When Tax Debt Help Becomes Necessary

Last updated on October 4, 2021

Most taxpayers who get into tax debt for the first time are confused whether to hire help or not. Although there are some simpler tax issues that do not require expert help, complicated tax issues such as tax debt payment, tax liens and tax levies require the expertise of tax lawyers for effective resolution.

Tax debt is one of the most common tax problems faced by American taxpayers. Non-payment of tax once can get taxpayers into tax debt. If the amount of back taxes to be paid to the IRS is small, taxpayers may pay it off in a single payment. The procedure for paying tax debt in a single payment is simple and requires no tax debt help.

Help in Choosing Tax Debt Payment Programs

In cases of tax debt where the amount of debt is substantial and which taxpayers cannot afford to pay in a single payment require expert tax debt help. The IRS has debt payment programs namely Installment Agreement, Partial Payment Installment Agreement, Currently Not Collectible and Offer in Compromise. Depending on their financial condition and their method of payment, taxpayers may choose any of the above mentioned programs to pay off their tax debt.

Tax Debt Help: Offer in Compromise & Partial Payment Installment Agreement

Help becomes necessary in cases where taxpayers cannot pay off the entire tax debt. Their tax help may match them with Offer in Compromise program, where tax debt amount is reduced to a sum that can be paid by the taxpayers concerned. They may also consider Partial Payment Installment Agreement under which taxpayers can pay a reduced sum in fixed monthly installments.

Negotiating the terms and conditions of Offer in Compromise and Partial Payment Installment Agreement require negotiation skills, knowledge of tax laws and IRS policies. Tax attorneys and enrolled agents are tax lawyers that can provide effective help in dealing with complex tax debt cases.

Tax Debt Help: Installment Agreement & Currently Not Collectible

Those taxpayers who can afford to pay the entire tax debt in a single payment can opt for Installment Agreement. Under it, taxpayers can pay the entire tax debt amount in fixed monthly installments.

Those taxpayers who cannot afford to pay any amount of tax debt may file for Currently Not Collectible where the IRS seizes all collection activity till the taxpayer is able to pay any amount of tax debt.

Before qualifying taxpayers under any of these programs, the IRS takes into account the financial condition of the taxpayer including assets and liabilities, the amount of tax debt to be paid, the time period of unpaid taxes etc. Taxpayers need to remember that the IRS charges interest and penalties on tax debt that remains to be paid even after a taxpayer has qualified for a debt payment program and begun to pay tax debt.

It is advisable for taxpayers to get help for tax debt cases where they require negotiations with the IRS. Tax help will ensure that taxpayers get the most advantageous resolution to the tax problem.