Given that, there are various approaches to settle the back taxes that you owe the IRS, it is best to choose the right one according to your predicaments. The difficulties brought on by the economic downturn as a result of the sub-prime real estate collapse carries a silver lining with it in case you have financial obligation to the Internal Revenue Service. This is because a faltering economy will be the ideal time to make a deal on your outstanding federal tax and even the feared IRS realizes that they must be reasonable in their collection endeavors and give tax payers a bit of relief during difficult economic periods. Therefore if you’re in the position to do this, now is actually the time to get a deal.
Here are a few of the more popular ways for you to settle any back taxes owing to the internal revenue service:
In case you are unable to pay immediately on your settlement they can arrange a plan for you to make repayments in lesser and more feasible sums until everything is settled. You will still be charged penalties and interest, so you can notice where you might save money if you are paying the amount owing as fast as possible.
Offer in Compromise
Basically, this is an arrangement between the IRS and taxpayer which enables the delinquent person to settle back taxes for much less than the actual amount to be paid. The IRS have to be assured that the sum due can’t be repaid entirely before they agree to an OIC. For this reason it is advisable to get a professional IRS tax attorney to represent you, since offers in compromise will be complex due the amount of criteria which the IRS take into account to qualify you.
Partial Payment Installment Agreement
In the event that you are unable to satisfy the obligation of the installment agreement, a partial payment alternative will allow you to make payments in even smaller amount monthly. In the end, you could find yourself paying much less than the initial amount that you owed on the initial tax debt.