DEALING WITH THE IRS AND TAX PROBLEM
Dealing with the IRS and your taxes does not have to be a demanding experience provided that you use the resources to communicate with them. The IRS provides email correspondence that gives taxpayers the opportunity to stay current on tax and filing requirements. However, the tax problem can be devastating. Even with all these questions answered, you can still ask yourself how you can handle your taxes and make plans for your future. If you have tax debt to be paid, the pressure to have a plan may be even more pressing. Tax problems can be dealt with in the following ways:
Using a credit card
It may be best to make use of a credit card if you need to pay in full, but don’t have the money or the time. This is not the most preferred choice of most people; however, if you have a pressing desire to cancel debts immediately, it may be the best choice. The IRS accepts all major credit cards, including American Express, MasterCard, Visa and Discover cards. The IRS even accepts payments over the phone, so you can simply input your credit card information to load it onto the card. Replacing debt with more debt may seem perplexing, but credit card debt may be preferable than having the IRS on your heels. If this is the path you want to take, The IRS will probably recommend that you contact your provider for a better payment plan if you pay more than $ 100,000 on a card. Bear in mind that you will be charged interest on your card.
Refinance your home.
This is another alternative that incurs more debt. Again, it’s not the most preferred option, but if you’re almost out of time, refinancing your home can be a great idea. Unlike credit card interest, you can subtract the interest you accumulate on your income tax mortgages, provided that you break it down in detail. Ensure you can really afford to do this first, but consider this: People refinance their homes for several reasons, and paying off debts is one of the most feasible options.
Enter into an installment payment agreement.
If you cannot pay your debt in full right away, installment agreement are usually the most feasible option. If you discuss with the IRS to reach an installment agreement, they both agree that you will pay off your tax debt for a defined number of months or years by making a minimum payment each month. Remember, the IRS wants to work with you; it is significant to find the resources and communicate with them about what you can accommodate. Here are some options you can use to attain your goal.
• Guaranteed payment agreements
The guaranteed payment agreement is generally the easiest to get. If you meet the basic necessities, the IRS is required to comply and allow you to use this installment agreement. There are many attractive reasons to opt for this plan. One of the most eye-catching features is that you must make a minimum payment of only $ 25. The other side of the coin is that it is compulsory to pay in thirty-six months or less (five years). Also, if this plan is activated, the IRS won’t file a federal tax lien, so you won’t have any trouble getting credit in the future. The conditions are simple: the principle is that your debt should not be more than $ 10,000. In addition, you must also have already filed each and every delinquent tax return. If the IRS accepts your application, they both agreed that they will make all payments on time, that your debt will be paid in five years or less, and that you will file your taxes on time in the future. Provided you follow these guidelines, you can use this installment payment plan.
• Installment payment confidentiality agreement
You can be eligible for this plan as long as you don’t owe more than $ 25,000. As the title implies, you do not have to reveal the most detailed financial information when you request this installment agreement. This means that you do not have to fill out the form called Form 433, Collection Information Statement. This statement would have you submit information about all your accounts, household non-salary income, credit cards, other lines of credit, business information, monthly living expenses and all other assets. You will also have more time to pay your debt, up to seven years or less. Also, you will not have a tax lien placed in your name, which means creditors will not be alerted and you should not experience a change in your ability to obtain credit.
• Coordinated installment payment agreement
This payment agreement is intended for those owing a total debt of $ 50,000 or less. In fact, there are two different plans under this agreement: one intended for those who have $ 25,000 in debt or less, and one for those who owe $ 21,000 to $ 50,000. Related to the Installment Payment Confidentiality Agreement, you must pledge to settle all debts within seventy-two months. You must also concur to enter all of your past and future taxes. Just as with the Undisclosed Installment Agreement, this installment payment plan eliminates the need to disclose detailed financial information to the IRS. However, depending on your state, you may be required to disclose certain financial information during the financial resolution process.
• Partial installment payment agreements
The Partial Installment Payment Agreements is intended for those who cannot pay their debt to the IRS in any other installment agreement without experiencing extreme financial difficulties. If you are not eligible for any other plan, this may be the right payment option for you. The Partial Installment Payment Agreement will aid a taxpayer to make a payment without risk of insolvency. If making a large payment will force the taxpayer to go without basic requirements like food and water, the IRS is willing to discuss. Under this plan, you can adjust your monthly payment based on what you can pay less living expenses. In this situation, the IRS may impose a tax lien to make your payment secure, and as a result, you may have difficulty obtaining credit. To get a Partial Payment Agreement, You must fill a financial statement form provided by the IRS, which will then take the form, examine it, and assign you the assigned monthly payment based on what you can afford. Once you’re in the hands of the IRS, they’ll examine the statement form and allocate the amount you’ll pay based on your finances.
Request a commitment offer
A compromise offer is an agreement with the IRS to pay less than your actual debt. While this option is complex to obtain, if the IRS approves it, you will experience lighter debt than before. To be eligible for an Offer in Compromise, you must submit comprehensive financial records for both yourself and your spouse. It is significant to note that an Offer in Compromise is determined on a case-by-case basis. The IRS will examine all of your records and determine if this option is practicable. While the IRS is in the process of examining your records, the collection of all assets and wages stops. While acceptance of a compromise offer is not common, it is often worth a try. The process of submitting an Offer in compromise is extensive, but a tax professional can help you determine the integrity of your case. Your form will be scrutinized, so it is important to review your financial history efficiently. If your application is accepted, your tax problem will be released, the IRS will stop confiscating properties or garnishing your wages and you will have a good status with the IRS.