Getting In & Out of IRS Debt

Last updated on December 13, 2021

The IRS does not want to believe that sometimes taxpayers are not even aware that they are in tax debt. Usually, it happens because of inaccurate filing of taxes. Taxpayers believe they filed the return correctly and are in compliance with the IRS until they receive an IRS notice regarding tax debt. Underpayment of taxes can lead to IRS tax debt. The amount might be small in the beginning, but if unpaid, it grows big with time due to interest that the IRS charges on any amount of IRS debt.

Receiving IRS Notices about Debt

The first indication that the IRS reviewed and discovered that a taxpayer has not paid taxes due is receiving of an IRS notice regarding tax debt. If a taxpayer ignores IRS notices and does not pay the tax debt within the time specified on the notice, the IRS may move to tax lien or tax levy under which the IRS can seize and/or sell a taxpayer’s property/assets to fulfill the tax debt.

It is advisable to pay tax debt at the earliest to save money on interest and to avoid aggressive collection actions of the IRS. If taxpayers financial condition does not allow full or partial payment of tax debt, they can apply for IRS debt payment plans namely Offer in Compromise, Partial Payment Installment Agreement or Currently Not Collectible. These payment plans are created for those taxpayers who cannot pay the full tax debt amount at present. To achieve the best resolution, taxpayers can take help from a tax service that houses tax lawyers.

Payment of IRS Tax Debt

Whatever is the reason for the tax debt, the IRS wants to get back taxes owed fast. They prefer to get the entire amount of tax debt in a single payment, but very few taxpayers can afford to pay back their entire tax debt in a single payment. For these taxpayers, the IRS has debt payment plans. Those taxpayers who can pay the entire tax debt, but in installments can apply for Installment Agreement plan. Those who cannot pay the entire IRS debt can choose from Offer in Compromise or Partial Payment Installment Agreement. Those taxpayers who cannot pay any amount of tax debt may apply for Currently Not Collectible.

Hiring Help to Resolve IRS Debt

A tax help is hired by taxpayers who do not agree with the terms and conditions of the IRS, and need to negotiate with them. There are ways through which taxpayers can get IRS penalty reduced or removed, tax debt reduced, postpone payment of tax debt, appeal decisions of the IRS and achieve a resolution through which they can comfortably get back into the good books of the IRS.

A tax help uses the services of tax lawyers, tax attorneys and enrolled agents, to negotiate the terms of an IRS agreement so that the taxpayer gets the most beneficial resolution. Our reviews and ratings of top tax services can assist taxpayers in making an informed decision regarding which tax help to hire to achieve best IRS debt resolution.