Help With Tax Debt
Falling behind on tax debt can be a scary proposition. The threat of tax levies and wage garnishments or even seizure of property is a very real possibility if you do not pay your tax debts. Fortunately, there are a variety of options available to taxpayers including tax debt help from the Internal Revenue Service.
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Contact the Internal Revenue Service
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If you know you will be unable to pay your tax debt, the first thing you should do is contact the Internal Revenue Service (IRS). The IRS will ask for detailed financial information including any financial hardships and will try to find a payment plan that will work for you. The worst thing you can do is ignore notices received from the IRS.
Internal Revenue Service Options
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If you are unable to pay taxes owed at the time you file your federal return, the IRS may offer to allow you to pay the amount owed within 60 to 120 days. The penalties and interest in paying within 60 to 120 days are less than those of an installment agreement. The installment agreement is a plan offered by the IRS for taxpayers owing $25,000 or less. You make monthly installment payments on the tax you owe in smaller, more affordable payments. You will have to complete an online payment agreement with the IRS. Other options that may be available to you through the IRS include flexibility for missed payments, a temporary delay of payments, penalty interest abatement or an offer in compromise.
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Other Options
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There may be other ways to satisfy your tax debt. If the amount of tax debt is relatively small, check into getting a cash advance on your credit card. Banks or finance companies also make small personal loans. Your employer's credit union may also be able to make a loan. It is also possible in some cases to borrow against a life insurance policy.
Warnings
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Beware of tax relief companies who promise to settle your tax debt for pennies on the dollar. These companies are referring to the offer in compromise option with the IRS. According to the IRS, you can apply for tax relief options with them, including the offer of compromise, without the help of a third party. Some of these tax relief companies demand payment upfront before an offer of compromise is accepted by the IRS. The worst of these companies have been reported to the Federal Trade Commission for making unauthorized charges to a consumer's banking account or credit card.
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References
Resources
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
