Irs Debt Help

Whenever dealing with IRS debt, help is pretty much a requirement, whether it involves legal advice or simply researching the process. IRS debt is one of the most difficult types to discharge, and it may not just disappear after filing for bankruptcy, much as many other kinds of debt will do. In all, there are five different ways to get out of IRS debt.

Installment agreements for IRS debt help

The easiest way to take care of IRS debt is to set up an installment plan. This is a plan that allows the taxpayer to pay back the debt over time by agreeing to pay a set amount of money each month. The good thing about installment agreements is that it means the IRS will not file a federal tax lien, which could hurt your credit rating.

Partial payment installment agreement for IRS debt help

Partial payment installment agreements require regular, monthly payments to the IRS, but those payments do not pay off the full amount at the end of the agreement. Once the agreement is over, whatever is left of the debt is forgiven. The partial payment agreement is basically like a structured settlement with the IRS. Taxpayers need to know how much they owe, plus penalties and interest. They also need to submit proof of income to show why they can’t afford to pay the entire amount back to the IRS. A tax professional will use three things to determine the lowest monthly payments and ending settlement amount possible for the taxpayer’s case. He’ll factor in the amount of income, the amount of tax owed, and the length of time left on the statute of limitations for the IRS to collect the debt. There’s no guarantee that the IRS will approve the agreement, but a tax professional who’s experienced in IRS debt collection practices should be able to come up with an agreement that the IRS will accept.

Offer in compromise for IRS debt help

One of the more difficult ways to take care of IRS debt is an offer in compromise. Taxpayers who file this agreement offer to pay less than the full amount of your tax debt. They also have to agree to file all future tax returns on time and pay their taxes on time for the next five years. The IRS also agrees to keep any tax refunds, payments, or credits applied to the taxpayer’s tax debts before she submits her offer in compromise. The IRS also keeps any tax refunds that would have been payable to the taxpayer during the calendar year his offer in compromise is approved.

For debt help, IRS: Currently not collectible

The fourth way to get rid of IRS debt is more of a temporary rather than a permanent solution. In some cases, the IRS will declare that the taxpayer has no ability to pay. This is known as “currently not collectible.” Taxpayers who wish to seek this declaration will need to submit a lot of evidence which proves they cannot pay their tax debt. The evidence collection process begins with IRS Form 433-F. If the IRS declares that a taxpayer has no way to pay the debt, then the IRS must stop trying to collect on the tax debt. The only way this tax debt solution is permanent is if the 10-year statute of limitations expires while the taxpayer is still currently not collectible. Basically, if the taxpayer is considered “currently not collectible” through the end of the 10 years (regardless of whether he was ruled to be in that state in the beginning of the 10 years), then the IRS must discharge the debt.

IRS debt help: Bankruptcy

Filing bankruptcy can only get rid of tax debt that is at least three years old. In other words, the due date of the tax return must be at least three years ago. The IRS must also have assessed the tax debt at least 240 days before the taxpayer filed for bankruptcy.