Tax Debt: Simplest Methods of Resolution

Last updated on August 8, 2013

The resolution of tax debt is not difficult if done with knowledge and experience. To assist taxpayers with the resolution of their back taxes, the IRS has simplified its most common payment plans. By streamlining the application process helps taxpayers pay off their back taxes quicker and easier.

Taxpayers who cannot pay the entire amount of their back taxes opt for an Offer in Compromise. Taxpayers who can pay the entire tax debt, but unable to do so in one payment should review the terms of an Installment Agreement for the resolution of their debt. According to a Treasury report by the Inspector General for Tax Administration, there was a 28 percent increase in the number of requests for an Offer in Compromise in 2011, compared to the previous four years.

An Offer in Compromise attracts taxpayers because of tax debt reduction, but instead of applying for an IRS debt payment plan with a high rejection rate, taxpayers should explore other options for tax debt reduction, such as a Penalty Abatement. It will save them time and money because the IRS charges a penalty for applying for a plan a taxpayer does not qualify for.

The simplest method of tax resolution is paying the entire debt amount in a single payment. The second best option is to choose the right tax debt resolution plan. When seeking a resolution by using an IRS payment plan, it is important to use the experience and expertise of competent tax help. Our ratings and reviews of some of the top tax resolution services can assist taxpayers with their search.