax liability, either by lump sum settlement or short-term settlement plan, by giving evidence of Doubt as to liability, Doubt as to collectibility, or Hardship. Presently not collectible status: The IRS will not collect a tax debt for a specified duration, typically a year. This means that you cannot pay. Form 433-F must be filled out. You will receive a yearly statement showing how much you owe.
You can determine how to resolve your tax bill with the help of a tax professional. IRS problems can stress you out. Why not get this circumstance under wraps and start living your life again?
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