If you've fallen behind on your taxes, you may feel as if you're facing the end of the world. After all, no one wants to be out of compliance with federal tax laws. Unfortunately, many people choose to simply ignore their tax problems; often in the hope that the issues will go away on their own. However, ignoring tax problems can leave you in even worse shape, especially where the amount you owe is concerned. In fact, the longer you wait, the more money you'll owe to the IRS. That's where tax resolution comes into the picture. Tax resolution allows you to come clean on your taxes and pay off any debt you owe to the IRS. Once the resolution agreement is completed, your tax record will be wiped clean. Here are three different ways you can use tax resolution to your benefit on outstanding IRS debts.
Pay it All Off Over Time
If you've discovered that you can't afford to pay all your back taxes in one lump sum, you can request to make smaller payments instead. Monthly payments will allow you to pay off your tax debt a little at a time. You can either request to pay the entire amount in small monthly payments, or you can make a larger initial payment. The large initial payment allows you to bring down the total amount owing, which will reduce the size of your monthly payments.
Request an Income Deferment
If you've filed your back taxes, but you're not in a position to make any payments at all, you can request an income deferment. This method is beneficial when your debt is higher than your monthly income, or when you can't afford your basic needs. Once you file for an income deferment, the IRS will take a close look at your income to determine your eligibility. While this method can take time, you'll avoid paying off your tax debt once you're approved.
Practice Your Negotiating Skills
If you can afford a portion of your tax debt, but not the entire thing, you have the option to make a settlement offer. This tax resolution option gives you the opportunity to negotiate your debt with the IRS. In most cases, the IRS will look at your financial status to ensure that you can't afford to pay the entire debt. However, if your settlement offer is approved, your debt will be cleared once you've paid the settlement offer in full.Share